On May 17, 2021 Aerpio Pharmaceuticals, Inc. ("Aerpio") (Nasdaq: ARPO), a biopharmaceutical company focused on developing compounds that activate Tie2, and Aadi Bioscience, Inc. ("Aadi"), a privately-held biopharmaceutical company focusing on precision therapies for genetically-defined cancers with alterations in mTOR pathway genes, reported their entry into a definitive merger agreement (Press release, Aadi, MAY 17, 2021, View Source [SID1234580105]). Following the proposed merger, Aerpio will change its name to "Aadi Bioscience, Inc." and the combined public company will focus on advancing Aadi’s lead product candidate, FYARROTM (sirolimus albumin-bound nanoparticles for injectable suspension; nab-sirolimus; ABI-009).

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In support of the merger, Aerpio has entered into subscription agreements to raise $155 million in a Private Investment in Public Equity (PIPE) financing led by Acuta Capital Partners and KVP Capital and including Avoro Capital Advisors; Avoro Ventures; Venrock Healthcare Capital Partners; BVF Partners, L.P.; Vivo Capital; Alta Bioequities, L.P.; Rock Springs Capital; RTW Investments, LP; Acorn Bioventures; and Serrado Capital LLC as well as other undisclosed institutional investors.

The PIPE financing is expected to be consummated concurrently with the closing of the merger. Proceeds from the PIPE financing are intended to be used for commercialization of FYARRO in advanced malignant PEComa and a planned tumor-agnostic registrational trial in solid tumors harboring inactivating alterations in the mTOR pathway genes TSC1 and TSC2 expected to be initiated by the end of 2021. Aadi’s first indication, advanced malignant PEComa, is an ultra-rare sarcoma enriched in TSC1 and TSC2 alterations. Aadi has received Orphan designation, Fast Track designation and Breakthrough Therapy designation from the FDA for FYARRO for the treatment of patients with advanced malignant PEComa. Together with the cash expected from both companies at closing, the net proceeds of the PIPE financing are expected to fund the company into 2024, enabling potential approval and commercial launch in PEComa as well as completion of a registrational trial in tumors harboring TSC1 or TSC2 inactivating alterations.

Caley Castelein, a board member of Aerpio and the proposed chairman of the combined company stated, "Aerpio’s board of directors diligently undertook a comprehensive strategic review and has concluded that the proposed transaction with Aadi is in the best interest of our shareholders. We believe Aadi’s late-stage development program may offer significant medical benefit to PEComa patients and important potential for patients with tumors harboring TSC1 or TSC2 inactivating alterations."

Dr. Neil Desai, founder and chief executive officer of Aadi, added, "FYARRO met its safety and efficacy endpoints in our study in patients with advanced malignant PEComa2 and this finding supports our approach of targeting mTOR pathway altered cancers with FYARRO. We are excited about the next chapter of growth for Aadi, thankful for the support of our investors, and are energized to continue to develop important new treatment options for our patients."

Anupam Dalal, chief investment officer of Acuta Capital Partners stated, "Together with a group of renowned institutional investors, we are excited to partner with Aadi as it advances FYARRO and strives to unlock the potential of mTOR as a therapeutic target."

Upon closing of the transaction, the combined company will be led by Aadi’s chief executive officer, Neil Desai, and headquartered in Los Angeles, California. Aadi’s board members Neil Desai and Richard Maroun; Aadi’s board observer Karin Hehenberger; and current Aerpio board members Anupam Dalal and Caley Castelein will be members of the board of directors of the combined company. In addition, Behzad Aghazadeh, managing partner of Avoro Capital Advisors and Avoro Ventures, will also join the board of the combined company upon the closing of the transaction.

About the Proposed Transaction

Under the terms of the merger agreement, shareholders of Aadi will receive shares of newly issued Aerpio common stock. On a pro forma basis, shareholders of Aadi will own approximately 66.8% and shareholders of Aerpio will own approximately 33.2% of the combined company upon the closing of the merger, prior to the additional PIPE financing transaction. Following the closing of the concurrent PIPE financing, Aerpio shareholders will own approximately 14.7% of the combined company. The actual allocation is subject to adjustment based on Aerpio’s cash balance at the time of closing.

