The Israeli company Biosite and the American company Advaxis, both companies in the field of cancer, announced a merger. Advexis is traded on the Nasdaq at a value of $ 68 million, and Biosite is merging into it as an alternative to the IPO on the Nasdaq it planned.
The merger gives Biosite a value of about $ 280 million, and Biosite investors will receive 75% of the merged company. There are about $ 50 million in Advaxis’ coffers. As stated, the merger is an alternative to an IPO on the Nasdaq that the company has planned in the past.
Dr. Pini Orbach, director of the pharma division at Arkin Holdings, the investment company of billionaire Murray Arkin, explains that “the IPO market has cooled down a bit, especially for Israeli companies. Only very strong companies that belong to prominent American funds can issue now. We did not want to get into such a move that could waste a company a lot of time without having certainty.
“There was a possibility of merging into SPAC, a special acquisition company, but the value we asked for was too high for them. We were not willing to compromise. It is also a very competitive process, which could also have taken quite some time.
“And yet we wanted to be part of the U.S. market with access to capital that exists on NASDAQ, and we found Adbacis, whose $ 50 million in cash allows us to reach all of the company’s milestones in the near future. The value of $ 280 million is an added value for investors of the last round, valued at $ 110 million. The dilution is 25%. “Probably if we had gone public, the dilution would have been higher.”
Other shareholders in the company besides Arkin Holdings are the IBF Fund, of which one of its senior executives, Prof. David Sidransky, was previously chairman of Advocacy, the SBI Fund, the Phoenix, Migdal, the Primera Fund, Dovi Zehavi and Raya Strauss.
Biosite does not refer to adbexis as a stock market skeleton. “They have experienced management, and their CEO, Kenneth Berlin, will become the CEO of Biosite. Their medical vice president will also continue in the company and promote the products they brought to the deal, while our medical vice president will promote the products we bring. “The company will be called Biosite, and priority will be given to our products. Their products are currently in clinical trials, and we will wait for the results to see if we continue with them.”
The leading product that Biosite is bringing to the deal is aspirate, which is in clinical trials for the treatment of AML leukemia. The product is a combination of citrine chemotherapy, and another amino acid that causes the drug to be active only when it is broken down in the body, and the breakdown is gradual over several hours. This allows for effective levels of the drug in the blood, without the need to give a high dose at the beginning of treatment. Citarbine is an effective drug but usually breaks down quickly in the body, so in classical treatment it should be given in high and very toxic doses, so much so that many of the patients can not bear it at all.
According to Auerbach, in Phase II trials, efficacy trials conducted at several centers including in the U.S. have yielded good results, including a complete remission of the disease in 40% of patients. In these trials patients are in a very difficult condition, which is an impressive response. In side effects. No hair loss, no digestive effects, “says Auerbach.
“The product works,” he adds confidently. “This is an Israeli drug that will be approved, the first Israeli cancer drug that has been approved since Doxil in 1995 (except for Eurogen’s drug, where the emphasis is less on the novelty of the drug but on the method of transmission).”
In parallel with the AML trial, the company will begin trials with MSD, which is the precancerous condition of AML, and through treatment at this stage it may be possible to prevent the onset of cancer. The company will also start testing whether the product is also suitable for the treatment of solid tumors, ie cancers that are not related to the blood system.
Biosite has been managed to date by Dr. Ruth Ben Yakar. The technology was developed by the company’s founder Dr. Stella Gangrinovich.
LifeSci Capital LLC has served as the sole financial advisor to Adbaxis. Morgan, Lewis & Bockius LLP and Herzog Fox Neeman serve as legal advisors to Advocacy. White & Case and Horn & Co. serve as legal counsel to Biosite.