Roni Mamluk, Ayala Pharmaceuticals CEO

Two pub­lic biotechs seek to merge, fo­cus­ing on desmoid tu­mors. But Nas­daq is not guar­an­teed

Two biotechs are look­ing to merge ear­ly next year, and as ne­go­ti­a­tions are on­go­ing, in­vestors still need to sign off on the deal.

On­col­o­gy-fo­cused Ad­vax­is is in the ear­ly stages of merg­ing with Ay­ala, a biotech in­cor­po­rat­ed in Delaware that has its pri­ma­ry op­er­a­tions lo­cat­ed in Is­rael.

Ken Berlin

Ad­vax­is CEO Ken Berlin told in­vestors and an­a­lysts in a con­fer­ence call Wednes­day morn­ing that he had re­viewed “a num­ber of busi­ness de­vel­op­ment op­por­tu­ni­ties to de­ter­mine how best to ad­vance Ad­vax­is to a lat­er stage com­pa­ny,” adding that the biotech be­lieves the merg­er with Ay­ala is the best way to go about it.

Berlin tells End­points News that the plan is to have every­thing sort­ed out with­in 90-120 days, or the end of Jan­u­ary — and the merg­er still de­pends on whether Ay­ala’s share­hold­ers sign off on the deal.

How it will work with hav­ing two com­pa­nies on Nas­daq, un­der tick­ers $ADXS and $AY­LA, is that Ay­ala, a pen­ny stock biotech and down 24% Wednes­day morn­ing, would delist. While it will list on the OTC­QX once the merg­er is ef­fec­tive, the fi­nal goal is for the com­bined com­pa­ny to be list­ed on Nas­daq. How­ev­er, the com­pa­nies not­ed that go­ing on­to Nas­daq is not guar­an­teed.

Shares of Ad­vax­is, a pen­ny stock ter­ri­to­ry biotech with shares over $2 each, shot up 16% Wednes­day morn­ing be­fore tem­per­ing back down to an 8% in­crease.

Ay­ala share­hold­ers will get a com­bined 62.5% of the new com­pa­ny, while Ad­vax­is share­hold­ers get the re­main­ing 37.5%. Berlin says these things are all ne­go­ti­at­ed.

“So they think they’re bring­ing a great as­set — and they are — and they should get val­ue for that,” Berlin not­ed, adding that part of the ne­go­ti­a­tion in­clud­ed ask­ing what it would have tak­en for Ay­ala to raise the $20 mil­lion Ad­vax­is al­ready had on hand.

What the com­bined com­pa­ny will be go­ing af­ter, once every­thing is all said and done, is AL102, a lead pro­gram Ay­ala is bring­ing to the ta­ble to treat desmoid tu­mors. It’s al­so the same type of tu­mor Spring­Works is tar­get­ing, re­cent­ly rais­ing $225 mil­lion via pri­vate place­ment and pre­sent­ing in­fo at ES­MO ear­li­er this year.

Ay­ala CEO Roni Mam­luk added on the con­fer­ence call that Ay­ala’s drug is cur­rent­ly in a Phase II/III reg­is­tra­tional tri­al called RING­SIDE. And that once the pro­posed merg­er is com­plete, Ay­ala will keep its op­er­a­tions in Is­rael.

As for how the merg­er came about, Berlin re­mained mum, telling End­points it was com­ing in the proxy state­ment and “that will take time to draft.”

An­oth­er drug that will be con­sid­ered an op­tion for the new pro­posed en­ti­ty, Berlin told End­points, is ADXS-504, an Ad­vax­is vac­cine for prostate can­cer, which is cur­rent­ly be­ing looked at in a Phase I in­ves­ti­ga­tor-spon­sored tri­al, or IST, at Co­lum­bia Uni­ver­si­ty. Berlin added that the in­ves­ti­ga­tor, Mark Stein, has worked with Ad­vax­is pro­grams be­fore, when the biotech had pre­vi­ous­ly part­nered with Mer­ck.

Berlin added in the mean­time that in or­der to pre­dom­i­nant­ly fo­cus on AL102, Ad­vax­is is wind­ing down ADXS-503, a can­di­date that was be­ing in­ves­ti­gat­ed for NSCLC. Oth­er can­di­dates are op­tions, says Berlin, but AL102 is the pri­ma­ry fo­cus.

Ad­vax­is has been in trou­ble of its own over the years. af­ter se­cur­ing a $540 mil­lion deal with Am­gen back in 2016, the FDA put a clin­i­cal hold on a Phase I/II tri­al af­ter a pa­tient death in 2018. Am­gen then backed out of the deal lat­er that year.

A pro­posed merg­er was ini­tial­ly vot­ed on and passed by share­hold­ers with Is­raeli biotech Biosight, but Ad­vax­is said a sec­ond vote for the re­verse split por­tion did not pass with share­hold­ers.

Late Fri­day ap­proval; Trio of biotechs wind down; Stem cell pi­o­neer finds new fron­tier; Biotech icon to re­tire; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

I hope your weekend is off to a nice start, wherever you are reading this email. As for me, I’m trying to catch the tail of the Lunar New Year festivities.

