On August 9, 2023 Eli Lilly and Company (NYSE: LLY) reported the successful completion of its acquisition of DICE Therapeutics, Inc. (NASDAQ: DICE) (Press release, Eli Lilly, AUG 9, 2023, View Source [SID1234634067]). The acquisition expands Lilly’s immunology portfolio to include DICE’s novel oral therapeutic candidates, including oral IL-17 inhibitors currently in clinical development, to treat chronic diseases in immunology.

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"Since our founding nearly 150 years ago, we’ve strived to make life better for people around the world – but we know that to achieve this goal, we have to bring the brightest minds to Lilly," said Ajay Nirula, Ph.D., senior vice president of immunology at Lilly. "With the passion and expertise of our new colleagues from DICE, we look forward to continuing our pursuit of discovering and delivering life-changing medicines for patients living around the world with chronic immunologic diseases."

The Offer and the Merger
Lilly’s tender offer to acquire all of the issued and outstanding shares ("Shares") of common stock of DICE, at a purchase price of $48 per Share in cash, without interest and less any applicable tax withholding, expired as scheduled at one minute past 11:59 p.m., Eastern time, on Aug. 8, 2023 and was not further extended. Computershare Trust Company, N.A., the depositary and paying agent for the tender offer, has advised Lilly that as of the expiration of the tender offer, 42,265,390 Shares were validly tendered and not properly withdrawn, representing approximately 88.4% of the issued and outstanding Shares. Such Shares have been accepted for payment and will be promptly paid for in accordance with the terms of the tender offer. Following completion of the tender offer, Lilly completed the acquisition of DICE through the previously planned second-step merger. DICE’s common stock will be delisted from the NASDAQ Global Market.

For Lilly, Kirkland & Ellis LLP is acting as legal counsel. For DICE, Centerview Partners LLC is acting as exclusive financial advisor and Fenwick & West LLP as legal counsel.

On August 9, 2023 DURECT Corporation (Nasdaq: DRRX) reported financial results for the three months ended June 30, 2023 and provided a corporate update (Press release, DURECT, AUG 9, 2023, View Source [SID1234634066]).

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"We are pleased to have completed enrollment in our Phase 2b AHFIRM trial in June and remain on track to report topline data in the fourth quarter of 2023. Assuming a positive outcome from AHFIRM, we plan to review the results with the U.S. Food and Drug Administration (FDA) in the first quarter of 2024. If approved, larsucosterol would be the first FDA-approved treatment for alcohol-associated hepatitis (AH)," stated James E. Brown, D.V.M., President and CEO of DURECT. "We are also excited to announce the expansion of our epigenetic modulator platform into oncology. In conjunction with teams of experienced chemists and biologists, our research and development team have designed new chemical entities (NCE) that are now in preclinical development for multiple oncology indications. With this achievement, DURECT is advancing its mission to be a global leader in the emerging field of epigenetic medicine."

Recent Business Highlights:

•
AHFIRM enrollment completed – DURECT announced on June 7, 2023 that it had met the enrollment target in the AHFIRM trial. In total, we randomized and dosed 301 patients at leading hospitals in the U.S., Australia, E.U. and U.K., including prominent transplant centers. We continue to expect to report topline data in the fourth quarter of 2023.
•
AH Key Opinion Leader (KOL) event – DURECT hosted a KOL event for investors on May 16, 2023. The event included presentations by Dr. Paul Gaglio and Dr. Brett Fortune as part of our on-going campaign to build awareness of the mortality rate and unmet patient need in AH, and the role that larsucosterol may play in the treatment of AH.
•
Publication of Phase 2a data in AH – Additional data from DURECT’s previously completed Phase 2a trial evaluating larsucosterol in AH were published by the peer-reviewed journal American Journal of Gastroenterology. The publication featured the previously reported safety and efficacy data from the 19-patient, open label Phase 2a trial. It also included cross-study comparisons of severe AH patients from the Phase 2a trial with two matching comparison arms from a contemporaneous study conducted by the DASH (Defeat Alcoholic Steatohepatitis) Consortium.
•
Expanding pipeline with novel anti-cancer NCEs – Building on our knowledge of epigenetic modulation, DURECT has internally developed multiple novel small molecule DNMT inhibitors that exhibit broad spectrum activity against multiple hematologic and solid tumor types. These compounds display unique and desirable physiochemical properties and pharmacokinetic profiles, as well as favorable tolerability. We intend to select a product candidate by the end of 2023 to advance into clinical trials in cancer patients. Our goal is to be prepared to initiate clinical trials for this product candidate by the end of 2024.

