Solid Biosciences Acquires AavantiBio and Raises $75 Million in Private Placement
September 30, 2022
Two struggling rare disease focused biotechs, Solid Biosciences and AavantiBio, have entered into a definitive merger agreement whereby Solid will acquire AavantiBio, including its pipeline assets and net cash.
Publicly held Solid Bio is focused on advancing therapies for Duchenne muscular dystrophy while privately held AavantiBio is focused on transforming the lives of patients with Friedreich’s ataxia and rare cardiomyopathies.
The combined company will focus on advancing a portfolio of neuromuscular and cardiac programs, led by SGT-003, a differentiated gene transfer candidate, for the treatment of Duchenne. Additional pipeline programs include AVB-202, a gene transfer candidate for the treatment of Friedreich’s ataxia, AVB-401 for BAG3 mediated dilated cardiomyopathy, and additional assets for the treatment of undisclosed cardiac diseases.
Following approval by Solid stockholders, the combined company will operate as Solid Biosciences, will trade on Nasdaq under the ticker symbol “SLDB” and Bo Cumbo, the current CEO of AavantiBio, will assume the role of president and CEO of Solid Biosciences, as current Solid CEO Ilan Ganot steps down.
“I created Solid with my wife, Annie, and our co-founders nearly ten years ago, to bring meaningful treatment options to patients and families who, like ours, live with the devastating consequences of Duchenne muscular dystrophy,” said Ilan Ganot, president, CEO and co-founder of Solid Biosciences. “This acquisition provides opportunities to bring our potentially best-in-class Duchenne gene transfer candidate, SGT-003, to patients and to expand our portfolio with innovative gene therapies designed to address significant unmet need in additional, adjacent rare disease indications.”
To support the acquisition, Solid said it has entered into a securities purchase agreement with a select group of institutional investors and accredited investors for a $75 million private placement that is expected to close concurrently with the closing of the merger. The private placement is being led by existing investors Perceptive Advisors, RA Capital Management, and Bain Capital Life Sciences, and other new and existing investors participating in the private placement including CaaS Capital Management, Invus, Laurion Capital Management, and Pura Vida Investments.
Pre-combination equity holders of Solid are expected to own approximately 85 percent of the combined company and pre-combination equity holders of AavantiBio are expected to own approximately 15 percent of the combined company, subject to certain adjustments set forth in the merger agreement and in each case before giving effect to the private placement. The merger agreement has been unanimously approved by the Board of Directors of each company, and by the stockholders of AavantiBio.
The acquisition and private placement are expected to close before the end of 2022 with the private placement closing as of immediately following the acquisition, subject to approval by the stockholders of Solid and the satisfaction of other customary closing conditions.
Following the closing of the merger and financing, the total cash and investments of the combined company is expected to be approximately $215 million. Solid expects this will be sufficient to fund the combined company’s planned operating expenses and capital expenditure requirements into 2025 and enable the potential attainment of key milestones for the combined company’s lead programs. The merger and private placement are expected to close in the fourth quarter of 2022, subject to customary closing conditions.
“The Solid team’s commitment to the Duchenne community aligns with AavantiBio’s patient-centric mission of bringing new therapies that can positively improve the quality of life of rare disease patients and their families,” said Bo Cumbo, president and CEO of AavantiBio.
Duchenne is a fatal neuromuscular disease caused by mutations in the gene encoding dystrophin that lead to the absence or near-absence of functional dystrophin protein. Solid said it is pausing development of its first generation gene transfer therapy candidate SGT-001 and prioritizing SGT-003, its next-generation AAV gene transfer therapy candidate that utilizes a rationally designed, novel muscle-tropic AAV capsid, to deliver Solid’s proprietary and differentiated neuronal nitric oxide synthase microdystrophin protein. Solid intends to complete currently ongoing SGT-001 preclinical and manufacturing activities in order to be in a position to reactive the program in the future, if desired. The company anticipates submitting an investigational new drug application for SGT-003 in mid-2023 and, subject to IND clearance, initiating patient dosing in late 2023.
Friedreich’s ataxia is a rare inherited neuromuscular disease that causes progressive nervous system damage and movement problems. AVB-202, AavantiBio’s lead AAV gene transfer therapy candidate in preclinical development, utilizes a dual route of administration to target disease pathology. Preclinical data from three animal models, including mouse and nonhuman primate, supported preclinical proof of concept. Solid is anticipating an IND submission for AVB-202 in the second half of 2024.
BAG3 mediated dilated cardiomyopathy (BAG3) is a rare cardiac disease and is characterized by mutations in the BAG3 gene. Sufficient levels of functional BAG3 are required for healthy cardiac function. AavantiBio is currently developing AVB-401, a preclinical-stage product candidate, for the treatment of BAG3. Following the acquisition of AavantiBio, Solid will continue to develop AVB-401, as well as two early-stage cardiac programs initially developed by AavantiBio as part of its pipeline activities.
Solid will also continue development programs for novel AAV capsids that are expected to enhance select tissue tropism for cardiac and skeletal muscle as well as reduce liver targeting. The first capsid screened in the Solid-based skeletal muscle library is AAV-SLB101, which is used in SGT-003 and has demonstrated increased expression and biodistribution compared with AAV9 in multiple preclinical studies. The company believes this capsid has the potential to be used in other neuromuscular and cardiac indications. In addition, Solid plans to continue current AavantiBio efforts to develop novel AAV cardiac-targeted capsids that enhance select tissue tropism and reduce liver targeting.
Photo: Bo Cumbo, CEO of AavantiBio
Author: Rare Daily Staff
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