On July 2, 2014 Nicox S.A. (NYSE Euronext Paris: COX) reported it has signed an agreement to acquire all of the outstanding equity of Aciex Therapeutics, Inc., a private, US-based, ophthalmic development pharmaceutical company with a strong near-term pipeline of therapeutics addressing major segments of the ophthalmic market, including allergy and inflammation (Press release, NicOx, JUL 2, 2014, View Source [SID:1234512784]). The acquisition will significantly broaden and strengthen Nicox’s therapeutic development pipeline, which would include two phase 3 candidates (latanoprostene bunod, currently being developed by Nicox’s partner Bausch + Lomb, and Aciex’s AC-170 for allergic conjunctivitis). In addition, the proposed acquisition brings other therapeutic candidates which could enter clinical studies within 12 to 18 months and a collaborative research agreement on preclinical Syk/JAK inhibitors. The completion of the acquisition remains subject to the approval of Nicox’s shareholders and other customary conditions.

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Aciex’s therapeutic pipeline includes:

• AC-170 for allergic conjunctivitis, which has completed two phase 3 trials and for which Nicox plans to seek a pre-NDA meeting before the submission of a New Drug Application (NDA);

• AC-155, in development for post-operative inflammation and pain, which is expected to enter phase 2 studies in 2015;

• A collaborative research agreement with Portola Pharmaceuticals, Inc. for small molecule dual Syk/JAK inhibitors for potential topical ophthalmic treatments;

• A portfolio of clinical and pre-clinical product candidates targeting areas including ocular allergy, dry eye and other inflammatory eye conditions, and

• A proprietary manufacturing process that can be used to repurpose existing drugs by producing novel, patentable nanocrystalline forms.

Michele Garufi, Chairman and Chief Executive Officer of Nicox, said: "This proposed acquisition is another significant step forward in Nicox’s strategy of creating an international ophthalmic company built around therapeutics and diagnostics with its own commercial infrastructure in the United States and in the major European markets. The combination with Aciex would enable Nicox to expand its therapeutic pipeline to target major segments of the ophthalmic sector, including the $816 million US allergic conjunctivitis market1 . Together with the expansion of our diagnostics franchise, this acquisition further enhances our ability to create a unique company with a transatlantic commercial presence as well as a diversified proprietary product portfolio."

Les Kaplan, Ph.D, Executive Chairman of Aciex, and Thomas Cavanagh, President of Aciex, added: "We are excited about the opportunity to combine our robust pipeline derived from our collaboration with Ora, Inc., with the financial and commercial strengths of Nicox. With a portfolio of programs now either in or approaching the clinic, we believe that this transaction will accelerate their development and commercialization. We look forward to working with the Nicox team to ensure the success of the expanded business."

Under the proposed acquisition, Nicox will acquire all outstanding shares of Aciex on a cash-free debt-free basis through a reverse triangular merger, governed by US laws and regulations. Aciex shareholders will receive an upfront payment of $65 million entirely in the form of 20,627,024 newly issued Nicox shares, plus contingent value rights (CVRs) giving right to Nicox shares based on the potential US FDA approval(s) of AC-170 and of two additional undisclosed products within a pre-determined period. These CVRs are defined as follows: $35 million for the US approval of AC 170 on or before the earlier of 18 months after the date of filing of an NDA with the FDA or December 1, 2016; or $10 million if the approval is granted after this date, but on or before the earlier of 30 months after the date of filing of an NDA with the FDA or December 1, 2017; and $10 million each for the following two US product approvals by July 1, 2021. These could potentially bring the total consideration to a maximum of $120 million. In general, and subject to certain negotiated exceptions, the Nicox shares issued to Aciex stockholders will be subject to lock-up restrictions.2
MTS Securities, LLC, an affiliate of MTS Health Partners L.P., is serving as the exclusive financial advisor to Nicox in this transaction. Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. is serving as US legal counsel to Nicox and Clifford Chance Europe LLP is serving as French legal counsel to Nicox. Aquilo Partners, L.P. acted as the exclusive financial advisor to Aciex in this transaction, and WilmerHale is serving as the legal advisor to Aciex. Nicox’s shareholders will be invited to vote on this proposed transaction at a dedicated Extraordinary General Meeting (EGM) which is expected to be held in the Fall. A report containing additional information will be made available to the shareholders prior to the EGM

Additional Therapeutic R&D Pipeline Background

The acquisition of Aciex will complement Nicox’s leading position in the therapeutic application of nitric oxide (NO)-donating compounds for ophthalmic use. Nicox’s lead asset, latanoprostene bunod, is currently in phase 3 trials for the reduction of intraocular pressure in glaucoma and ocular hypertension conducted by its licensing partner Bausch + Lomb. Nicox is also selecting the lead compounds from its internal research portfolio for the next-generation of NO-donors for the treatment of elevated intraocular pressure (IOP).

