On October 19, 2022 Ayala Pharmaceuticals, Inc. (Nasdaq: AYLA) (Ayala), a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare tumors and aggressive cancers and Advaxis, Inc. (OTCQX: ADXS) (Advaxis), a biotechnology company devoted to the discovery, development and commercialization of immunotherapies based on a technology which uses engineered Listeria monocytogenes, reported that they have entered into a definitive merger agreement (Press release, Ayala Pharmaceuticals, OCT 19, 2022, View Source [SID1234622166]). The merger would result in a combined company that will focus predominantly on the development and commercialization of Ayala’s lead program AL102 for the treatment of desmoid tumors and Advaxis’s candidate ADXS-504 in development for prostate cancer.
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Kenneth A. Berlin, President and Chief Executive Officer of Advaxis, said, "Advaxis took a thorough approach in our quest to find the right partner with the right products. This merger is expected to enhance Advaxis’s portfolio of clinical assets, with Ayala’s proprietary gamma secretase inhibitors that are being developed as targeted therapies for rare and aggressive tumors. Ayala’s lead candidate, AL102, is currently being investigated in the Phase 2/3 RINGSIDE study in desmoid tumors, which we believe will accelerate the stage of product development for the combined company dramatically. We are particularly excited about very promising interim data from RINGSIDE, which showed that AL102 monotherapy had meaningful anti-tumor activity with tumor shrinkage in the majority of patients that appeared to be deepening over time. The combined management team has extensive commercial and R&D experience, and we believe we have the cash to advance the combined portfolio through key milestones in 2023, including longer-term data from Part A of RINGSIDE, clarity on the registration path for AL101 in recurrent/metastatic adenoid cystic carcinoma (ACC) and initial clinical and PSA data from the Phase 1 trial of ADXS-504 in prostate cancer. We believe that this transaction will also help drive our efforts to return to a Nasdaq listing and enhance our ability to access capital."
Roni Mamluk, Ph.D., President and Chief Executive Officer of Ayala commented, "We are pleased to announce the proposed merger with Advaxis, which is expected to provide our pipeline and AL102 with additional financial resources as well as additional infrastructure in the U.S. The two companies have a shared mission to develop innovative therapies to improve the lives of patients with cancer and I believe we have found a good partner to advance our pipeline and create value for our stakeholders."
Additional Transaction Details
Subject to the terms and conditions of the merger agreement, at the closing of the merger, each outstanding share of Ayala common stock will be converted into the right to receive shares of common stock of Advaxis based on the exchange ratio set forth in the merger agreement. Upon completion of the merger, Ayala stockholders will own approximately 62.5% of the combined company’s outstanding common stock and Advaxis stockholders will own approximately 37.5%, subject to the terms of the merger agreement. Advaxis will, at the effective time of the merger, assume the outstanding restricted stock units and stock options of Ayala, subject to the terms of the merger agreement. No fractional shares will be issued in connection with the merger and Advaxis will pay cash in lieu of any such fractional shares. The merger is intended to qualify for U.S. federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.
Consummation of the merger is subject to certain closing conditions, including, among other things, approval by the stockholders of Ayala. At the closing of the merger, Ayala will be delisted from The Nasdaq Global Market. The combined company’s common stock is expected to begin trading on the OTCQX at the effective time of the merger, subject to Advaxis’ planned efforts to have the stock of the combined company listed on Nasdaq, as to which no assurances can be made.
Management and Board of Directors
At the effective time of the merger, the executive officers of the combined company will include Mr. Kenneth A. Berlin, President, Chief Executive Officer and Director; Andres Gutierrez, M.D., Ph.D., current Chief Medical Officer of Advaxis; and Igor Gitelman, Interim Chief Financial Officer of Advaxis. Roni Mamluk, Ph.D., Founder and Chief Executive Officer of Ayala, and Yossi Maimon, Chief Financial Officer of Ayala will resign their positions and will help with the transition. Gary Gordon, M.D., Chief Medical Officer of Ayala, will also resign his position but is expected to continue in an advisory role for a period of time. The board of directors of the combined company is expected to consist of seven members: two designated by Advaxis, four designated by Ayala, and Mr. Berlin.
Conference Call and Webcast
There will be a conference call and webcast at 8:00 a.m. Eastern Time today, Wednesday, October 19, 2022, with Advaxis and Ayala to discuss the merger and respond to questions.
Webcast Link
The webcast will also be archived for a period of 90 days on the Investor Relations web pages of Advaxis (View Source) and Ayala (View Source).