– Merger Expected to Create
NASDAQ-listed, Late-stage Biopharmaceutical Company Focused on Rare
Diseases and Cancer –
Arsanis, Inc. (Nasdaq: ASNS) and privately-held X4 Pharmaceuticals,
Inc., a clinical-stage biopharmaceutical company focused on the
discovery and development of novel therapeutics designed to improve
immune cell trafficking to treat rare diseases and cancer, today
announced that they have entered into a definitive merger agreement
under which X4 Pharmaceuticals is expected to merge with a
wholly-owned subsidiary of Arsanis in an all-stock transaction. The
merger would result in a combined company operating under the X4
Pharmaceuticals name that will focus on the development and
commercialization of X4’s lead product candidate, X4P-001, and the
advancement of X4’s pipeline of treatments for rare diseases of the
immune system and rare cancers.
“X4 has pioneered the development of novel, oral
drug candidates targeting pathways that have been demonstrated to
improve immune cell trafficking and restore healthy immunity in
genetically-driven rare diseases and lymphomas. Our lead product
candidate, X4P-001, is expected to begin a Phase 3 trial in WHIM
syndrome in the first half of 2019,” said Paula Ragan, PhD,
president and chief executive officer of X4 Pharmaceuticals. “WHIM
syndrome is a serious, genetic primary immunodeficiency disease
that is caused by a mutation in the CXCR4 receptor, the precise
pathway targeted by X4P-001. X4P-001 has been shown in a Phase 2
clinical trial to increase neutrophils and lymphocytes in the blood
and decrease wart lesions, a hallmark symptom of WHIM syndrome. In
addition to WHIM syndrome, we believe there are other primary
immunodeficiencies in which the CXCR4 receptor is implicated and
therefore may be treatable with X4P-001.”
Dr. Ragan continued, “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. 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.”
X4 Pharmaceuticals is a privately-held
biopharmaceutical company 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.
In addition to the merger agreement, Arsanis
announced today that Michael P. Gray has been appointed to the
position of president and chief executive officer, effectively
immediately. Mr. Gray will also join the Arsanis Board of Directors
and will continue to serve in his existing role as chief financial
officer. Mr. Gray succeeds René Russo, PharmD who has resigned as
president and chief executive officer to pursue other
opportunities. Dr. Russo will remain on the Arsanis Board of
Directors.
“I would like to thank René for her leadership
at Arsanis, both as chief development officer previously and more
recently as president and chief executive officer, and wish her the
best in her future endeavors,” said Tillman U. Gerngross, Chairman
of the Arsanis Board of Directors.
Michael Gray, president and chief executive
officer of Arsanis, said, “Following an extensive review of
strategic alternatives, we believe the proposed merger with X4
Pharmaceuticals would provide Arsanis stockholders the opportunity
to potentially realize value as X4 continues to execute on its
promising new approach to rare disease and cancer therapy via the
CXCR4 immune pathway. We are confident that X4’s experienced
senior management team will lead the combined company to future
success. We are also pleased that X4 has expressed interest
in retaining certain members of our clinical development and
regulatory staff as well as our scientific team in Vienna, Austria,
a team which has deep expertise in the research of virally-mediated
infections, as demonstrated by Arsanis’ on-going ASN500
collaboration with the Bill & Melinda Gates Foundation.”
About the Transaction:
On a pro forma basis and based upon the number
of Arsanis shares to be issued in the merger, current X4
Pharmaceuticals stockholders are expected to own approximately 70%
of the combined company and current Arsanis stockholders are
expected to own approximately 30% 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.
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.
Leerink Partners acted as exclusive financial
advisor and WilmerHale LLP served as legal counsel to Arsanis.
Stifel acted as exclusive financial advisor and Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C. served as legal counsel to X4
Pharmaceuticals.
Management and
Organization:
Following the merger, Paula Ragan, X4
Pharmaceuticals’ president and chief executive officer, is expected
to become president and chief executive officer of the combined
company. The board of directors is expected to be comprised of
seven directors, including Rene Russo and David McGirr, both
currently serving on Arsanis’ board. Upon closing of the
transaction, the merged company will operate under the X4
Pharmaceuticals name and 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, and X4 will maintain Arsanis’ research and development
facility in Vienna, Austria.
Conference Call and
Webcast:
The companies will host a conference call to
discuss the proposed transaction as well as X4’s platform and
pipeline assets on Tuesday, November 27, 2018 at 8:30 a.m. U.S.
EST. The live webcast can be accessed on the Events &
Presentations page of Arsanis’ website or by dialing (866) 688-4431
(U.S.) or (409) 217-8327 using the conference ID number 4067628.
