Zevra to Acquire Acer, Expanding its Rare Disease Portfolio and Adding Commercial Product
August 31, 2023
Rare Daily Staff
Zevra Therapeutics and Acer Therapeutics have entered into a definitive agreement in which Zevra would acquire Acer in a merger transaction having a total potential value for Acer stockholders of up to $91 million.
“We believe that Acer’s portfolio of rare disease programs, including the recent U.S. commercial approval of Olpruva for urea cycle disorders, is a perfect strategic fit for Zevra and creates significant opportunity for us to positively impact patient lives while creating shareholder value,” said Joshua Schafer, chief commercialization officer and executive vice president of Business Development of Zevra Therapeutics.
The acquisition of Acer, which has been approved by both boards of directors, includes an upfront payment of $15 million in Zevra stock plus contingent value rights (CVRs) and Zevra’s purchase of Acer’s secured debt. Zevra will assume commercialization efforts of Olpruva, which was recently approved for the treatment of urea cycle disorders.
Urea cycle disorders UCDs are a group of rare, genetic disorders that can cause harmful ammonia to build up in the blood, potentially resulting in brain damage and neurocognitive impairments, if ammonia levels are not controlled. Olpruva is an oral suspension used along with certain therapy, including changes in diet, for the long-term management of adults and children with UCDs involving deficiencies of carbamylphosphate synthetase, ornithine transcarbamylase, or argininosuccinic acid synthetase.
“This merger would support Zevra’s vision of becoming a leading rare disease company bringing life-changing therapies to patients with a significant unmet need,” said Christal Mickle, Zevra’s interim CEO and chief development officer. “The commercial launch of Olpruva in the U.S. requires a small, highly-focused commercial team, which is complementary to what we intend to build for arimoclomol, our product candidate for the treatment of Niemann-Pick disease Type C (NPC). We believe there is potential to realize significant synergies across our commercial organizations as both UCDs and NPC are metabolic related conditions and there is overlap among those physicians that treat both disorders.”
The merger is expected to accelerate Zevra’s pathway to becoming a commercial-stage company by adding OLPRUVA, an FDA-approved asset, which is expected to add to Zevra’s revenue. There are potential synergies to be realized by combining Acer’s operations with Zevra’s capabilities in preparation for the potential launch of arimoclomol, Zevra’s orally-delivered, first-in-class investigational product candidate for the treatment of NPC, an ultra-rare and progressive, neurodegenerative lysosomal storage disorder characterized by an inability of the body to transport cholesterol and other lipids within the cell, leading to an accumulation of these substances in various tissue areas, including brain tissue.
The acquisition also adds Edviso, a phase 3 program for vascular Ehlers-Danlos Syndrome, to Zevra’s rare disease clinical pipeline.
Under the terms of the definitive agreement, at closing, Zevra would issue 0.121 of a share of Zevra’s common stock in respect of each share of Acer’s common stock. In addition, Acer stockholders of record as of immediately prior to the effective time of the merger would receive non-transferable CVRs entitling the holders to receive up to $34 million in cash upon the achievement of certain commercial milestones for OLPRUVA, and up to an additional $42 million in cash upon the achievement of certain regulatory milestones for Olpruva and Edsivo. Based on the number of Zevra shares issued and outstanding as of June 30, 2023, together with the equity issued as part of the debt acquisition, the aggregate number of shares issuable to Acer stockholders in the merger is expected to represent approximately 7.6 percent of the issued and outstanding common stock of Zevra following the merger.
To provide for a smooth transition and uninterrupted operations, and subject to certain conditions, Zevra has extended a bridge loan facility to Acer of up to $16.5 million to provide additional working capital to, among other things, support the commercial launch of Olpruva until the expected closing of the merger transaction, and to provide the $10 million payment to Acer’s termination of the 2021 collaboration and license agreement by and between Acer and Relief Therapeutics, and Acer’s related entry into an exclusive license agreement with Relief for the development and commercialization rights for Olpruva in geographical Europe.
Photo: Christal Mickle, Zevra’s interim CEO and chief development officer
Sign up for updates straight to your inbox.