On August 31, 2022 Aesther Healthcare Acquisition Corp (NASDAQ: AEHA) ("Aesther"), a special purpose acquisition company (SPAC) formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, or similar business combination with one or more businesses, reported that it has entered into an Agreement and Plan of Merger with Ocean Biomedical, Inc. ("Ocean Biomedical"), a next-generation biopharma company, (the "Merger Agreement") (Press release, Ocean Biomedical, AUG 31, 2022, View Source [SID1234619008]). The combined company will work to accelerate the development of Ocean Biomedical’s core assets in oncology, fibrosis, and infectious diseases, all based on new target discoveries enabling first-in-class drug and vaccine candidates – developed through past and ongoing grants totaling $123.9 million.
Upon closing of the merger transaction (the "Transaction"), Ocean Biomedical will be a wholly owned subsidiary of Aesther and Aesther will change its name to Ocean Biomedical, Inc. and its common stock and warrants are expected to be listed on Nasdaq, under the symbols "OCEA" and "OCEAW," respectively.
Ocean Biomedical was co-founded by Dr. Chirinjeev Kathuria MD, an investor, physician, and entrepreneur who is a graduate of Brown University’s Alpert School of Medicine, and Stanford University’s Graduate School of Business.
Dr. Jack A. Elias MD and Dr. Jake Kurtis MD/PhD are the scientific co-founders of Ocean Biomedical. Dr. Elias is an internationally renowned lung specialist who has made seminal discoveries in lung cancer, pulmonary fibrosis, asthma and COPD. He has served as Chief of Pulmonary and Critical Care Medicine and Chairman of the Department of Internal Medicine at Yale School of Medicine and Yale New Haven Hospital. He subsequently served as Dean of Biology and Medicine at the Warren Alpert Medical School of Brown University and Senior Vice President for Health Affairs at Brown University between 2017 and 2022 and is presently the Warren Alpert Professor of Translational Sciences in Internal Medicine and Molecular Microbiology and Immunology at Brown University. Dr. Kurtis is a groundbreaking global health and infectious disease expert who serves as the Chair of Pathology and Laboratory Medicine at Brown, and Executive Director of Brown’s MD-PhD program.
Ocean Biomedical’s Chief Executive Officer is Elizabeth Ng, a graduate of the Massachusetts Institute of Technology, and Stanford University’s Graduate School of Business. She has held strategy/portfolio management leadership roles at Gilead Sciences, Merck and Co, and BioMarin Pharmaceutical.
Around its core scientists and CEO, Ocean Biomedical has gathered a world-class biopharma management team to guide discoveries through clinical testing, and continue building its diverse portfolio into adjacent diseases with similar biological pathways.
• Oncology. Ocean Biomedical is developing several cancer drugs based on discoveries of targets that regulate multiple cancer-inducing pathways including a recently discovered master regulator of antitumor immune responses. They are being used to target non-small cell lung cancer and glioblastoma multiforme, a devastating form of brain cancer.
• Fibrosis. Ocean Biomedical has identified and is developing a small molecule which has demonstrated efficacy and favorable safety signals in animal models. It is being used to target multiple fibrotic diseases, including Idiopathic Pulmonary Fibrosis (IPF), and Hermansky-Pudlak Syndrome, a rare ‘orphan disease’ with no known treatment.
• Infectious Diseases. Ocean Biomedical is accelerating development of a uniquely powerful malaria vaccine and several malaria therapeutics that target newly discovered pathways.
• Discovery Platform. Ocean Biomedical plans to deploy the proprietary discovery platform that led to its malaria breakthroughs to target similarly intransigent disease challenges.
Innovative Targets for Global Unmet Needs
Ocean Biomedical’s novel target in oncology is Chitinase 3-Like1 (CHI3L1), a key regulator of many visceral tumors regardless of the genetic mutations that drive them. Ocean’s proprietary mono-specific and bispecific antibodies are the first to target CHI3L1. The efficacy proof of concept is an 85-95% reduction in primary and metastatic tumor burden in multiple animal models in the absence of adverse effects. Monoclonal antibodies (mAbs), such as CHI3L1, are generally well-tolerated in humans given their inherent target specificity. CHI3L1 is also an excellent biomarker: with serum and tissue levels which predict severity and prognosis in multiple tumor types. Ocean Biomedical seeks to address major unmet needs in its initial indications with the mAb for lung cancer and the bispecific antibody for brain cancer. These antibodies also synergize with existing therapeutics to enhance their potency and the duration of their beneficial effect. There is potential for expansion beyond lung and brain cancer to other visceral cancers such as to breast, liver, colon, and others.
