Rare Daily Staff
Publicly-traded Arsanis and privately-held X4 Pharmaceuticals have agreed to a reverse merger in an all-stock transaction that would result in a combined company focused on therapies for rare diseases of the immune system and rare cancers.
The merged company will operate under the X4 Pharmaceuticals name and Paula Ragan, president and CEO of X4 Pharmaceuticals, is expected to serve as president and CEO of the combined company.
Under the terms of the agreement, current X4 Pharmaceuticals stockholders are expected to own approximately 70 percent of the combined company and current Arsanis stockholders are expected to own approximately 30 percent of the combined company. The actual allocation will be subject to adjustment based on each company’s outstanding equity ownership and Arsanis’ net cash balance at the time of closing of the merger.
Following the merger, the board of directors is expected to include seven directors, with Rene Russo and David McGirr, both currently serving on Arsanis’ board. The company’s common stock is expected to trade on the Nasdaq Global Market under a ticker symbol to be announced at a later date. The corporate headquarters will be located in Cambridge, Massachusetts at X4 Pharmaceuticals’ existing facility. X4 will maintain Arsanis’ research and development facility in Vienna, Austria.
X4 Pharmaceuticals is developing oral, small molecule drug candidates that inhibit the binding of chemokine CXCL12 to C-X-C receptor type 4 (CXCR4), a receptor-ligand pair that plays an essential role in normal immune surveillance. X4’s lead product candidate, X4P-001, is expected to enter a phase 3 clinical trial in the first half of 2019 for the potential treatment of Warts, Hypogammaglobulinemia, Immunodeficiency, and Myelokathexis (WHIM) syndrome, a rare genetic, primary immunodeficiency disease where patients become susceptible to certain types of viral and bacterial infections due to genetic mutations in the CXCR4 receptor gene.
X4 also has additional rare disease programs based on CXCR4 biology in its development pipeline, including programs targeting other primary immunodeficiency diseases and rare lymphomas. In addition, X4 is exploring the use of X4P-001 in immuno-oncology, having completed phase 1b studies for the treatment of melanoma and renal cell carcinoma (RCC), including in combination therapy, and has an ongoing phase 2a study in RCC expected to read out in mid-2019.
“The merger with Arsanis would provide X4 with additional financial resources, bolster our management, clinical development and regulatory teams and enhance our research and development capabilities in Europe through Arsanis’ Vienna facility,” said X4 CEO Ragan. “We believe this merger has the potential to be a transformative transaction for X4 that would position us well as we embark on the initiation of our global phase 3 program and develop commercialization plans in WHIM syndrome and as we further develop our pipeline for other rare disease indications.”
In addition to the merger agreement, Arsanis announced that Michael Gray has been appointed to the position of president and chief executive officer, effectively immediately. Gray will also join the Arsanis board of directors and will continue to serve in his existing role as chief financial officer. Gray succeeds René Russo, who has resigned as president and CEO to pursue other opportunities. Russo will remain on the Arsanis Board of Directors.
The transaction has been approved by the board of directors of both companies. The merger is currently expected to close in the first quarter of 2019, subject to the approval of the stockholders of each company and the satisfaction or waiver of other customary conditions.
November 27, 2018
Photo: Paula Ragan, president and CEO of X4 Pharmaceuticals