Cytos Biotechnology Ltd. and Kuros Biosurgery Holding AG have announced their intention to combine their businesses by way of an exchange of Kuros shares for new Cytos shares, subject to shareholder approval and other customary conditions.
Cytos is listed on the main segment of the Swiss stock exchange (SIX Swiss Exchange) while Kuros is a privately-held company based in Zurich. The combined entity will operate under the name "Kuros Biosciences AG" ("Kuros Biosciences").
As a result of the combination, the shareholders of Cytos will have ownership in a leading biosciences company in the field of tissue repair and regeneration. The combination has attractive prospects based on a late stage pipeline of products that are targeting a number of key market opportunities, such as sealants and orthobiologics (bone healing).
Kuros’ late-stage pipeline has already generated highly encouraging data in multiple clinical studies:
• Kuros’ most advanced product candidate is KUR-023, a novel biomaterial designed to seal the dura (membrane covering the brain and spinal cord) after brain and spinal surgery that has successfully completed a European clinical study and is being prepared to be CE Marked in preparation for commercial launch.
• KUR-111 and KUR-113, Kuros’ most advanced orthobiologic products, have most recently been successfully tested in large, controlled Phase 2b clinical trials and are now progressing towards Phase 3 clinical development.
In addition to this attractive clinical pipeline, the combined company will have several product candidates in pre-clinical development. Kuros Biosciences will continue all partnerships Cytos has entered into, in particular the two collaborations for CYT003 and the VLP technology with Checkmate Pharmaceuticals in Cambridge, MA, USA, for the treatment of cancer and with Arbutus Biopharma in Burnaby, British Columbia, Canada (formerly Oncore Pharmaceuticals), for the treatment of hepatitis B infections. With those two collaborations, the CYT003 program and VLP technology will move forward with investment from the collaboration partners and, if successful, Kuros Biosciences will be eligible for significant development milestone payments and royalties on future sales.
The combined company will be led by the existing Kuros executive management team with Kuros’ CEO, Didier Cowling, taking the role of new group CEO, Alistair Irvine as Chief Business Officer and Jason Schense as Chief Technology Officer. All current members of the Cytos management staff will cease their executive roles when the combination is completed.
At a shareholders' meeting of Cytos scheduled to take place in January 2016, Cytos’ current CEO and Chairman, Christian Itin, will remain as Chairman of the Board of Kuros Biosciences and Harry Welten, Cytos CFO, will be proposed for election as a non-executive Board member. Following the combination, and subject to their election, the Board of Kuros Biosciences will consist of Christian Itin (Chairman), Dominik Ellenrieder (Vice Chairman), Didier Cowling, Harry Welten, Arnd Kaltofen, Jörg Neermann, Gerhard Ries and Vincent Ossipow.
Christian Itin, Chairman of Cytos’ Board of Directors, stated: “Following a thorough strategic review, Cytos’ Board and management have concluded that a combination with Kuros is the most promising option for Cytos to establish a business with the potential to create long-term value for Cytos’ shareholders. We are confident that the proposed combination is in the best interest of Cytos shareholders.”
Arnd Kaltofen, Chairman of Kuros’ Board of Directors, added: "Going public was the next logical step in developing Kuros into a leading player in its business segment. The planned combination will allow Kuros not only to access the Swiss public market smoothly, but also add significant Board expertise and further revenue potential through Cytos’ existing licensing deals."
Didier Cowling, CEO of Kuros, commented on the proposed transaction: “Kuros has built a diversified and clinically tested product pipeline with significant revenue potential in attractive markets. The support that we are receiving from our shareholders in the proposed transaction confirms our confidence in our product candidates, business model and management team. The proposed combination with Cytos gives us access to the public capital markets and thereby achieves a key step in Kuros’ development.”