F-star's Eliot Forster maps a shortcut to Wall Street, bagging more cash to fuel oncology pipeline work
F-star Therapeutics has found a short cut to Wall Street, working out a reverse deal with the struggling Spring Bank Pharmaceuticals that offers new avenues to landing more investor cash.
Spring Bank’s stock plummeted last December when the pharma encountered safety problems during a Phase IIb trial of its hepatitis B drug, inarigivir soproxil, highlighted by a patient death. It stopped administering doses when three patients developed “hepatocellular dysfunction and an elevation of alanine transaminase (ALT) potentially consistent with liver injury rather than immune flares,” and eventually scrapped the program altogether while shifting focus to an early-stage STING program.
The biotech’s travails, though, are F-star’s opportunity. New F-star CEO Eliot Forster, a prominent UK biotech exec who had run Immunocore for awhile, has been pointing the company to its in-house oncology R&D work after his predecessor struck a string of impressive licensing deals.
“Our objective was to create a strategic combo that would yield a stronger company with the potential to create medicines for patients with cancer while increasing shareholder value,” said Spring Bank CEO Martin Driscoll in a call with analysts Thursday morning.
Under the definitive share exchange agreement, pending stockholder approval, Spring Bank would acquire all of F-star’s outstanding share capital in return for shares of Spring Bank. The combined company will operate as F-star Therapeutics, Inc., with four main drugs in the pipeline and Forster at the helm. The companies expect to close the deal with $40 million in cash, with a concurrent $25 million financing deal to help.
Spring Bank stockholders would receive contingent value rights (CVRs) relating the pharma’s STING agonist, SB 11285, which is currently is in a Phase I/II clinical trial.
“The first CVR represents the right to receive a potential future cash payment of at least $1.00 per share (on a pre-reverse split basis) if the combined company consummates one or more strategic transactions for SB 11285 aggregating at least approximately $18.0 million within a certain period following the closing. The second CVR gives Spring Bank stockholders the right to receive 80% of the net proceeds from a potential development agreement and from one or more strategic transactions related to the STING antagonist research program that are consummated within a certain period following the closing of the combination,” Driscoll said in a prepared statement.
Here’s what’s in the pipeline, as listed by the new owners:
- FS118, a LAG-3/PD-L1-targeting tetravalent bispecific antibody, currently in Phase I development
- FS120, a Phase I-ready dual T cell agonist tetravalent bispecific antibody targeting OX40 and CD137
- FS222, a conditional agonist targeting CD137 and PD-L1 expected to enter first in human trials in the first quarter of 2021
- SB 11285, a novel IV-administered STING agonist, currently in a Phase I/II clinical trial for the treatment of solid tumors