The terms of the merger agreement contemplate that a non-transferable contingent value right (a "CVR") will be distributed to Aerpio shareholders as of immediately prior to the effective time of the merger, entitling CVR holders to receive net proceeds received by Aerpio, if any, associated with Aerpio’s legacy assets. The terms and conditions of the CVRs will be pursuant to a CVR Agreement Aerpio will enter into prior to the closing of the merger (the "CVR Agreement").

The merger agreement has been approved by the boards of directors of both companies. The transaction is expected to close in the third quarter of 2021, subject to approval by Aerpio’s shareholders, the completion of the PIPE financing, and customary closing conditions. The PIPE financing is expected to close concurrently with, and is conditioned upon, the closing of the merger.

Additional information about the transaction will be provided in a Current Report on Form 8-K that will be filed by Aerpio with the Securities and Exchange Commission ("SEC") and will be available at www.sec.gov.

Ladenburg Thalmann & Co. Inc. is acting as financial advisor to Aerpio for the transaction and Goodwin Procter LLP is serving as its legal counsel. Perella Weinberg Partners LP and Piper Sandler & Co. are acting as financial advisors to Aadi for the transaction and Wilson Sonsini Goodrich & Rosati, P.C. is serving as legal counsel to Aadi. Jefferies LLC; Cowen and Company, LLC; and Piper Sandler & Co. are acting as placement agents for the PIPE financing.

On May 17, 2021 Charles River Laboratories International, Inc. (NYSE: CRL) reported that it has signed a definitive agreement to acquire Vigene Biosciences, Inc., a premier, U.S.-based gene therapy contract development and manufacturing organization (CDMO) providing viral vector-based gene delivery solutions (Press release, Charles River Laboratories, MAY 17, 2021, View Source [SID1234580121]). The purchase price is expected to be $292.5 million in cash, subject to customary closing adjustments. In addition to the initial purchase price, the transaction includes contingent additional payments of up to $57.5 million based on future performance. The transaction is expected to close in the beginning of the third quarter of 2021, subject to regulatory requirements and customary closing conditions.

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James C. Foster, Chairman, President and Chief Executive Officer of Charles River Laboratories, commented, "The addition of Vigene Biosciences’ extensive gene therapy expertise will enable us to expand our comprehensive cell and gene therapy portfolio to span each of the major CDMO platforms – cell therapy, viral vector, and plasmid DNA production. In these emerging, high-growth, value-added segments, we intend to continue to differentiate ourselves by bringing our high-science, customizable approach to support the complex needs of cell and gene therapy developers and innovators worldwide. Our goal is to become our clients’ scientific partner of choice for advanced drug modalities from discovery and non-clinical development to CGMP manufacturing. We look forward to welcoming Vigene’s dedicated employees to the Charles River family."

Strategic Rationale

The acquisition of Vigene Biosciences will enhance Charles River’s gene therapy capabilities in the high-growth, value-added cell and gene therapy CDMO sector.

Expands Charles River’s Gene Therapy CDMO Capabilities for Viral Vectors and Plasmid DNA – Vigene offers its clients contract manufacturing solutions across several key gene therapy platforms, enhancing Charles River’s ability to meet its clients’ evolving scientific needs. Its primary area of expertise is CGMP viral vector manufacturing, which is used for gene therapies and gene-modified cell therapies. Vigene has significant expertise in adeno-associated virus (AAV) CGMP production, which is the most commonly used delivery solution for gene therapies, as well as for other major viral vectors, including lentivirus. Vigene also offers high-quality, research grade and CGMP plasmid DNA, which is a foundational tool used in the development of viral vectors for gene-modified cell therapies, gene therapies, and vaccine production.
Complements Charles River’s existing non-clinical development and manufacturing portfolio – The addition of Vigene will be complementary to Charles River’s existing, non-clinical development and manufacturing capabilities and provide clients access to a comprehensive cell and gene therapy solution. With operations based in Rockville, Maryland, Vigene will geographically expand and be highly complementary to Charles River’s existing gene therapy CDMO capabilities in the United Kingdom and Sweden, which were acquired through the March 2021 acquisition of Cognate BioServices. Vigene will also support Charles River’s existing, U.S.-based cell therapy production capabilities and establish an end-to-end, gene-modified cell therapy solution. In addition, the acquisition will enable clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner, enabling them to achieve their goal of driving greater efficiency and accelerating their speed to market for advanced drug modalities.
Enhances Charles River’s growth potential with increased exposure in the high-growth market sector – Vigene will enhance Charles River’s growth potential by expanding Charles River’s portfolio of comprehensive cell and gene therapy solutions with viral vector and plasmid DNA manufacturing. The addressable market for cell and gene therapy CDMO services, principally for cell therapy, plasmid DNA, and viral vector production, is currently estimated at approximately $2.5 billion globally and is expected to grow at least 25% annually over the next five years.
Expected to drive profitable growth and shareholder value – The acquisition is expected to generate attractive financial returns that are consistent with Charles River’s disciplined investment criteria. It is also expected to be accretive to Charles River’s long-term revenue and earnings per share growth. Vigene is expected to generate annual revenue of $30 to $35 million in 2021, and is expected to grow at least 25% annually over the next five years.
Additional Financial and Transaction Details

