Shares of Arsanis, Inc. stock are up more than 25 percent in premarket trading after the company announced that it will merge with privately-held X4 Pharmaceuticals, Inc. as part of a reverse merger that will provide X4 with a quick path to being traded on the Nasdaq.
Shares of Arsanis, Inc. stock are up more than 25 percent in premarket trading after the company announced that it will merge with privately-held X4 Pharmaceuticals as part of a reverse merger that will provide X4 with a quick path to being traded on the Nasdaq.
The all-stock transaction will allow X4 to merge with a subsidiary of Arsanis, which will then operate under the X4 name. Paula Ragan, president and chief executive officer of X4 will head the combined company. When the deal is complete, X4 will trade on the Nasdaq under a ticker symbol to be announced at a later date. The company will be based in Cambridge, Mass. at the current X4 facility. Additionally, X4 will gain control over Arsanis’ research and development facility in Vienna, Austria.
Ragan said the merger with Arsanis will provide X4 with additional financial resources, as well as bolster its clinical and regulatory teams, as well as its management. Ragan noted that Arsanis’ Vienna, Austria R&D facility will also enhance the company’s capabilities in Europe.
“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,” Ragan said.
Under terms of the deal, current X4 Pharmaceuticals stockholders will own approximately 70 percent of the combined company and current Arsanis stockholders will control 30 percent of the combined company. The merger has been approved by the board of directors of both companies and is expected to close in the first quarter of 2019.
The expanded X4 will continue to focus on the development of X4’s lead product candidate, X4P-001, an investigational CXCR4 allosteric antagonist that is expected to begin Phase III trials in WHIM syndrome in the first half of 2019. WHIM (Warts, Hypogammaglobulinemia, Immunodeficiency, and Myelokathexis) Syndrome is a genetic primary immunodeficiency disease that is caused by a mutation in the CXCR4 receptor, which is the receptor targeted by X4P-001.
“X4P-001 has been shown in a Phase II 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,” X4’s Paula Ragan, president and chief executive officer of X4, said in a statement.
In addition to the lead drug, the strengthened X4 will also focus on the advancement of the company’s pipeline of treatments for rare diseases of the immune system and rare cancers.
For Arsanis, the merger comes a few months after the company scrapped its Phase II trial of ASN100 for the prevention of S. aureus pneumonia in high-risk, mechanically ventilated patients after an independent data review committee analysis determined that the trial was unlikely to reach its stated endpoints.
As Arsanis makes room for X4, the company noted that Michael Gray has taken over the role of president and CEO of the company. René Russo resigned from her top spot to pursue other opportunities. Russo will remain on the Arsanis Board of Directors, the company added.
Gray, the newly installed head of Arsanis, said the proposed merger with X4 will provide company stockholders with an opportunity to realize value as X4 continues to drive forward with its “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,” Gray said in a statement.
