Eleven Biotherapeutics has acquired Viventia Bio, the companies said today, in a deal that creates a combined developer of cancer therapies based on antibody fragments genetically fused to cytotoxic proteins, or targeted protein therapeutics (TPTs).

Eleven purchased all outstanding Viventia stock in exchange for 4,013,431 newly issued shares of the buyer’s common stock—valuing the company at $13.5 million based on Eleven’s closing share price yesterday of $3.37. Eleven also agreed to pay selling shareholders post-closing cash payments tied to achieving milestones and net sales of one of Viventia’s two lead product candidates, Vicinium.

The combined company—which will retain the Eleven Bio name—will include Vicinium and Viventia’s other lead candidate Proxinium, as well as the acquired company’s earlier-stage pipeline of next-generation TPT candidates, designed to treat a broader spectrum of cancer types.

Vicinium is the subject of a Phase III clinical trial for high-grade, nonmuscle-invasive bladder cancer (NMIBC), with topline data expected to be available in the first half of 2018. Proxinium is expected to enter Phase II development early next year for late-stage squamous cell carcinoma of the head and neck.

Both product candidates are anti-epithelial cell adhesion molecule (anti-EpCAM) fusion proteins that have been optimized for local tumor administration. Proxinium has received Orphan Drug Designation from the European Medicines Agency and FDA, which has also granted its Fast Track designation for the candidate.

“Eleven performed an extensive review of our strategic alternatives, and our Board of Directors believes that the acquisition of Viventia offers Eleven shareholders a compelling opportunity for enhancing long-term value,” Abbie Celniker, Ph.D., a member of Eleven’s Board of Directors and the company’s former President and CEO, said in a statement.

Dr. Celnicker added that the combined company will continue an up-to-$270 million collaboration with Roche announced in June and effective in August. The pharma giant agreed to license exclusively Eleven’s most advanced preclinical product candidate EBI-031, a treatment for diabetic macular edema (DME) and uveitis.

Eleven said it has received $30 million in payments from Roche, including a $7.5 million upfront payment tied to the effectiveness of the license agreement, and a $22.5 million milestone payment based on the IND application for EBI-031 becoming effective.

In connection with the acquisition, Eleven’s board has named Stephen Hurly, formerly Viventia’s CEO, to be Dr. Celnicker’s successor as president and CEO.

Hurly and Leslie L. Dan—Viventia’s former executive chairman and largest beneficial owner before the acquisition—were named to the combined company’s board. An entity affiliated with Dan is now the second-largest shareholder in the new company.

Arthur P. DeCillis, M.D., Viventia’s CMO, was appointed to the same position with the combined company, while Karen L. Turbidy, Eleven’s CDO, has resigned, and will be succeeded by the person who held a similar position with Viventia, Gregory Adams Ph.D. Also joining Eleven’s management team from Viventia will be CSO Glen MacDonald, Ph.D.

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