Based on the anticipated completion of the acquisition in the beginning of the third quarter, Vigene is expected to add approximately 50 basis points to Charles River’s reported revenue growth rate in 2021. The transaction is expected to be neutral to non-GAAP earnings per share in the first full year after the acquisition closes, and accretive thereafter. Items excluded from non-GAAP earnings per share are expected to include all acquisition-related costs, which primarily include amortization of intangible assets, advisory fees, certain costs associated with efficiency initiatives, and certain third-party integration costs.

The acquisition and associated fees are expected to be financed through Charles River’s existing credit facility and cash. Vigene is expected to be reported as part of Charles River’s Manufacturing segment.

Advisors

Davis Polk & Wardwell LLP is acting as Charles River’s transactional legal counsel, and Weil, Gotshal & Manges LLP is acting as antitrust counsel.

Vigene Biosciences is supported by its institutional investor, Signet Healthcare Partners. Robert W. Baird & Co. is acting as the exclusive financial advisor, and Shulman Rogers and Sheppard Mullin Richter & Hampton LLP are acting as legal counsel to Vigene.

On May 17, 2021 ONK Therapeutics Ltd, an innovative natural killer (NK) cell therapy company, reported that it has entered into a research collaboration with the National University of Ireland, Galway (NUI Galway) which provides access to unique expertise in evaluating the cancer cell microenvironment in Acute Myeloid Leukaemia (AML) and targeting of AML stem cells in models mimicking the bone marrow microenvironment (Press release, ONK Therapeutics, MAY 17, 2021, View Source [SID1234580145]). The research will support the optimization of ONK Therapeutics’ dual-targeted NK cell therapy program, ONKT104, being developed for the treatment of AML.

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ONK Therapeutics will fund a year-long research program in the laboratory of Dr. Eva Szegezdi, lecturer in Biochemistry, NUI Galway, Head of the Blood Cancer Network Ireland. She has particular expertise in the AML microenvironment as well as cell death pathways, especially those initiated by ‘so-called’ death ligands (e.g. TRAIL) used by effector immune cells.

AML is the most common form of acute leukemia in adults. It is estimated that some 21,000 patients in the US and 18,000 in Europe are diagnosed with AML each year. It has a high unmet medical need having the lowest survival rate of all types of leukemia.

ONKT104 is a dual-targeted NK cell engineered to express a humanized scFv targeting the leukemic stem cell antigen CLL-1 (also known as CLEC12A) obtained through an option license agreement from Cellerant Therapeutics, together with ONK Therapeutics’ proprietary high-affinity TRAIL variant, targeting death receptor 4 (DR4). CLL-1 is selectively expressed on leukemic stem cells with no expression on normal hematopoietic stem cells, which ensures safer targeting and a lower risk of prolonged toxicity to normal bone marrow cells. In pre-clinical research studies, a monoclonal antibody therapy targeting CLL-1 has revealed potential efficacy against AML cells and shown to be effective in reducing AML burden in a xenograft model. In addition, a CLL-1 CAR-T cell model has shown promising pre-clinical activity and has recently entered the clinic.

ONK Therapeutics believes its dual-targeted NK cell therapy approach may have several advantages over a CAR-T approach including shorter persistence of NK cells, reducing the risk of sustained neutropenia; proven inherent anti-AML activity of NK cells; the reduced likelihood of toxicity due to cytokine release syndrome or neurotoxicity; and the logistically simpler allogeneic, off-the-shelf nature of NK cells, reducing time to treatment once suitable patients are identified.