The combined therapeutic pipeline of Nicox and Aciex will include:

• AC-170 – a novel formulation of cetirizine (a leading antihistamine marketed under brand names including Zyrtec ), being developed for topical application in the eye for the first time for the treatment of allergic conjunctivitis. Two phase 3 safety and efficacy studies have demonstrated statistically significant results for AC-170 over vehicle control for the primary endpoint of ocular itching. Treatment emergent adverse events were similar in severity and frequency in the active and placebo groups. Nicox plans to seek a pre-NDA meeting by Q1 2015.

• Latanoprostene bunod – an NO-donating prostaglandin F2-alpha analog in phase 3 clinical development for the reduction of intraocular pressure in patients with glaucoma and ocular hypertension. Latanoprostene bunod is based on Nicox’s proprietary NO-donating research platform and was licensed to Bausch + Lomb in March 2010. Top-line phase 3 results are expected in Q4 2014.

• AC-155 – a novel nanocrystalline form of fluticasone (a leading corticosteroid marketed under brand names including Flonase and Flovent ), also being developed for topical application in the eye for the first time. It uses Aciex’s proprietary manufacturing process and is being developed for postoperative inflammation and pain. Fluticasone’s approximately ten-fold greater affinity than dexamethasone for the glucocorticoid receptor might allow reducing its dosing frequency. AC-155 is expected, pending FDA agreement, to move directly into a phase 2 clinical trial in 2015, following toxicity studies and IND filing.

• Aciex has a collaborative research agreement with Portola Pharmaceuticals, Inc., signed in 2013, that provides Aciex with exclusive rights to jointly develop Portola’s preclinical small molecule dual Spleen Tyrosine Kinase (Syk) and Janus Kinase (JAK) inhibitors for topical ophthalmic indications. These are targeted at ophthalmic diseases including ocular allergy, dry eye and other inflammatory eye conditions, for which there is a promising potential for Syk and JAK inhibition.

• Aciex’s extensive pipeline includes a number of additional clinical and pre-clinical programs that principally target ocular allergy, ocular inflammation and blepharitis and which offer opportunities for both in-house development and external collaborations. The pipeline has been developed through a close partnership with Ora, Inc., a leading ophthalmic Contract Research Organization (CRO) and development company. Nicox will continue to work closely with Ora following completion of the acquisition.

• Aciex has a proprietary manufacturing process, applicable to certain classes of molecules, which can be used to produce novel, patentable nanocrystalline forms of existing drugs in a number of therapeutic fields, including ophthalmology.

Nicox’s Commercial Presence

The Nicox Group is present in the US and in Europe. The acquisition of Aciex follows the recent expansion of Nicox’s commercial presence for its ophthalmic diagnostics franchise in the US to support its recently launched products, including Sjö for the early detection of Sjögren’s syndrome in patients with dry eye symptoms, and RetnaGene for comprehensive risk assessment for advanced age-related macular degeneration (AMD). The US team also promotes AdenoPlus , launched in late 2012, a point-of-care test to aid in the differential diagnosis of acute conjunctivitis. Two other diagnostic tests, one targeting both adenoviral and allergic conjunctivitis and the other targeting ocular herpes, are in development.

In Europe, Nicox markets Xailin, a proprietary brand of tear lubricants for relief of dry eye symptoms, and AdenoPlus . An additional range of products is also marketed in Italy through the Group’s subsidiary Eupharmed, acquired at the end of 2013. Nicox has established its own commercial sales forces in the US and in Europe’s five largest markets (France, Germany, Italy, Spain, and the UK). In addition, Nicox has already established partnerships with third parties for the marketing and sale of its products in several additional territories including Switzerland, Turkey, Benelux, South Africa and Poland, and Nicox is working on securing distribution agreements in other key international markets, including Japan.

