Cash-strapped antibiotics player Entasis could go private with a small-dollar buyout offer on the table
It looks like antibiotics player Entasis may be getting off Nasdaq the same way it arrived — with a whimper.
Entasis revealed in an SEC filing that Innoviva, the holding company that already owns a good chunk of its shares, is offering to acquire all of its outstanding stock and take the biotech private.
At $1.80 per share, Innoviva’s non-binding proposal comes at a 23% premium to Entasis’ current trading price, which represents just a fraction of its IPO price back in 2018.
Spun out from AstraZeneca, Entasis was run by a group of survivors from an antibiotics division that got cut out of the Big Pharma after commercial flops cast dark shadows on the future of the field. Gloomy sentiments translated to a disappointing public debut as the biotech priced shares below the proposed range at $15 apiece and raised $75 million by upsizing the offer.
As the precipitous fall in stock price suggests, it hasn’t been able to get enthusiasm up since then, despite inking a deal with China’s Zai Lab and steering two lead programs to Phase III.
Execs reported cash and cash equivalents of $44.1 million as of Sep. 30, 2021 — good for keeping the company afloat until Q2.
Innoviva came to its rescue a couple times to fuel the development of its pathogen-targeted antibacterial product candidates: sulbactam-durlobactam (SUL-DUR) for carbapenem-resistant Acinetobacter baumannii infections and zoliflodacin for uncomplicated gonorrhea, including infections caused by drug-resistant strains of Neisseria gonorrhoeae, among others.
The biotech recently reported positive late-stage results for SUL-DUR, paving the way for an NDA filing in mid-2022.
According to the document, Entasis had 47,637,629 shares of common stock outstanding as of Nov. 1, 2021, plus warrants to purchase 10 million shares previously acquired by Innoviva.
On top of the cash needed to buy those shares, Innoviva told Entasis it would be prepared to provide “not less than” $15 million in financing to support product development and operations while the deal is being finalized.