AML is a very challenging disease in which to achieve sustained, long term disease control due to the high plasticity and adaptability of AML stem cells, and the tendency for resistant cells to emerge and grow. In addition to targeting CLL-1, this project will evaluate multi-targeted approaches by combined targeting of other leukemia stem cell antigens.

ONK Therapeutics’ founder and CSO Prof Michael O’Dwyer said, "Alongside our in-house research, the project team at NUI Galway will explore construct design, as well as the potential added benefit of certain gene edits to enhance NK cell cytotoxicity, cytokine production and persistence in the context of AML strengthening our ONKT104 program. The aim is to select an optimized candidate to take forward into clinical development as a treatment for patients with relapsed/refractory AML."

Dr. Eva Szegezdi said, "The project will evaluate different constructs that may be able to achieve synergistic killing of cancer cells and reduce the emergence of disease resistance. These include the co-expression of CARs targeting other AML antigens, in addition to CLL-1, such as CD96, TIM3, and CD38 alongside the TRAIL variant."

ONK Therapeutics was formed based on technology and intellectual property developed at NUI Galway by Prof. Michael O’Dwyer, who retains his academic position as Professor of Haematology, Consultant Haematologist and HRB Clinician Scientist, alongside his role at the company. Over the past 12 months, ONK Therapeutics has expanded its team and operations at its headquarters and R&D facility in Ireland’s med-tech hub in Galway, where it now has 16 employees, with an additional 5 employees based in its US subsidiary in San Diego.

On May 17, 2021 ADC Therapeutics SA (NYSE: ADCT), a commercial-stage biotechnology company leading the development of novel antibody drug conjugates (ADCs) to treat hematological malignancies and solid tumors, reported the receipt of the $50 million second tranche under its convertible credit facility with Deerfield Partners, L.P. and certain of its affiliates (collectively, Deerfield) (Press release, ADC Therapeutics, MAY 17, 2021, View Source [SID1234580161]). Under the terms of the Facility Agreement dated April 24, 2020, Deerfield agreed to provide to the Company up to $115 million in financing consisting of two separate tranches. The first $65 million was received upon completion of the Company’s initial public offering in May 2020, and the second tranche of $50 million has now been received following the recent U.S. Food and Drug Administration (FDA) accelerated approval of ZYNLONTA (loncastuximab tesirine-lpyl).

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"Following the recent approval of ZYNLONTA, we are pleased to further strengthen our balance sheet with the $50 million second tranche draw down," said Chris Martin, Chief Executive Officer of ADC Therapeutics. "These funds will support the continued execution of our launch and advancement of our deep pipeline of next-generation ADCs."

Pursuant to a related Registration Rights Agreement with Deerfield, the Company will file a registration statement on Form F-3 with the U.S. Securities and Exchange Commission within 15 days. In the event that in the future Deerfield elects to exercise its conversion option with respect to the convertible notes issued under the Facility Agreement, this registration statement will allow Deerfield to sell the resulting shares. ADC Therapeutics will not sell any securities under this registration statement.

For more information about the Facility Agreement, see the Company’s Annual Report on Form 20-F.

On May 17, 2021 Concert Pharmaceuticals, Inc. (NASDAQ: CNCE) reported that Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) has purchased the potential future milestones under the companies’ 2017 asset purchase agreement relating to VX-561 (deutivacaftor) for $32 million (Press release, Concert Pharmaceuticals, MAY 17, 2021, View Source [SID1234584685]).

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"This transaction provided an opportunity to secure non-dilutive capital and strengthens our balance sheet as we continue to advance CTP-543, our lead asset for alopecia areata, through its Phase 3 program," stated Roger Tung, Ph.D., President and Chief Executive Officer of Concert Pharmaceuticals. "By receiving these proceeds, we now expect our cash, cash equivalents and investments to fund the Company into the second quarter of 2022."

Under the asset purchase agreement, Vertex acquired worldwide development and commercialization rights to VX-561 (formerly known as CTP-656) and other assets related to the treatment of cystic fibrosis. VX-561 is an investigational cystic fibrosis transmembrane conductance regulator (CFTR) potentiator that has the potential to be used as part of future once-daily combination regimens of CFTR modulators that treat the underlying cause of cystic fibrosis. In 2017, Concert received a one-time cash payment of $160 million upon closing the asset purchase, with the potential for $90 million in future milestones. Following receipt of the $32 million, no further milestone obligations remain.

Chestnut Securities, Inc. acted as exclusive financial advisor to Concert in this transaction.