On August 9, 2022 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company"), and Enalare Therapeutics Inc ("Enalare") reported an agreement for Eagle to make an equity investment of $25 million in Enalare, a clinical-stage privately held biopharmaceutical company dedicated to developing novel therapies for patients suffering from life-threatening acute respiratory and critical care conditions (Press release, Eagle Pharmaceuticals, AUG 9, 2022, View Source [SID1234617990]). The investment also includes an exclusive option for Eagle to acquire all remaining issued and outstanding Enalare stock upon the achievement of development milestones as set forth in the agreement.

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As part of the transaction, Eagle will invest up to approximately $55 million, which is expected to occur over the next two years subject to the achievement by Enalare of certain milestones on an agreed upon timeline. The investment consists of an upfront investment of $25 million, $12.5 million now and $12.5 to be paid in six months, and two potential follow-on equity investments of $15 million each contingent upon (i) the commencement of the ENA-001 Phase 2 clinical trial, and (ii) the ENA-001 Phase 2 clinical trial reaching 50% enrollment. Eagle and Enalare have also entered into an agreement providing Eagle the option to acquire the all remaining Enalare shares for an aggregate purchase price ranging from $100-$175 million plus royalty rights ranging from 9%-12% on all future global net sales of any Enalare product, paid to the ex-Eagle holders of Enalare shares at the time of acquisition.

The transaction is expected to provide Eagle with products protected by intellectual property rights, including composition of matter patents, which potentially provide patent term into the mid-2030s to the early 2040s. The Company believes these products have the potential to address significant unmet medical needs for millions of patients worldwide suffering from acute respiratory depression, including those in the hospital post-operative care setting, those experiencing community drug overdose, and preterm infants suffering a common condition known as Apnea of Prematurity.

Enalare’s lead compound, ENA-001, is an investigational, one-of-a-kind NCE designed as an agnostic respiratory stimulant.
It has been shown to be well tolerated in restoring breathing drive and responsiveness in five Phase 1 human studies.
Recent topline results of Enalare’s Phase 1 Study 108 indicate that ENA-001 successfully achieved the study’s primary endpoint. It was shown to be safe and well-tolerated and was able to reverse propofol-induced dampening of ventilatory responsiveness in the population studied.
Enalare is planning to initiate a Phase 2 clinical study for use in this patient population in the near term.
Approval for post-operative respiratory depression expected in 2026, and community drug overdose thereafter.
ENA-001 is also being developed in an Intramuscular ("IM") Formulation in partnership with the Biomedical Advanced Research and Development Authority ("BARDA") (contract number 75A50121C00044) for the potential use in patients experiencing drug overdose in a community setting and as a potential medical countermeasure for mass casualty events. This effort is also supported via a grant from the National Institute on Drug Abuse (NIDA: award number R44DA057133), a division of the National Institutes of Health. Enalare is planning to complete the required preclinical activities with the IM formulation in the near term and to begin human clinical studies in the first half of next year.
In addition, Enalare is developing ENA-001 for the treatment of Apnea of Prematurity ("AoP"), a condition commonly affecting infants born preterm in which they experience shallow or intermittent stoppage of breathing. Persistent AoP can cause near- and long- term neurological development risks to the infant. ENA-001 has received Rare Pediatric Disease designation from the U.S. Food and Drug Administration ("FDA") in the treatment of AoP, which potentially provides for a priority review voucher if the product is approved for this indication. Enalare is currently executing an animal proof-of-concept study with ENA-001 in the treatment of AoP and expects to further pursue orphan drug designation and initiate human clinical trials.
"By adding Enalare’s highly differentiated and complementary NCE to our portfolio, we immediately expand Eagle’s long-term growth possibilities. We believe ENA-001 has enormous potential to address important unmet medical needs. It is an agnostic respiratory stimulant with what we view as compelling clinical and health economic value propositions. It is also an ideal fit within our current hospital critical care portfolio, comprised of four approved and two investigational products. BARHEMSYS, the only proven antiemetic for the treatment of post-operative nausea and vomiting ("PONV"), BYFAVO5, the first new drug approved for procedural sedation in decades, RYANODEX, and vasopressin are all in market. If approved, landiolol, an ultra-short acting cardio-selective IV beta-blocker, and CAL02, a first-in-class anti-infective agent to treat severe bacterial pneumonia will join our currently approved products to create a formidable hospital/anesthesia product portfolio," stated Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

"We plan to leverage our strong balance sheet and usher ENA-001 toward a potential 2026 launch. This is a great opportunity for Eagle and one that furthers our transformation into a diversified, branded pharmaceutical company with long-duration assets in acute care," concluded Tarriff.

"This partnership is an exciting step forward in the development of ENA-001 and for the millions of patients worldwide that can benefit from such a novel agnostic respiratory stimulant," stated Herm Cukier, President and CEO of Enalare Therapeutics. "Our partnership with Eagle provides us access to capital and a robust infrastructure and commercial platform to develop and potentially launch our product. Without added headcount or expense, Eagle will be able to rely on our experienced and highly regarded team as we move onto Phase 2 and 3 trials, which we believe will successfully demonstrate ENA-001’s ability to improve patient respiratory capacity. We look forward to a close and productive working relationship and supporting Eagle in the successful development of Enalare’s products," concluded Cukier.

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Transaction Rationale

Enalare’s intellectual property with potential patent duration through the mid 2030s to early 2040s offers Eagle access to complementary and diversified revenue streams;
Eagle believes there is a compelling commercial opportunity for Enalare’s lead drug candidate, ENA-001:
Agnostic respiratory stimulant with first-in-class mechanism of action;
Studied in more than 100 human subjects to date;
Differentiated product that significantly expands long-term sales potential and durability of Eagle’s hospital business;
Synergistic fit with Eagle’s current and expanding portfolio of hospital products, with overlap of customer channel and decision makers;
Timing of launch, if approved, aligns with anticipated Eagle commercial capacity;
Provides the opportunity for strategic expansion into adjacent therapeutic and customer channels.
About ENA-001

ENA-001 is an investigational new chemical entity ("NCE") being developed by Enalare for multiple potential indications, including the prevention and treatment of post-operative respiratory depression. With its novel mechanism-of-action and based on findings to date, it could potentially improve the lives of those impacted by several life-threatening conditions including community drug overdose, post-operative respiratory depression, and apnea of prematurity. If approved, ENA-001 would offer new treatment options for physicians, emergency responders, and caregivers addressing acute respiratory depression across multiple patient populations in multiple settings.