On April 25, 2022 ERYTECH Pharma (Euronext Paris: ERYP—Nasdaq: ERYP), a clinical-stage biopharmaceutical company developing innovative therapies by encapsulating therapeutic drug substances inside red blood cells, reported the sale of its U.S. manufacturing facility to Catalent, a leading contract development and manufacturing organization (CDMO) in advanced therapies (Press release, ERYtech Pharma, APR 25, 2022, View Source [SID1234612901]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Under the terms of an asset purchase agreement between ERYTECH and Catalent (the "APA"), Catalent agreed to acquire ERYTECH’s state-of-the-art commercial-scale cell therapy manufacturing facility in Princeton, New Jersey, for a total consideration of $44.5 million. ERYTECH’s current staff at the site of approximately 40 people will be offered Catalent’s employment.
The parties will also enter into a long-term supply agreement, under which Catalent will manufacture ERYTECH’s lead product candidate eryaspase (GRASPA) for clinical and commercial supply in the United States. ERYTECH has a Phase 1 trial in first-line pancreatic cancer ongoing in the United States and is in a continued dialogue with the U.S. FDA regarding a potential BLA submission for GRASPA in hypersensititve ALL, now targeted in the third quarter of 2022, subject to FDA agreement on remaining outstanding information requests.
Catalent will also offer their expertise in late-stage and commercial manufacturing of advanced therapy medicinal products with respect to product characterization, commercial production, regulatory inspections, and approvals.
ERYTECH’s Princeton facility is a 30,900 sqft cutting edge manufacturing facility, designed with the flexibility to expand to support various cell therapy production requirements and capacities. Catalent intends to expand the Princeton site and leverage ERYTECH’s experienced staff to manufacture a broader portfolio of cell therapies. ERYTECH will retain its manufacturing site in Lyon, France and its expertise and capabilities in manufacturing process science to continue innovating in cell therapy manufacturing.
"In Catalent we have found a great partner for the manufacturing of our innovative red blood cell derived products, and we believe that this strategic partnership will meet our long-term manufacturing needs in the United States," commented Gil Beyen, Chief Executive Officer of ERYTECH, "As we are turning this important page for ERYTECH, I wish to thank our entire Princeton team very much for their talent and dedication in building and developing our flagship facility since its inception in 2018. ERYTECH will now further focus capital resources on the development of potentially transformative therapeutics for serious diseases. We are also continuing to evaluate further strategic options for the company, including additional partnerships and addition of complementary assets, through which we can leverage our ERYCAPS platform and our development and manufacturing capabilities."
"This acquisition is strategically important to Catalent’s commitment to support the development, clinical, and commercial supply of cell therapies to meet rapidly growing demand," said Manja Boerman, Ph.D., President, Catalent Cell & Gene Therapy. "The talented and experienced staff already employed at the facility, the capabilities it has in place, and the opportunity to quickly add further capacity on the same site, allows Catalent to expand rapidly to create a U.S. campus and center of excellence for cell therapy development and manufacturing that will serve customers around the world."
ERYTECH reported cash and cash equivalents of €33.7 million ($38.1 million) as of December 31, 2021. Upon closing of the transaction, ERYTECH’s cash and cash equivalents are expected to be approximately €55 million ($60 million) with the addition of the $44.5 million (€40.8 million) purchase price payment. With a reduction in yearly cash disbursements of approximately $7.5 million related to running costs of the Princeton facility, this cash position is expected to fund ERYTECH’s operations under its current configuration to mid-2024.
KEY TRANSACTION TERMS
In connection with the transaction, ERYTECH’s board of directors has established an ad hoc committee in order to review the indications of interests received by ERYTECH and to issue a recommendation to its board of directors. After having assessed the transaction and potential strategic alternatives, ERYTECH’s board of directors has unanimously approved it on the basis, inter alia, of the recommendation of the ad hoc committee and the opinion of its works council.
Pursuant to the APA, Catalent paid a total consideration of $44.5 million to ERYTECH.
Pursuant to the APA, ERYTECH has made certain representations and warranties on the transferred assets. ERYTECH has also agreed to certain customary covenants and restrictions with respect to assets and liabilities comprising the transaction consistent with a transaction of this nature.
The parties will also enter into a long-term supply agreement for the manufacturing and supply of the lead product candidate eryaspase (GRASPA) by Catalent to ERYTECH.
Duane Morris is serving as legal counsel to Catalent. Cooley LLP and Gide Loyrette Nouel A.A.R.P.I. are serving as legal counsel to ERYTECH. Torreya Capital LLC is serving as exclusive financial advisor to ERYTECH.