Financial Highlights for Q2 2023:

•
Total revenues were $2.1 million and net loss was $11.2 million for the three months ended June 30, 2023 compared to total revenues of $2.1 million and net loss of $11.6 million for the three months ended June 30, 2022.
•
At June 30, 2023, cash, cash equivalents and investments were $34.9 million, compared to $43.6 million at December 31, 2022. Debt at June 30, 2023 was $20.7 million, compared to $21.2 million at December 31, 2022.
•
After the end of the second quarter, in July 2023, we completed a registered direct offering of common stock and warrants which raised net proceeds of approximately $13.8 million.

Earnings Conference Call

We will host a conference call and webcast today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss second quarter 2023 results and provide a corporate update:

Wednesday, August 9 @ 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time

Toll Free: 1-877-407-0784

International: 1-201-689-8560

Conference ID: 13740526

Call meTM: click here

Participants can use guest dial-in numbers above to reach an operator or they can click the Call meTM link for instant telephone access to the event (dial-out). The Call meTM link will be made active 15 minutes prior to scheduled start time.

Webcast: View Source;tp_key=ba103a2a9b

A live audio webcast of the presentation will be also available by accessing DURECT’s homepage at www.durect.com on the "Events" page, under the "Investors" tab. If you are unable to participate during the live webcast, the call will be archived on DURECT’s website under "Events" in the "Investors" section.

About the AHFIRM Trial

Enrollment was completed in June 2023 in our Phase 2b randomized, double-blind, placebo-controlled, international, multi-center study in subjects with severe acute alcohol-associated hepatitis (AH) to evaluate saFety and effIcacy of laRsucosterol treatMent (AHFIRM). The study is comprised of three arms, and 301 total patients were randomized and dosed, with approximately 100 patients in each arm: (1) Placebo plus supportive care, with or without methylprednisolone capsules at the investigators’ discretion; (2) larsucosterol (30 mg); and (3) larsucosterol (90 mg). Patients in the larsucosterol arms receive the same supportive care without steroids. In order to maintain blinding, patients in the two active arms receive matching placebo capsules if the investigator prescribes steroids. The primary outcome measure will be the 90-Day incidence of mortality or liver transplantation for patients treated with larsucosterol compared to those treated with placebo. The Company has enrolled patients at clinical trial sites across the U.S., EU, U.K., and Australia. Reflecting the life-threatening nature of AH and the lack of therapeutic options, the U.S. Food and Drug Administration (FDA) has granted larsucosterol Fast Track Designation for the treatment of AH. We believe a positive outcome in the AHFIRM trial could support a New Drug Application filing. For more information, refer to ClinicalTrials.gov Identifier: NCT04563026.

About Alcohol-associated Hepatitis (AH)

AH is an acute form of alcohol-associated liver disease (ALD), associated with long-term heavy intake of alcohol and often occurs after a recent period of increased alcohol consumption (i.e., a binge). AH is typically characterized by severe inflammation and destruction of liver tissue (i.e., necrosis), potentially leading to life-threatening complications including liver failure, acute kidney injury and multi-organ failure. There are no FDA approved therapies for AH and a retrospective analysis of 77 studies published between 1971 and 2016, which included data from a total of 8,184 patients, showed the overall mortality from AH was 26% at 28 days, 29% at 90 days and 44% at 180 days. A subsequent global study published in December 2021, which included 85 tertiary centers in 11 countries across 3 continents, prospectively enrolled 2,581 AH patients with a median Model of End-Stage Liver Disease (MELD) score of 23.5, reported mortality at 28 and 90 days of approximately 20% and 31%, respectively. Stopping alcohol consumption is necessary, but frequently not sufficient for recovery in many moderate (defined as MELD scores of 11-20) and severe (defined as MELD scores >20) patients and therapies that reduce liver inflammation, such as corticosteroids, are limited by contraindications, have not been shown to improve survival at 90 days or one year, and have demonstrated an increased risk of infection. While liver transplantation is becoming more common for ALD patients, including AH patients, the total number of such transplants is still relatively small. Average charges for a liver transplant exceed $875,000, and patients require lifelong immunosuppressive therapy to prevent organ rejection.

