Avalanche Biotechnologies will acquire Annapurna Therapeutics, the companies said today, in a $105.6 million deal that will create a combined company with an expanded gene therapy pipeline.
The merged company will combine Avalanche’s four gene therapy programs for ophthalmic diseases with Annapurna’s gene therapies for several disorders: Alpha1-antitrypsin (A1AT) deficiency, cardiomyopathy associated with Friedreich’s ataxia, hereditary angioedema, and severe allergies.
“We are looking forward to working together to drive our combined current programs forward,” Avalanche President and CEO Paul B. Cleveland said in a statement. “At the same time, we are seeking to expand our pipeline further through additional licenses and acquisitions that complement our expertise in vector development and optimization platforms, process development and manufacturing.”
Cleveland will serve as CEO of the combined company while Annapurna President and CEO Amber Salzman, Ph.D., will hold the positions of president and COO. Both will serve on the board of directors of the combined company, which will be headquartered in Menlo Park, CA, where Avalanche is now based.
“Our businesses are highly complementary, and this transaction enables us to combine the best assets of both companies as we drive toward the development of new gene therapies in multiple disease areas, including rare diseases,” Dr. Salzman stated.
Avalanche agreed to acquire all outstanding shares of Annapurna in exchange for approximately 17.6 million newly issued shares of Avalanche common stock. Shares of Avalanche closed Friday at $6 a share, which would value the acquisition at $105.6 million.
The deal has been approved unanimously by the boards of directors of both companies and is expected to close in the second quarter of 2016—subject to approval of issuing Avalanche common stock by the company’s shareholders, and other customary closing conditions.
Upon completion of the deal, existing Avalanche shareholders will own 62.5% of the combined company, with the remaining 37.5% to be owned by Annapurna shareholders.
As of December 31, 2015, Avalanche had approximately $258 million in cash—a sum expected to fund the combined company’s programs for at least the next 36 months, according to Avalanche and Annapurna.
Avalanche and Annapurna also announced several appointments set to occur after completion of the acquisition:
- Carlo Russo, M.D., Annapurna’s CMO and head of development, will serve as evp and CMO of the combined company.
- Mehdi Gasmi, Ph.D., Avalanche’s interim CSO, will be named CTO.
- Ronald Crystal, M.D., an Annapurna co-founder who is chairman of genetic medicine and the Bruce Webster Professor of Internal Medicine at Weill Cornell Medicine, will serve as a scientific adviser.
- Mitchell H. Finer, Ph.D., managing director of MPM Capital, co-founder and distinguished research fellow at Avalanche and a gene therapy pioneer, will join the combined company’s board.
- Mark Blumenkranz, M.D., chairman of Avalanche’s board of directors, co-founder of Avalanche and H. J. Smead Professor of Ophthalmology at Stanford University, will chair the combined board.
- The board will expand to nine members, consisting of five current Avalanche directors—Dr. Blumenkranz, Mr. Cleveland, John McLaughlin, Steven Schwartz, M.D., and Paul Wachter—and four new directors, Dr. Salzman, Dr. Finer, Bong Koh, M.D., a partner at Venrock, and Thomas Woiwode, Ph.D., managing director at Versant Ventures.