Arsanis, Inc. 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, 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.
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.
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.