About Larsucosterol

Larsucosterol is an endogenous sulfated oxysterol and an epigenetic modulator. Epigenetic regulators are compounds that regulate patterns of gene expression without modifying the DNA sequence. DNA hypermethylation, an example of epigenetic dysregulation, results in transcriptomic reprogramming and cellular dysfunction, and has been found to be associated with many acute (e.g., AH) or chronic diseases (e.g., NASH). As an inhibitor of DNA methyltransferases (DNMT1, DNMT3a and 3b), larsucosterol inhibits DNA methylation, which subsequently modulates expression of genes that are involved in cell signaling pathways associated with stress responses, cell death and survival, and lipid biosynthesis. This may ultimately lead to improved cell survival, reduced inflammation, and decreased lipotoxicity. As an epigenetic modulator, the proposed mechanism of action provides further scientific rationale for developing larsucosterol for the treatment of acute organ injury and certain chronic diseases.

On August 9, 2023 Delcath Systems, Inc. (Nasdaq: DCTH) ("Delcath" or the "Company"), an interventional oncology company focused on the treatment of primary and metastatic cancers of the liver, reported business highlights and financial results for the second quarter ended June 30, 2023 (Press release, Delcath Systems, AUG 9, 2023, View Source [SID1234634065]).

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Recent Business Highlights
During and since the second quarter, Delcath:
•Has continued to communicate with the United States Food and Drug Administration (FDA) as the agency continues its review of the HEPZATO KIT New Drug Application (NDA) resubmission with an anticipated PDUFA date of August 14, 2023;

•Received stockholders approval for the potential issuance in excess of 19.99% of Delcath’s outstanding common stock upon the conversion of the preferred stock issued pursuant to a private placement that closed on March 29, 2023 and generated $25 million on closing with up to an additional $35 million expected upon the exercise of warrants into additional series of preferred stock upon the approval of the HEPZATO KIT NDA and up to an additional $25 million upon the achievement of $10 million in quarterly revenue;

•Hired Vojislav Vukovic, MD, PhD as Chief Medical Officer; Sandra Pennell as Senior Vice President of Finance; and Zac MacLean as Director of Sales and Strategy; and

•Continued to treat patients at 3 Expanded Access Program sites.

"As we approach the August 14 PDUFA date, the Company has been preparing for the commercialization of HEPZATO KIT, if approved," said Gerard Michel, Chief Executive Officer of Delcath. Mr. Michel added, "As part of this preparation, we continue to add experienced personnel across the key functional areas involved in commercialization."
Delcath will schedule an update call shortly after the FDA’s action on the HEPZATO KIT NDA resubmission, which the Company expects to occur on or around the anticipated PDUFA date of August 14, 2023.

Second Quarter 2023 Results

Financial Highlights.

Total revenue for the three months ended June 30, 2023, was approximately $0.5 million, compared to $0.8 million for the prior year period, from our sales of CHEMOSAT in Europe. This decrease in product revenue is primarily due to potential commercial patients in the Netherlands being treated in the CHOPIN trial and reduced demand in Germany, possibly due to tebentefusp usage.

Research and development expenses for the quarter were $3.6 million, compared to $5.6 million in the prior year quarter. The decrease in R&D expense is primarily due to completing clinical trial activities. The prior year quarter included expenses for the preparation of the pre-NDA meeting with the FDA. Selling, general and administrative expenses for the quarter increased to $4.8 million, compared to $4.5 million in the prior year quarter primarily relating to activities to prepare for a commercial launch if the HEPZATO KIT is approved.