Non-small cell lung cancer (NSCLC) is the leading cause of cancer death and second most diagnosed cancer in the US. NSCLC affects approximately 460,000 people in the U.S. and accounts for about 85% of new lung cancers. NSCLC continues to rank among the cancers with the lowest 5-year survival rates. Early diagnosis is essential, as 40%-50% of patients are diagnosed with Stage IV disease. Currently, NSCLC is primarily being treated by surgical resection with curative intent, although radiation and chemotherapy have also been employed. Drugs that target components of the antitumor immune response such as the PD-1/PD-L1/PD-L2 axis have improved therapeutic responses. However, only a minority of patients that get these drugs respond to them and the responses that are seen are often not durable. As a result, it is clear that new treatments are urgently needed.
Glioblastoma multiforme (GBM) is a lethal type of brain tumor that affects approximately 28,000 people in the U.S. The median survival time is about 15 months, and 5-year survival is just 8% for those aged 45-54 and 5% for those aged 55-64. About 25% of GBM patients are not actively treated due to rapid disease progression. Treatment usually involves surgery, followed by chemotherapy and radiation. No curative therapies exist for the disease and there have been multiple pipeline failures. It represents a massive unmet medical need.
Ocean Biomedical’s small molecule candidate in fibrosis addresses a novel target, Chitanse 1 (Chit1), a key regulator of tissue damage and remodeling, and has the potential to be disease-modifying. The small molecule candidate has demonstrated an 85-90% reduction in collagen accumulation in 4 animal models of pulmonary fibrosis. It has also shown good safety signals and was well-tolerated in other companies’ prior clinical studies.
Idiopathic Pulmonary Fibrosis (IPF) is a progressive disease that results in irreversible loss of lung function, with high morbidity and mortality rates. IPF prevalence in the US has been reported to range from 10 to 60 cases per 100,000 while in Europe it ranges from 1.3 to 32.5 cases per 100,000 people. Prevalence is much higher in patients over 50 and is also higher in males. There are two drugs approved for use in treating IPF, but they only slow decline in lung function. In addition, they have significant side-effects, and a high proportion of patients choose not to take the drug therapy.
Hermanksy-Pudlak Syndrome (HPS) is a rare, genetic disease. Symptoms are severe including highly penetrable pulmonary fibrosis, oculocutaneous albinism, and bleeding due to platelet dysfunction, and colitis. HPS-related pulmonary fibrosis occurs early in life (30’s-40’s) and patients have a 10-12 year mean survival rate. There are currently no approved therapeutics for HPS-related pulmonary fibrosis. Patients often resort to off-label use of IPF therapeutics which have not shown efficacy in HPS and which have severe side-effects.
Ocean Biomedical’s vaccine and therapeutic candidates use a groundbreaking approach to target Malaria, one of the world’s most intractable diseases. Malaria is caused by parasites and transmitted through the bites of infected mosquitoes. The deadliest of these parasites is Plasmodium falciparum, and Ocean Biomedical’s vaccine and therapeutic candidates target PfGARP and PfSEA-1 –novel targets discovered by Scientific Co-Founder Dr. Jake Kurtis – that are critical for this parasite’s survival. The proof of concept has been established with 100% killing of malaria parasites in in-vitro assays, and greater than 90% killing of malaria parasites in mRNA-based immunization of non-human primates. The targets have no homology to any human protein and Ocean Biomedical’s vaccine and therapeutic candidates are projected to be safe and well tolerated. Ocean Biomedical’s Malaria vaccine is based on the mRNA vaccine delivery platform which is the same one used by Pfizer/BioNTech for COVID-19 vaccines. Ocean Biomedical’s therapeutic candidate is a humanized mAb.
Ocean Biomedical’s vaccine target discovery platform which was used to identify the malaria targets also is believed to have exciting potential for use in discovering targets against other infectious diseases such as tuberculosis or other emerging global viruses.
Malaria is a deadly disease with significant unmet therapeutic needs, with 2-3 billion people at risk of infection annually worldwide and 200-300 million infected annually worldwide. It remains the leading single-agent killer of children with more than 500,000 children under age 5 killed annually. There is high unmet public health need with no effective prophylactic vaccine and current Standard of Care therapeutics have potential risk from drug resistant strains.
