Viropro said today it agreed to acquire NovaRx, a developer of immuno-oncology treatments—one of which the buyer intends to assess through a new Phase III trial—for an undisclosed all-stock price.
The planned acquisition comes more than eight months after Viropro announced the start of a restructuring in which it said it would “initiate a series of acquisitions in order to provide Viropro shareholders with a risk-diversified exposure to a number of promising businesses with significant potential upside.
Viropro has struggled to recover from the seizure of the Penang, Malaysia, facility of subsidiary Alpha Biologics by lender Bank Pembangunan Malaysia Berhad (BPMB). The seizure followed a series of break-ins that Viropro blamed “in part on previous management’s failure to pay utility bills and provide adequate security.”
NovaRx’s pipeline is led by the lung cancer vaccine Lucanix, one of several allogeneic tumor cell vaccines developed by the company. In those vaccines, the expression of the immunosuppressor TGF-β is downregulated, which is supposed to enable the vaccine to induce strong immune responses that lead to increased survival.
While Lucanix aced a Phase II trial by showing a significant improvement in survival for patients with non-small cell lung cancer, a multi-site, multi-national Phase III trial failed to meet its primary endpoint.
In a statement announcing the deal, Viropro said it believes the failure was “attributable to protocol violations at a number of sites in Eastern Europe and elsewhere.
“The company's management believes that a properly designed and administered Phase III study will result in a statistically significant demonstration of progression free survival that will be suitable for regulatory approval,” Viropro stated. “Subject to raising sufficient capital, the company intends to initiate that trial in accordance with standard FDA procedures.”
Also in NovaRx’s pipeline are Glionix, a therapeutic vaccine for glioma poised to begin a Phase II/III trial; and a universal tumor cell vaccine designed to treat most cancer indications.
Headquartered in San Diego, NovaRx was founded in 1997 by Habib Fakhrai, Ph.D., and Emmet O'Neal III to commercialize the research of Dr. Fakhrai and associates at the Sidney Kimmel Cancer Center and the University of California, Los Angeles.
Dr. Fakhrai, the scientific founder of NovaRx, will retain the position of CSO following the deal, while Justin Murdock, a major investor in NovaRx, will be Chairman of the NovaRx Board. The combined company will have a Board of Directors with three members to be appointed by NovaRx, three by Viropro and one by mutual consent.
After the acquisition, Viropro will own all outstanding shares of NovaRx or its successor company. NovaRx shareholders will own 25% of Viropro's total outstanding shares as of the date of the closing.
Either three years from the closing or the achievement of specific clinical milestones, whichever comes earlier, Viropro will spin-out NovaRx as an independent entity, with Viropro retaining 25% of the outstanding shares of the new NovaRx.
The deal is expected to close by year’s end, subject to approval by both companies of definitive documents and the achievement of certain other milestones.
Viropro also said it has begun the process of renaming itself Axxiom, effective immediately.