On August 9, 2023 Deciphera Pharmaceuticals, Inc. (NASDAQ: DCPH), a biopharmaceutical company focused on discovering, developing, and commercializing important new medicines to improve the lives of people with cancer, reported financial results for the second quarter ended June 30, 2023 and provided a corporate update (Press release, Deciphera Pharmaceuticals, AUG 9, 2023, View Source [SID1234634063]).

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"QINLOCK delivered record performance in the second quarter based on continued growth in the U.S. and around the world. Moving into a significant second half of 2023, we are looking forward to the top-line results from the MOTION study of vimseltinib in patients with tenosynovial giant cell tumor (TGCT), which has the potential to become our second approved medicine," said Steve Hoerter, President and Chief Executive Officer of Deciphera Pharmaceuticals. "Additionally, we have opened the first sites for INSIGHT, the pivotal Phase 3 study of QINLOCK versus sunitinib in second-line gastrointestinal stromal tumor (GIST) patients with mutations in KIT exon 11 and 17 or 18 and for additional combination cohorts of our ULK inhibitor DCC-3116, one in combination with QINLOCK and another in combination with encorafenib and cetuximab. We are on track to submit an Investigational New Drug application to the FDA for DCC-3084, a potential best-in-class pan-RAF inhibitor, in the fourth quarter."

Mr. Hoerter continued, "We are proud of the significant progress across both our early-stage and late-stage programs that we have already achieved in the first half of 2023. In addition to the INTRIGUE Phase 3 ctDNA analysis presented at the ASCO (Free ASCO Whitepaper) Plenary Session in the first quarter, we also presented eight poster presentations at AACR (Free AACR Whitepaper) that showcased the depth and breadth of our kinase switch-control research engine along with the nomination of our newest development candidate, DCC-3009, a potential best-in-class pan-KIT inhibitor. At ASCO (Free ASCO Whitepaper) in June, we had one encore presentation of our INTRIGUE Phase 3 ctDNA analysis and three poster presentations, including overall survival and long-term safety data from the INTRIGUE Phase 3 study of QINLOCK. Finally, on behalf of everyone at Deciphera, I would like to thank Dan Flynn for his dedication to Deciphera’s founding vision of improving the lives of people with cancer, and for trailblazing the innovations that have made all these advancements possible. We are excited to build upon this foundation with Dash Dhanak as our new Chief Scientific Officer."

Second Quarter 2023 Highlights and Upcoming Milestones

QINLOCK (ripretinib)

Recorded $37.3 million in QINLOCK net product revenue in the second quarter of 2023, including $28.9 million in U.S. net product revenue and $8.4 million in international net product revenue, an increase of 18% compared to net product revenue of $31.5 million in the second quarter of 2022. In addition, QINLOCK generated $1.0 million in collaboration revenue driven by royalties for sales of QINLOCK by Zai Lab, the Company’s partner in Greater China.
Presented one encore presentation and three poster presentations at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting featuring an update from the ASCO (Free ASCO Whitepaper) Plenary Series Session presenting circulating tumor DNA (ctDNA) analysis results from the INTRIGUE Phase 3 study of QINLOCK, updated overall survival (OS) and long-term safety results, and outcome data on patients without detectable ctDNA at baseline from the INTRIGUE Phase 3 study of QINLOCK in patients with advanced GIST previously treated with imatinib, and information on the study design for the upcoming INSIGHT pivotal Phase 3 study of QINLOCK versus sunitinib in second-line GIST patients with KIT exon 11 and 17/18 mutations.
Initiated the INSIGHT Phase 3 study by opening the first sites for enrollment comparing QINLOCK versus sunitinib in second-line GIST patients with mutations in KIT exon 11 and 17/18.
Completed reimbursement negotiations process in Italy; launch expected shortly. Completed negotiations with the pan-Canadian Pharmaceutical Alliance (pCPA) in April 2023, which will enable broad access to fourth-line GIST patients in Canada.
Received regulatory approval for QINLOCK in Singapore in May 2023.
Vimseltinib