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Pfiz­er lays off em­ploy­ees at Cal­i­for­nia and Con­necti­cut sites

Pfizer has laid off employees at its La Jolla, CA, and Groton, CT sites, according to multiple LinkedIn posts from former employees.

The Big Pharma confirmed to Endpoints News it has let go of some employees, but a spokesperson declined to specify how many workers were impacted and the exact locations affected. Earlier this month, the drug developer had confirmed to Endpoints it was sharpening its focus and doing away with some early research on areas such as rare disease, oncology and gene therapies.

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Jake Van Naarden, Loxo@Lilly CEO

Lil­ly en­ters ripe BTK field with quick FDA nod in man­tle cell lym­phoma

Eli Lilly has succeeded in its attempt to get the first non-covalent version of Bruton’s tyrosine kinase, or BTK, inhibitors to market, pushing it past rival Merck.

The FDA gave an accelerated nod to Lilly’s daily oral med, to be sold as Jaypirca, for patients with relapsed or refractory mantle cell lymphoma.

The agency’s green light, disclosed by the Indianapolis Big Pharma on Friday afternoon, catapults Lilly into a field dominated by covalent BTK inhibitors, which includes AbbVie and Johnson & Johnson’s Imbruvica, AstraZeneca’s Calquence and BeiGene’s Brukinsa.

Eliot Forster, F-star CEO (Rachel Kiki for Endpoints News)

F-star gets down to the wire with $161M sale to Chi­nese buy­er as na­tion­al se­cu­ri­ty con­cerns linger

With the clock ticking on F-star Therapeutics’ takeover by a Chinese buyer, the companies are still scrambling to remove a hold on the deal from the US government’s Committee on Foreign Investment in the United States.

F-star and invoX Pharma said they are “actively negotiating” with CFIUS “about the terms of a mitigation agreement to address CFIUS’s concerns regarding potential national security risks posed by the transaction.”

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No­var­tis' ap­proved sick­le cell dis­ease drug fails to beat place­bo in PhI­II

Novartis’ sickle cell drug, approved in 2019 and branded as Adakveo, has failed an ongoing Phase III, according to preliminary results.

The Swiss pharma giant unveiled early data from the ongoing STAND Phase III study on Friday, saying that crizanlizumab showed no statistically significant difference between the drug at two different dose levels compared to placebo in annualized rates of vaso-occlusive crises that lead to a healthcare visit over the first year since being randomized into the trial.

Filip Dubovsky, Novavax CMO

No­vavax gets ready to take an­oth­er shot at Covid vac­cine mar­ket with next sea­son plans

While mRNA took center stage at yesterday’s FDA vaccine advisory committee meeting, Novavax announced its plans to deliver an updated protein-based vaccine based on new guidance.

Vaccines and Related Biological Products Advisory Committee (VRBPAC) members voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all future vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

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FDA ap­proves an­oth­er in­di­ca­tion for Keytru­da, this time in the ad­ju­vant NSCLC set­ting

Merck’s blockbuster cancer treatment Keytruda has been handed another indication by the FDA.

The US regulator announced on Thursday that it has approved Keytruda to serve as an adjuvant treatment for non-small cell lung cancer (NSCLC), which is its fifth indication in NSCLC and 34th indication overall.

According to a Merck release, the approval is based on data from a Phase III trial, dubbed Keynote-091, which measured disease-free survival in patients who received chemotherapy following surgery. The data from Merck displayed that Keytruda cut down on the risk of disease recurrence or death by 27% versus placebo.

Alon Seri-Levy, Sol-Gel Technologies CEO

Bridge­Bio com­pa­ny sells off rare dis­ease can­di­date to Gal­der­ma part­ner

Israeli biotech Sol-Gel Technologies announced Friday that it got its hands on a rare disease drug candidate from PellePharm for almost $75 million, amid claims that the drug has the potential to reach a $300 million market.

Execs said on a conference call Friday morning that patidegib, a hedgehog signaling pathway blocker, is being investigated to treat Gorlin syndrome, a rare genetic disorder that increases the risk of developing certain kinds of cancer such as basal cell skin cancer and medulloblastoma, a type of brain cancer. The disease affects around one in every 31,000 people, and an estimated 70,000 people worldwide.

Ying Huang, Legend CEO

J&J, Leg­end say Carvyk­ti beat stan­dard ther­a­py in ear­li­er-line blood can­cer

J&J and Legend Biotech’s next step in turning their CAR-T therapy Carvykti into a potential megablockbuster has succeeded, the companies said Friday.

Carvykti achieved the primary endpoint — progression-free survival — in an open-label Phase III study testing the treatment in second- to fourth-line multiple myeloma patients. The CARTITUDE-4 trial, for which there aren’t any hard data yet, represents the biggest development for Carvykti’s ability to compete with Bristol Myers Squibb’s Abecma since its approval last February.