XTL Biopharmaceuticals is buying Kitov Pharmaceuticals in a shares- and cash milestones-based deal worth up to $48 million. Israeli firm Kitov is developing combination drug products, with a focus on hypertension and osteoarthritis-induced pain. Its lead candidate is poised to start in Phase III development under an FDA Special Protocol Assessment. XTL will invest up to $1.5 million to carry out the single planned pivotal trial. Kitov estimates it will cost about $9 million to take the drug through development and approval for marketing.
Under terms of the acquisition deal, Kitov shareholders will receive XTL shares and warrants amounting to 19.9% of the latter’s issued and outstanding share capital, plus cash milestone payments. XTL may make its milestone payments by issuing up to 26.4% of its issued and outstanding share capital. As long as XTL makes good its pledge to fund the pivotal trial of the lead drug, Kitov shareholders will undertake a 12–24-month voluntary lock-up period relating to XTL shares received in the transaction (excluding any milestone-related shares). If, however, XTL doesn’t meet its obligation relating to the trial, the voluntary lock-up period will expire for 50% of the restricted shares allocated to Kitov.
XTL specializes on the acquisition, development, and commercialization of proprietary products and late-stage drug candidates. The firm’s therapeutic focus is on multiple myeloma, schizophrenia, and hepatitis C. Lead product is a recombinant human erythropoietin in development for extending survival and improving quality of life for terminal multiple myeloma patients. A second clinical-stage product, SAM-101, is a combination of antipsychotic drugs and another known drug compound, which is in Phase II development for treating psychotic diseases, primarily schizophrenia.
XTL’s Diversity Oriented Synthesis (DOS) program, focused on the development of small molecule drugs against hepatitis C, was licensed out to Presidio Pharmaceuticals in 2008. Presidio is now responsible for all further development and commercialization activities and costs relating to the DOS program.