Expects to announce top-line results from the MOTION pivotal Phase 3 study of vimseltinib, an investigational, orally administered, potent, and highly selective switch-control kinase inhibitor of CSF1R for the potential treatment of tenosynovial giant cell tumor (TGCT) in the fourth quarter of 2023.
Expects to present updated data from the Phase 1/2 study of vimseltinib in the fourth quarter of 2023.
DCC-3116

Presented preclinical data on combinations with DCC-3116, an investigational, orally administered, selective, and potent switch-control kinase inhibitor of ULK1/2-mediated autophagy, at the American Association for Cancer (AACR) (Free AACR Whitepaper) Annual Meeting 2023, including preclinical models in combination with QINLOCK in GIST models and with encorafenib and cetuximab in colorectal cancer (CRC) models.
Completed the Phase 1 single agent dose escalation (n=28) of DCC-3116 at doses from 50 mg – 300 mg BID; no maximum tolerated dose was reached with one dose limiting toxicity (DLT) observed (Grade 3 increased ALT at 100 mg BID) and no treatment-related serious adverse events observed.
As of August 4, 2023, combination dose escalations of DCC-3116 are ongoing with MEK inhibitors trametinib (n=11) and binimetinib (n=10), and with KRAS G12C inhibitor, sotorasib (n=6) in patients with advanced solid tumors. Evaluation of trametinib and binimetinib cohorts in combination with 50 mg QD of DCC-3116 is ongoing after dose reduction from 50 mg BID based on observed DLTs for the trametinib combination (Grade 3 skin rash and diarrhea in one patient and Grade 3 diarrhea in one patient) and the binimetinib combination (Grade 3 decreased ejection fraction in one patient and Grade 2 blurred vision in one patient).
Evaluation of sotorasib cohort in combination with 200 mg QD of DCC-3116 is ongoing; combination of sotorasib and DCC-3116 at 50 mg BID was well tolerated with no DLTs observed in three evaluable patients.
Initiated new combination escalation cohorts with the first site open for enrollment evaluating DCC-3116 (100 mg QD starting dose) in combination with QINLOCK in patients with GIST and in combination with encorafenib and cetuximab in patients with CRC. Under the terms of the clinical trial collaboration and supply agreement with Pfizer, Inc., Deciphera will sponsor the study and Pfizer will supply encorafenib at no cost.
DCC-3084

Presented preclinical data for DCC-3084, a pan-RAF inhibitor, at the AACR (Free AACR Whitepaper) Annual Meeting 2023, which demonstrated a potential best-in-class profile based on its inhibition of Class I, II, and III BRAF mutations, and BRAF fusions, and optimized pharmaceutical properties.
Expects to submit an investigational new drug (IND) application to the U.S. Food and Drug Administration (FDA) for DCC-3084 in the fourth quarter of 2023.
DCC-3009

Presented preclinical data for DCC-3009, a potential best-in-class pan-KIT inhibitor, at the AACR (Free AACR Whitepaper) Annual Meeting 2023, which demonstrated its ability to potently and selectively inhibit the broad spectrum of known primary and secondary drug-resistant mutations in GIST models, spanning KIT exons 9, 11, 13, 14, 17, and 18.
Expects to submit an IND to the FDA for DCC-3009 in the first half of 2024.
Kinase Switch-Control Research Engine

Presented new preclinical data in eight poster presentations at the AACR (Free AACR Whitepaper) Annual Meeting 2023 from development candidates DCC-3116 (ULK), DCC-3084 (pan-RAF), DCC-3009 (pan-KIT) and research programs focused on GCN2 and PERK, novel targets in the integrated stress response pathway.
Corporate Update