(Press release, Galderma, JUL 2, 2014, View Source [SID:1234503692])

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On July 1, 2014 Transcept Pharmaceuticals, Inc. (Nasdaq: TSPT) and Paratek Pharmaceuticals, Inc., a privately-held biopharmaceutical company, reported that they have entered into a definitive merger agreement under which the stockholders of Paratek will become the majority owners of Transcept and the operations of Transcept and Paratek will be combined (Press release, Paratek Pharmaceuticals, JUL 1, 2014, View Source [SID:1234513488]). As part of the proposed transaction, new investors (including The Baupost Group, Abingworth LLP, and other institutional investors); certain Transcept stockholders (including InterWest Ventures and Roumell Asset Management); and certain Paratek stockholders (including Omega Funds, HBM Healthcare Investments and Aisling Capital) will invest approximately $93 million in the combined organization.

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Glenn Oclassen, Chief Executive Officer and Chairman of the Transcept Board, commented: "Following Transcept’s recent June 3, 2014 special cash dividend of approximately $25.4 million, 2 this transaction with Paratek reflects the continued commitment of Transcept’s Board of Directors and management team to deliver value to Transcept’s stockholders. Under the proposed transaction, Transcept’s stockholders will maintain a meaningful equity ownership stake in Transcept, which will refocus its operations as a late-stage therapeutics company with product candidates we believe possess significant commercial potential. The transaction also provides for our stockholders an additional special cash dividend and the opportunity to realize any upside potential from our INTERMEZZO and TO-2070 assets."

Michael Bigham, Chief Executive Officer and Chairman of the Paratek Board of Directors, commented: "Antibiotic resistance continues to be a growing public health concern worldwide. This transaction provides the financial support necessary for the Phase 3 development of our lead product candidate, Omadacycline, which is an important new once daily, oral and intravenous, broad-spectrum antibiotic for serious community-acquired infections. Omadacycline was designed specifically to address the mechanisms by which bacteria develop resistance to existing antibiotics. The combined organization will have the resources to initiate and complete our planned Phase 3 registration program, as agreed with FDA per Special Protocol Assessments, for both Acute Bacterial Skin and Skin Structure Infections (ABSSSI) and Community-acquired Bacterial Pneumonia (CABP). We will also explore additional potential indications including urinary tract infections (UTI)."

In a joint statement made by Paratek’s lead investors, Richard Lim, Partner at Omega Funds and Matthias Fehr, Partner at HBM Partners, said, "This transaction establishes a well-capitalized public company within which the management of Paratek may progress its late-stage drug pipeline through its pivotal studies. We are excited about the prospects for omadacycline to address the growing need for efficacious, safe and convenient oral and intravenous antibiotic drugs."

About the Transaction

Paratek stockholders will receive newly issued shares of common stock of Transcept in connection with the merger contemplated by the merger agreement. Transcept will issue approximately 167.5 million new shares of its common stock to Paratek stockholders under the exchange ratio formula defined in the merger agreement. Upon the closing of the merger, existing Paratek equity holders are expected to own approximately 37.9 percent of Transcept, the persons investing in Paratek as of immediately prior to the closing of the merger are expected to own approximately 51.7 percent of Transcept, and existing Transcept equity holders are expected to own approximately 10.4 percent of Transcept, each on a fully-diluted basis. The exchange ratio is defined in the merger agreement and is subject to potential adjustments.

The merger agreement also contains further details with respect to a) the cash to be reserved for anticipated merger and holdback expenses of Transcept including patent enforcement expense obligations relating to INTERMEZZO; b) how further payments or royalty payments, if any, that are received relating to the sale of INTERMEZZO and TO-2070 assets will be disbursed 3 to Transcept stockholders of record immediately prior to the Closing; and c) the excess cash that Transcept will distribute via an additional special cash dividend also to such Transcept stockholders of record immediately prior to the Closing.

The executive officers of Transcept will resign from their positions with Transcept upon the closing of the merger, and the executive officers of Paratek will assume their respective positions in Transcept. Paratek Pharmaceuticals, Inc. reported that Michael F. Bigham, Partner at Abingworth LLP, has been appointed as Chairman of the Board of Directors and Chief Executive Officer. In addition, Dr. Evan Loh, Chief Medical Officer (CMO) at Paratek, has been promoted to President and CMO and will continue to serve on the Board of Directors. Following the closing of the merger, the Board of Directors of Transcept is expected to consist of a total of seven members, two of whom will be designated by Transcept prior to the closing of the merger, and five of whom will similarly be designated by Paratek (and which will include the Chief Executive Officer of the combined organization).

