Arcturus to go public through merger with Alcobra
- San Diego-based Arcturus Therapeutics, Inc. has inked a deal to merge with struggling Israeli pharma Alcobra Ltd, lining up a path to access public markets through Alcobra's Nasdaq listing.
- Shareholders in Arcturus will own about 60% of the new entity and current Arcturus chief Jospeh Payne will take the helm of the combined company, which will take Arcturus' name.
- Arcturus has developed a platform for delivering RNA therapeutics and plans to use the combined resources from the merger to advance development in infectious disease, cystic fibrosis and liver disease.
Alcobra has had a rough few years. Back in January, Alcobra shares shed half their value when the company's drug, metadoxine extended release (MDX), failed to beat placebo in a late stage study of adult attention deficit hyperactivity disorder (ADHD).
This came on the heels of a full clinical hold for its Phase 3 MEASURE study in ADHD and followed a 2015 setback for MDX in a Phase 2 study testing the drug in ADHD linked with Fragile X syndrome. As a result, Alcobra made the decision in June 2017 to review strategic alternatives, including looking at the potential for a merger.
Alcobra only has two products in its pipeline: the rather challenged MDX and abuse-deterrent amphetamine immediate-release (ADAIR), which could have potential but faces a crowded and under-scrutiny market.
Arcturus appears to have been more attracted by the Israeli company's listing on Nasdaq than its drug portfolio, making this effectively a reverse merger.
That perspective was borne out in a conference call with analysts, which focused on Arcturus' pipeline.
Arcturus CEO Joseph Payne said the new company will focus on leveraging its position in RNA drug development, leaning on its collaborations with Ultragenyx Pharmaceutical, Inc., Takeda Pharmaceutical, Inc and the Cystic Fibrosis Foundation.
"Our partnerships expand the reach of our technology … while helping to fund our internal rare disease pipeline, which will be the primary driver of future shareholder value," Payne said. "We look to partner our high patient population diseases with a large pharma partners and retain our rare disease programs internally."
The new company's cash position will be about $40 million at closing, which Payne believes is sufficient to fund the company into early clinical development.
When asked directly about Alcobra's programs, Payne said the company would look to monetize ADAIR. "That will provide funding to continue developing ADAIR and providing ownership interest to current Alcobra investors," he said.
- Alcobra Ltd. and Arcturus Therapeutics, Inc. Press release
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