Announced that the Company’s Founder, Executive Vice President, and Chief Scientific Officer, Daniel L. Flynn, Ph.D., will retire effective September 5, 2023, and will transition to a role as Senior Advisor to the Company. Dashyant Dhanak, Ph.D., has been appointed Executive Vice President and Chief Scientific Officer effective September 5, 2023. Dr. Dhanak brings over 30 years of experience in pharmaceutical research and discovery including most recently as Executive Vice President and Chief Scientific Officer at Incyte Corporation.
Announced that Ron Squarer has been appointed Chairperson of the Board of Directors. Mr. Squarer has over 30 years of experience in the pharmaceutical and biotechnology industry and joined Deciphera as a Director in December 2019. James A. Bristol, Ph.D., who has served as either Chairperson or Co-Chairperson since 2007, will remain a Board member of Deciphera.
Second Quarter 2023 Financial Results

Revenue: Total revenue for the second quarter of 2023 was $38.3 million, which includes $37.3 million of net product revenue of QINLOCK and $1.0 million of collaboration revenue compared to $32.5 million of total revenue, including $31.5 million of net product revenue of QINLOCK and $1.0 million of collaboration revenue, for the same period in 2022.
Cost of Sales: Cost of sales were $0.2 million in the second quarter of 2023 compared to cost of sales of $1.8 million for the second quarter of 2022. In the third quarter of 2022, Deciphera completed the sale of zero cost inventories of QINLOCK that had been expensed prior to FDA approval.
R&D Expenses: Research and development expenses for the second quarter of 2023 were $58.3 million, compared to $44.9 million for the same period in 2022. The increase was primarily due to an increase in clinical study costs related to the Phase 1/2 study of DCC-3116, the MOTION Phase 3 study and Phase 1 /2 study of vimseltinib, and clinical study costs for QINLOCK. Non-cash, stock-based compensation was $5.7 million and $5.4 million for the second quarters of 2023 and 2022, respectively.
SG&A Expenses: Selling, general, and administrative expenses for the second quarter of 2023 were $32.6 million, compared to $29.6 million for the same period in 2022. The increase was primarily due to an increase in professional, consulting, and other expenses as well as personnel-related costs. Non-cash, stock-based compensation was $7.1 million and $7.6 million for the second quarters of 2023 and 2022, respectively.
Net Loss: For the second quarter of 2023, Deciphera reported a net loss of $48.6 million, or $0.57 per share, compared with a net loss of $43.1 million, or $0.60 per share, for the same period in 2022.
Cash Position: As of June 30, 2023, cash, cash equivalents, and marketable securities were $389.4 million, compared to $426.3 million as of March 31, 2023. Based on its current operating plans, Deciphera expects its current cash, cash equivalents, and marketable securities together with anticipated product, royalty, and supply revenues, but excluding any potential future milestone payments under its collaboration or license agreements, will enable the Company to fund its operating and capital expenditures into 2026.
Conference Call and Webcast

Deciphera will host a conference call and webcast to discuss this announcement today, August 9, 2023, at 8:00 AM ET. The conference call may be accessed via this link: https://register.vevent.com/register/BI74ff2d04fe8541f48da1cf0ad35339ae. A live webcast of the conference call will be available in the "Events and Presentations" page in the "Investors & News" section of the Company’s website at View Source A replay will be available on the Company’s website approximately two hours after the conference call and will be available for 30 days following the call.

On August 9, 2023 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) and Decibel Therapeutics, Inc. (NASDAQ: DBTX), a clinical-stage biotechnology company dedicated to discovering and developing transformative treatments to restore and improve hearing and balance, reported a definitive agreement for the acquisition of Decibel by Regeneron at a price of $4.00 per share of Decibel common stock payable in cash at closing, with an additional non-tradeable contingent value right (CVR) to receive up to $3.50 per share in cash upon achievement of certain clinical development and regulatory milestones for Decibel’s lead investigational candidate, DB-OTO, within specified time periods (Press release, Decibel Therapeutics, AUG 9, 2023, View Source [SID1234634061]). The proposed acquisition values Decibel at a total equity value of approximately $109 million based on the amount payable at closing, and a total equity value of up to approximately $213 million if the CVR milestones are achieved.