The conference call and webcast will include presentation slides
that can be viewed through the webcast; please log-in to the
webcast in order to view the accompanying presentation. The
conference call and corresponding webcast will be archived on the
Arsanis website for 30 days following the call and can be accessed
on the Events & Presentations page of Arsanis’ website or by
dialing (855) 859-2056 (U.S.) or (404) 537-3406.
About X4 Pharmaceuticals
X4 Pharmaceuticals is developing novel
therapeutics designed to improve immune cell trafficking to treat
rare diseases and cancer. X4’s oral small molecule drug candidates
antagonize the CXCR4 pathway, which plays a central role in immune
surveillance. X4’s most advanced product candidate, X4P-001, is in
a Phase 2 clinical trial in patients with WHIM syndrome, a rare
genetic, primary immunodeficiency disease, and is currently under
investigation in multiple clinical trials in solid tumors. X4P-001
is expected to begin a Phase 3 trial in WHIM syndrome in the first
half of 2019. X4 was founded and is led by a team with deep product
development and commercialization expertise, including several
former members of the Genzyme leadership team, and is located in
Cambridge, MA. For more information, visit www.x4pharma.com.
About Arsanis
Arsanis, Inc. is a clinical-stage
biopharmaceutical company focused on applying monoclonal antibody
(mAb) immunotherapies to address serious infectious diseases.
Arsanis possesses a deep understanding of the pathogenesis of
infection, paired with access to what Arsanis believes to be some
of the most advanced mAb discovery techniques and platforms
available today. Arsanis’ pipeline is comprised of mAbs
targeting multiple serious bacterial and viral pathogens, including
respiratory syncytial virus.
Arsanis is a U.S. company headquartered in
Waltham, Massachusetts, with a wholly owned subsidiary that is
primarily focused on discovery research in Vienna, Austria (Arsanis
Biosciences GmbH).
For more information, please visit the Arsanis
website at www.arsanis.com.
Participants in the
Solicitation:
Arsanis, X4 Pharmaceuticals and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the holders of Arsanis common
stock in connection with the proposed transaction. Information
about Arsanis’ directors and executive officers is set forth in
Arsanis’ Annual Report on Form 10-K for the year ended December 31,
2017, which was filed with the SEC on March 9, 2018, and the proxy
statement for Arsanis’ 2018 annual meeting of stockholders, which
was filed with the SEC on April 23, 2018. Other information
regarding the interests of such individuals, as well as information
regarding X4 Pharma’s directors and executive officers and other
persons who may be deemed participants in the proposed transaction,
will be set forth in the proxy statement/prospectus/information
statement, which will be included in Arsanis’ registration
statement when it is filed with the SEC. You may obtain free copies
of these documents as described in the paragraph below.
Important Additional Information About
the Transaction Will be Filed with the SEC:
In connection with the proposed transaction,
Arsanis will file with the SEC a Registration Statement on Form S-4
that will include a proxy statement and a prospectus of Arsanis and
an information statement of X4 Pharmaceuticals and certain of its
affiliates (the “X4 Pharmaceuticals Parties”), and the parties may
file with the SEC other relevant documents concerning the proposed
transaction. Arsanis will mail the definitive proxy
statement/prospectus/information statement to the Arsanis
stockholders and the X4 Pharmaceuticals Parties equity
holders. ARSANIS STOCKHOLDERS AND X4 PHARMACEUTICALS PARTIES
EQUITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND
PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT REGARDING THE
PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders may obtain a free copy
of the proxy statement/prospectus/information statement (when
available) and other filings containing information about Arsanis
at the SEC’s website at www.sec.gov. The proxy
statement/prospectus/information statement (when available) and the
other filings may also be obtained free of charge by
contacting: Arsanis, Inc., 890 Winter Street, Suite 230,
Waltham, MA 02451, Attention: Investor Relations.
Additional information regarding the interests
of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the
proxy statement/prospectus/information statement regarding the
proposed transaction when it becomes available. Free copies of this
document may be obtained as described in the preceding
paragraphs.
NO OFFERS OR SOLICITATIONS
This communication shall not constitute an offer
to sell or the solicitation of an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements in this communication
regarding the proposed merger and other contemplated transactions
(including statements relating to satisfaction of the conditions to
and consummation of the proposed merger; the expected ownership of
the combined company; the alternatives to the proposed
merger; the expected benefits of the merger; the management and
organization of the combined company; the initiation, cost, timing,
progress and results of X4’s development activities, nonclinical
studies and clinical trials; the potential benefits that may be
derived from any product candidates; X4’s strategy to advance
strategic collaborations; and the strategies, goals, prospects,
plans, expectations, forecasts or objectives of Arsanis, X4 or the
combined company), constitute “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act), and are
usually identified by the use of words such as “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “may,” “plans,”
“projects,” “seeks,” “should,” “will,” “would,” and variations of
such words or similar expressions. We intend these forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 27A of the
Securities Act and Section 21E of the Exchange Act and are making
this statement for purposes of complying with those safe harbor
provisions. These forward-looking statements reflect our current
views about our plans, intentions, expectations, strategies and
prospects, which are based on the information currently available
to us and on assumptions we have made. Although we believe that our
plans, intentions, expectations, strategies and prospects as
reflected in or suggested by those forward-looking statements are
reasonable, we can give no assurance that the plans, intentions,
expectations or strategies will be attained or achieved.