The boards of directors of both Transcept and Paratek have unanimously approved the proposed transaction, which is subject to customary closing conditions, including approval by the stockholders of each of Transcept and Paratek. Transcept stockholders holding approximately 43 percent of its outstanding common stock have agreed to vote in favor of the transaction, and a majority of Paratek stockholders, have also agreed to vote in favor of the transaction. Subject to regulatory approvals and customary closing conditions, the transaction is currently expected to close during the second half of 2014.

If the transaction is consummated, Transcept’s name will be changed to Paratek Pharmaceuticals, Inc., and Transcept intends to apply to change its ticker symbol on The NASDAQ Global Market to "PRTK".

Transcept was advised in the transaction by Leerink Partners, LLC and Paratek was advised by Ladenburg Thalmann & Co. Latham & Watkins LLP served as legal counsel to Transcept and Pepper Hamilton LLP served as legal counsel to Paratek. Cooley LLP and Ropes & Gray LLP served as legal counsels to certain investors.

On July 1, 2014 Seragon Pharmaceuticals whereby Seragon will be acquired for $725 million in cash up front along with $1.0 billion in contingent development milestone payments that could bring the total transaction value to $1.725 billion (Press release, Seragon Pharmaceuticals, JUL 1, 2014, View Source [SID:1234503263]). The acquisition includes Seragon’s entire SERD program, including its most advanced compound, ARN-810, a next generation SERD that is currently being evaluated in a Phase I trial in patients with estrogen receptor positive (ER+) metastatic breast cancer.

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Seragon, founded in August 2013, is an independent venture backed biotech company based in San Diego that was spun out of Aragon Pharmaceuticals, following its acquisition by Johnson & Johnson. Following the spin out, Seragon retained many members of the management and R&D team, including Richard A. Heyman, Ph.D., Chief Executive Officer and co-founder of Aragon and Seragon Pharmaceuticals. The Seragon team focused its attention to develop game changing therapies targeting ER+ breast cancer and other estrogen driven cancers including endometrial and ovarian cancers.

"This acquisition represents an ideal transition between biotech and pharma and may provide an optimal outcome for the SERD program and the breast cancer patient community. The Seragon team has been committed to bringing new therapies to cancer patients and we are excited to have Genentech carry forward these programs. Genentech has repeatedly demonstrated its leadership position the oncology field, and their development and commercial capabilities in the breast cancer area are unparalleled," said Rich Heyman.

In the US alone, there are approximately 229,000 new breast cancer diagnoses and 40,000 deaths/year related to breast cancer. The vast majority of these cancers are dependent on estrogen signaling and women with ER+ breast cancer are treated with 1st generation anti-hormonal therapies such as tamoxifen or the aromatase inhibitors. These therapies are initially effective, but many patients experience disease progression due to acquired resistance. Seragon’s SERDs are next generation therapies that have a dual mechanism of action in that they both bind to the estrogen receptor to antagonize hormone action, and they promote receptor degradation. These SERDs are initially being developed for the treatment of women with late-stage, progressive ER+ metastatic breast cancer, but they also have potential in treating patients with early-stage breast cancer. Furthermore they also may offer an opportunity to be the cornerstone for future combination therapies.

"I would like to sincerely acknowledge Rich and the entire Seragon team for their commitment and dedication in advancing the ground breaking science behind both Seragon and Aragon. In just five years since the founding of Aragon, in The Column Group’s offices, this team has advanced multiple compounds from an early idea to a clinical development program targeting hormone dependent cancers. I would also like to thank Dr. Charles Sawyers for his foundational work helping to elucidate the molecular determinants of resistance for hormone dependent prostate cancer. This is an ideal path, which will hopefully translate to improving the lives of patients," said Peter Svennilson, Founder and Managing Partner of The Column Group and Chairman of both Seragon and former Chairman of Aragon.

The closing of the transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to close in the third quarter of 2014.

Wilson Sonsini Goodrich & Rosati served as legal advisor to Seragon Pharmaceuticals in this transaction.