Looking to Stay Afloat, Idera Acquires Rare Disease Biotech Aceragen
September 29, 2022
Idera Pharmaceuticals, which had been considering strategic options after its stock tanked on disappointing late-stage data of its cancer drug, has acquired Aceragen, a privately held company focused on treatments for rare, orphan pulmonary and rheumatic diseases for which there are limited or no available treatments.
The combined cash of the two companies is expected to provide runway into Q3 2023, funding the advancement of Aceragen’s pipeline, including ACG-701 and ACG-801, through important 2023 clinical milestones.
“After a thorough evaluation of strategic alternatives, we and our Board of Directors believe this acquisition represents the highest potential value creation opportunity for Idera’s stockholders,” said Vincent Milano, Idera’s former CEO and newly appointed chair of the Board.
Similar to a reverse merger, the deal is structured as a stock-for-stock transaction whereby all Aceragen outstanding equity interests were exchanged for a combination of shares of Idera common stock, shares of newly designated convertible Series Z preferred stock, and shares of the newly designated Series X preferred stock. Subject to stockholder approval of the conversion and an increase in authorized shares, each share of Series Z preferred stock will automatically convert into 1,000 shares of common stock, subject to certain beneficial ownership limitations set by each holder. Holders of Series X preferred stock are entitled to receive distributions on shares of Series X preferred stock.
On a pro forma basis and based upon the number of shares of Idera common stock and preferred stock issued in the acquisition, Idera equity holders immediately prior to the acquisition will own approximately 33 percent of the combined company immediately after these transactions. The board of both companies unanimously approved the deal. The closing of the transaction was not subject to the approval of Idera stockholders.
Following the acquisition, the company has pro forma cash on hand of approximately $27 million, which is expected to provide cash runway into the third quarter of 2023.
“This is an important transition for Aceragen,” said John Taylor, Idera’s newly appointed CEO and former CEO of Aceragen, “complementing Aceragen’s rare disease programs and dedicated team with financial resources, corporate structure, and people from Idera, better enabling us to deliver important therapies for patients living with rare diseases.”
ACG-701 is a proprietary formulation of sodium fusidate being developed as a potential treatment for acute pulmonary exacerbations (PEx) associated with cystic fibrosis (CF) and for melioidosis, a life-threatening infection caused by the B. pseudomallei pathogen.
The phase 2 REPRIEVE trial of ACG-701 in CF PEx is expected to begin in the fourth quarter of 2022 and is funded in part by an award from the Cystic Fibrosis Foundation. If approved, ACG-701 would represent the first product in the United States indicated for the treatment of CF PEx, a major factor behind lung function decline in patients living with CF. Data from the REPRIEVE study is expected in the second quarter of 2023. The active component of ACG-701, sodium fusidate, has never been approved in the United States, but has been used for 50-plus years with an established clinical efficacy and safety profile ex-US, including as part of CF PEx treatment guidelines in the United Kingdom and Australia. The FDA has assigned Orphan, Fast Track, and Qualified Infectious Disease Product status to ACG-701 for CF PEx.
The melioidosis clinical program for ACG-701 is supported by $51 million in funding from the Defense Threat Reduction Agency due to its potential use as a medical countermeasure. This trial is underway and is targeting an interim analysis in the first quarter of 2023; complete phase 2 data is expected in the second quarter 2023. If approved for this indication, ACG-701 is anticipated to be eligible for a priority review voucher (PRV) and a national stockpiling contract.
ACG-801, recombinant human acid ceramidase, is an investigational biologic enzyme replacement therapy being developed for the treatment of Farber disease, a lysosomal storage disorder and progressive rare disease with profound morbidity and often premature death. Acid ceramidase acts in the lysosome to metabolize ceramide, a pro-inflammatory lipid. Loss of acid ceramidase function leads to abnormal accumulation of ceramide, causing macrophage-driven inflammation and multi-organ disease affecting bone, cartilage, the immune system, central nervous system, and the lungs. There are no Farber disease-specific treatments currently available that can alter the natural history of the disease.
The company expects to initiate the ADVANCE clinical study for ACG-801 in Farber disease in the first quarter of 2023 with data expected in the first quarter of 2024. Due to the ultra-rare nature of Farber disease, this study has the potential to be registrational. The FDA has granted Orphan, Fast Track, and Rare Pediatric Disease designations for ACG-801, which is also anticipated to be eligible for a PRV.
Author: Rare Daily Staff
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