Suren Ajjarapu, Chairman and CEO of Aesther, commented on the potential of the business combination saying, "The world is on the cusp of a new era in biomedicine, and we are excited to be teaming up with a biopharma company that has both cutting-edge science and an innovative business model. We think that combination will result in positive valuations and long term growth, as we continually focus on identifying and accelerating promising discoveries."
Ocean Biomedical’s Executive Chairman, Dr. Chirinjeev Kathuria commented, "Our executive team and our scientists are excited to partner with Aesther Healthcare to advance our cancer, fibrosis, and malaria discoveries into their Phase 1 trials and beyond, and to extend our unique model to other research and discovery partners."
Dr. Jack A. Elias, Ocean Biomedical’s scientific co-founder, described the potential impact of his lab’s discoveries saying, "We believe we have discovered a master pathway that regulates multiple key cancer inducing moieties including critical immune checkpoint inhibitors in the lung. In turn, interventions based on this master pathway control the ability of tumor cells to develop, spread to the lung and grow once they’re in the lung." He notes that "these are very novel observations that give us a completely new vision for the processes that regulate anti-cancer immune responses in the lung via immune checkpoint inhibition." Dr. Elias also notes that based on these findings his team believes they have developed "anti-CHI3L1 monoclonal antibodies and bi-specific antibodies that are extremely exciting potential therapeutics. The combination with Aesther will allow us to further expand our development activities in this area."
"Malaria is one of the most significant killers of children on earth," said scientific co-founder Dr. Jonathan Kurtis. "We believe our team’s discovery of PfGARP is a major advance toward developing a vaccine for this devastating disease. Ocean Biomedical is committed to developing and delivering this vaccine to people who need it, around the world and the combination with Aesther will help accelerate those efforts."
Ocean Biomedical’s CEO, Elizabeth Ng commented, "I have reviewed hundreds of interesting research programs/assets but the ones that are part of our initial portfolio – in cancer, fibrotic diseases, and infectious disease – are some of the most scientifically compelling and potentially life-impacting ones that I have ever seen. I am honored to be leading a company that can potentially improve the lives of millions of patients worldwide."
Following the closing of the proposed Transaction, Dr. Chirinjeev Kathuria will serve as the Chairman of the Board of Directors. The Board will consist of nine members, including Dr. Kathuria, Suren Ajjarapu, Chairman and CEO of Aesther and Michael Peterson, a current member of the Aesther Board of Directors.
The executive team will be led by Elizabeth Ng (Chief Executive Officer) and will include Dr. Jack A. Elias (Co-founder and Chair of Scientific Advisory Board), Dr. Jake Kurtis (Co-founder, Scientific Advisory Board), Gurinder Kalra (Chief Financial Officer), Dr. Inderjote Kathuria (Chief Strategy Officer), Daniel Behr (EVP of Academic Partnerships), and Robert Sweeney (Chief Accounting Officer). Executive team bios are available at www.oceanbiomedical.com.
The proposed Transaction was unanimously approved by the boards of directors of all parties, at an expected combined pro forma enterprise value of approximately $345 million, assuming no redemptions of current Aesther public stockholders. In connection with the proposed Transaction, Aesther signed a Confirmation Agreement for an up to $40 million committed backstop by Vellar Opportunity Fund SPV LLC – Series 3. Additionally, the proposed Transaction includes a contingent earnout payable to the Ocean Biomedical stockholders and the sponsor. The proposed Transaction is expected to be completed in Q4 2022, subject to, among other things, the approval by Aesther stockholders, governmental, regulatory and third party approvals, satisfaction of minimum closing net tangible asset and cash requirements and the satisfaction or waiver of other customary closing conditions.
EF Hutton, division of Benchmark Investments, LLC, serves as capital markets advisor to Aesther Healthcare Acquisition Corp. Nelson Mullins Riley & Scarborough LLP serves as legal counsel to Aesther Healthcare Acquisition Corp. and Malone Bailey, LLP serves as auditors to Aesther Healthcare Acquisition Corp. Dykema Gossett PLLC serves as legal counsel to Ocean Biomedical, Inc. and Deloitte & Touche LLP serves as auditors to Ocean Biomedical, Inc.