Furthermore, actual results may differ materially from those
described in the forward-looking statements and will be affected by
a variety of important risks and factors that are beyond our
control.
Risks and uncertainties for Arsanis, X4 and the
combined company include, but are not limited to, the: inability to
complete the proposed merger and other contemplated transactions;
liquidity and trading market for shares prior to and following the
consummation of the proposed merger; costs and potential litigation
associated with the proposed merger; failure or delay in obtaining
required approvals by the SEC or any other governmental or
quasi-governmental entity necessary to consummate the proposed
merger, including our ability to file an effective proxy
statement/prospectus/information statement in connection with the
proposed merger and other contemplated transactions, which
may also result in unexpected additional transaction expenses and
operating cash expenditures on the parties; failure to obtain the
necessary stockholder approvals or to satisfy other conditions to
the closing of the proposed merger and the other contemplated
transactions; a superior proposal being submitted to either party;
failure to issue Arsanis’ or the combined company’s common stock in
other contemplated transactions exempt from registration or
qualification requirements under applicable state securities laws;
risks related to the costs, timing and regulatory review of the
combined company’s nonclinical studies and clinical trials;
uncertainties in obtaining successful clinical results for product
candidates such as X4P-001 and unexpected costs that may result
therefrom; inability or the delay in obtaining required regulatory
approvals for product candidates such as X4P-001, which may result
in unexpected cost expenditures; failure to realize any value of
certain product candidates developed and being developed, in light
of inherent risks and difficulties involved in successfully
bringing product candidates to market; inability to develop new
product candidates; inability to commercialize and launch any
product candidate that receives regulatory approval, including
X4P-001; the combined company’s anticipated capital expenditures,
its estimates regarding its capital requirements and its need for
future capital; uncertainties of cash flows and inability to meet
working capital needs; cost reductions that may not result in
anticipated level of cost savings or cost reductions prior to or
after the consummation of the proposed merger; the approval by the
U.S. Food and Drug Administration and European Medicines Agency and
any other similar foreign regulatory authorities of other competing
or superior products brought to market; risks resulting from
unforeseen side effects; risk that the market for the combined
company’s products may not be as large as expected; inability to
obtain, maintain and enforce patents and other intellectual
property rights or the unexpected costs associated with such
enforcement or litigation; inability to obtain and maintain
commercial manufacturing arrangements with third party
manufacturers or establish commercial scale manufacturing
capabilities; inability to establish and maintain licensing,
collaboration or similar arrangements on favorable terms and the
inability to attract collaborators with development, regulatory and
commercialization expertise; inability to successfully
commercialize any approved product candidates, including their rate
and degree of market acceptance; unexpected cost increases and
pricing pressures; the possibility of economic recession and its
negative impact on customers, vendors or suppliers; and risks
associated with the possible failure to realize certain benefits of
the proposed merger, including future financial, tax, accounting
treatment, and operating results. Many of these factors that
will determine actual results are beyond Arsanis’, X4’s, or the
combined company’s ability to control or predict.
Other risks and uncertainties are more fully
described in Arsanis’ Annual Report on Form 10-K for the year ended
December 31, 2017, filed with the SEC, and in other filings that
Arsanis makes and will make with the SEC in connection with the
proposed transactions, including the proxy
statement/prospectus/information statement described above under
“Important Additional Information About the Transaction Will be
Filed with the SEC.”
Existing and prospective investors are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The statements made
in this press release speak only as of the date stated herein, and
subsequent events and developments may cause our expectations and
beliefs to change. While we may elect to update these
forward-looking statements publicly at some point in the future, we
specifically disclaim any obligation to do so, whether as a result
of new information, future events or otherwise, except as required
by law. These forward-looking statements should not be relied upon
as representing our views as of any date after the date stated
herein.
Arsanis Media Contact: W2O Group Elliot Fox, 212-257-6724
efox@purecommunications.com
Arsanis Investor Contact: Michael Gray, 781-819-5201 President
and Chief Executive Officer mike.gray@arsanis.com
X4 Pharmaceuticals Contact: Kathryn Morris 914-204-6412
kathryn@theyatesnetwork.com
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