Celsus Therapeutics and Volution Immuno Pharmaceuticals SA have announced that they have entered into a Definitive Exchange Agreement, pursuant to which privately-held Volution Immuno Pharmaceuticals will become a wholly-owned subsidiary of Celsus in an all-stock transaction.
The combined company will focus on development and commercialization of life-transforming treatments for a range of rare and orphan autoimmune and inflammatory diseases caused by dysregulation of complement C5, including paroxysmal nocturnal hemoglobinuria (PNH) and atypical Hemolytic Uremic Syndrome (aHUS). Upon closing of the transaction, Celsus expects to be renamed Akari Therapeutics Plc.
"Following an extensive and thorough review of strategic alternatives, we believe the proposed business combination with Volution Immuno Pharmaceuticals provides the best opportunity for positive returns for Celsus shareholders," said Dr. Gur Roshwalb, Chief Executive Officer. "We expect Akari to become a leading company in C5 inhibition by continuing the successful development of our potential best-in-class drug, Coversin, for the treatment of PNH, aHUS, and other orphan indications. The combined company expects to derive significant advantages from the extensive clinical, commercial and transactional expertise of the combined Board and management teams, and I look forward to continuing as Chief Executive Officer.”
Ray Prudo, M.D., Chairman and Chief Executive Officer of Volution Immuno Pharmaceuticals, said, "The enhanced operating capabilities and improved access to public financing markets provided by this merger will provide the resources necessary to accelerate development of Coversin into multiple Phase II clinical trials within the next eighteen months, with data readouts expected from two of these Phase II trials by the end of 2016. We believe that this clinical timing acceleration will help Coversin continue on its current path to become a potential best-in-class C5-Inhibitor for a range of rare and orphan diseases.”
Dr. Prudo will continue as Executive Chairman of Akari. Mark Cohen, the current Chairman of Celsus, said, “We are very excited about the combination of Celsus and Volution, and believe the combined management team of the newly merged company will have the expertise necessary to successfully develop its lead anti-complement small protein, Coversin, to treat a range of rare and orphan diseases and deliver enhanced value to our investors.” Mark Cohen will continue as Vice Chairman of Akari.
Coversin is a second-generation complement inhibitor that acts on complement component-C5, preventing release of C5a and formation of C5b-9 (also known as the membrane attack complex or MAC). C5 inhibition is growing in importance in a range of rare autoimmune diseases related to dysregulation of the complement component of the immune system, including paroxysmal nocturnal hemoglobinuria (PNH), atypical Hemolytic Uremic Syndrome (aHUS), and Guillain Barré syndrome (GBS).
Coversin successfully completed a Phase Ia fixed dose clinical trial in healthy subjects in 2014, and will be used in a follow-up chronic dosing Phase Ib clinical trial in healthy subjects in the second half of 2015. The combined company plans to initiate a compassionate use program in late 2015 to treat patients resistant to Soliris® (eculizumab), the only currently approved treatment for PNH and aHUS. The combined company will then initiate Phase II clinical trials in several indications during 2016, including PNH, aHUS, and GBS.
Details of the Proposed Transaction
On a pro forma basis and based upon the number of shares of Celsus common stock to be issued in the transaction, current Celsus securityholders will own approximately 8.32% of the combined company and current Volution Immuno Pharmaceutical SA securityholders will own approximately 91.68% of the combined company on a fully diluted basis. The transaction has been approved by the Board of Directors of both companies and by RPC Pharma, the sole shareholder of Volution Immuno Pharmaceutical SA. The transaction is expected to close in the third quarter of 2015, subject to the approval of the shareholders of Celsus as well as other customary conditions.
MTS Health Partners, L.P. served as financial advisors, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as legal counsel on US legal matters, and DLA Piper UK LLP on UK legal matters to Celsus. McDermott Will & Emery UK LLP served as legal counsel to Volution Immuno Pharmaceuticals SA with respect to the transaction.
Management and Organization
Following the closing of the transaction, the Akari Therapeutics board of directors will be led by Raymond Prudo, M.D. as Executive Chairman, and Mark Cohen as Vice Chairman. Akari management will be led by Dr. Gur Roshwalb as Chief Executive Officer.