Dive Brief:
- Aravive and Versartis Biologics have signed a definitive agreement to merge the clinical-stage oncology biopharma with a wholly-owned Versartis subsidiary in an all-stock transaction.
- The new company, which will be known as Aravive Inc., with be headed up by Jay Shepard, Versartis president and CEO, and will be based in Houston.
- The merger is expected to be complete in the second half of 2018, with both companies owning around half of Aravive Inc. Versartis' share price spiked 24% on the news before paring back some of those gains to close at about $1.50 a share.
Dive Insight:
Versartis has had a challenging year. The company's share price is down nearly 93% from September 2017, when its human growth hormone somavaratan did not meet the primary endpoint of a study in pediatric growth hormone deficiency. The Phase 3 VELOCITY trial pitted twice-monthly somavaratan against Pfizer's once-daily Genotropin (somatropin).
The failure of the study pushed Versartis into a restructuring plan, which included layoffs of about two-thirds of the staff, along with further cost-cutting measures. This concluded in the reverse merger with Aravive Biologics, with Versartis providing the shell company, the NASDAQ listing and the experience, and Aravive Biologics providing the pipeline.
"The combined company offers a compelling pipeline, as well as talent and financial resources to advance the clinical development program to multiple important inflection points over the next 24 months," said CEO of Versartis Jay Shepard in a statement.
Aravive Inc. will kick off with a lead cancer program at clinical proof-of-mechanism stage. This compound focuses on inhibiting the GAS6-AXL signaling axis, which is thought to be involved in tumor growth and proliferation.
The next step for lead candidate AVB-S6-500, currently in Phase 1, is to move into an expanded clinical development program in combination with standard-of-care treatment on a number of tumor types. This is expected to begin with the Phase 1b portion of an early study in ovarian cancer in the second half of 2018. Other studies are planned for 2019.