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"We at Decibel are deeply committed to discovering and advancing innovative new therapies with the potential to be transformative for people with severe forms of hearing loss. We have built a pipeline of gene therapy product candidates for the ear that we believe have such potential. After full consideration, the Decibel Board has determined that this transaction is the best way to maximize shareholder value and ultimately benefit patients," said Laurence E. Reid, Ph.D., President and Chief Executive Officer of Decibel. "We have collaborated with our colleagues at Regeneron for the past six years and have huge respect for their research and development capabilities. We have full confidence that with Regeneron’s expertise and resources the Decibel pipeline can be optimally developed, and our team is committed to enabling that long-term success."

Decibel and Regeneron established their initial collaboration in 2017, with an extension announced in 2021, and are developing three gene therapy programs targeting different forms of congenital, monogenic hearing loss. DB-OTO, which is currently in the global Phase 1/2 CHORDTM clinical trial, is an investigational cell-selective, adeno-associated virus (AAV) gene therapy designed to provide durable, physiological hearing to individuals with profound, congenital hearing loss caused by mutations of the otoferlin gene. Preclinical programs include AAV.103 for people with GJB2-related hearing loss and AAV.104 for people with stereocilin (STRC)-related hearing loss.

"We are delighted to announce the planned acquisition of Decibel, who have been long-standing collaborators, notable for their deep scientific knowledge and commitment to people with hearing loss," said George D. Yancopoulos, M.D., Ph.D., Board co-Chair, Chief Scientific Officer and President of Regeneron. "DB-OTO, our shared lead investigational gene therapy, will soon reach patients in its first clinical trial, offering new promise to children with this rare form of congenital hearing loss, as well as potential proof-of-concept for future gene therapies addressing more common forms of genetic hearing loss. We believe that Decibel’s assets and specialized team will further strengthen our genetic medicines portfolio, enabling Regeneron to accelerate the development of innovative genetic therapies and a rich pipeline of hearing loss treatments."

Congenital hearing loss is a significant unmet medical need with no approved medical therapies that affects approximately 1.7 out of every 1,000 children born in the United States. While hearing loss caused by mutations of the otoferlin gene is rare, the majority of permanent, congenital hearing loss cases diagnosed in developed countries are sensorineural and result from a single gene defect, making them appealing targets for gene therapy. Hearing aids and cochlear implants may offer benefits, but they fall short of replicating normal hearing function.

The merger agreement provides for Regeneron, through its wholly owned subsidiary Symphony Acquisition Sub, Inc., to initiate a tender offer to acquire all outstanding shares of Decibel at a price of $4.00 per share of Decibel common stock payable in cash at closing plus one CVR payable in cash subject to the terms and conditions contained in a contingent value rights agreement ("CVR Agreement"). CVR holders would become entitled to receive contingent payments as follows: (i) $2.00 in cash, upon the fifth participant being administered with DB-OTO in a clinical trial on or prior to December 31, 2024 (the DB-OTO Milestone); and (ii) $1.50 in cash, upon (a) the first participant being administered with DB-OTO in a registration enabling trial (as defined in the CVR Agreement) or (b) acceptance for review of a Biologics License Application by the U.S. Food and Drug Administration, a Marketing Authorization Application by the European Medicines Agency or the U.K. Medicines and Healthcare Products Regulatory Agency, or an equivalent application by the applicable national regulatory authority in any of Germany, France, Italy or Spain for DB-OTO, whichever occurs first, on or prior to December 31, 2028; provided the DB-OTO Milestone is achieved on or prior to December 31, 2024. There can be no assurance that any payments will be made with respect to the CVR. The closing of the tender offer will be subject to certain conditions, including the tender of at least a majority of the outstanding shares of Decibel common stock and other customary closing conditions. Upon the successful completion of the tender offer, Regeneron will acquire all shares not acquired in the tender through a second-step merger for the same consideration per share paid in the tender offer. The transaction is expected to close in the third quarter of 2023.

Regeneron’s legal advisor for the transaction is Wachtell, Lipton, Rosen & Katz. Centerview Partners LLC and Leerink Partners LLC are serving as Decibel’s financial advisors and Wilmer Cutler Pickering Hale and Dorr LLP is serving as Decibel’s legal advisor.