Acasti Pharma Inc (NASDAQ:ACST) (CVE:ACST) has announced a definitive agreement to acquire Grace Therapeutics Inc, a privately-held biopharmaceutical company developing drug delivery technologies for the treatment of rare and orphan diseases.
The deal would have Acasti acquire Grace’s entire therapeutic pipeline consisting of three unique clinical stage and multiple preclinical stage assets, supported by an intellectual property portfolio of more than 40 granted and pending patents globally. Both companies' boards have approved the deal thus far, as have Grace stockholders.
Grace’s three lead programs have all received Orphan Drug Designation from the US Food & Drug Administration (FDA), which could provide up to seven years of marketing exclusivity in the country following regulatory approval of a New Drug Application (NDA). The product candidates apply proprietary formulation and drug delivery technologies to existing pharmaceutical compounds to improve the current standard of care or provide treatment for diseases with no currently approved therapy.
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Grace’s three lead assets are:
- GTX-104, a subarachnoid hemorrhage (SAH) intravenous infusion treatment designed to improve the management of hypotension and vasospasm in patients with the life-threatening stroke condition. Results from a pharmacokinetic bridging study are expected in 1Q 2022, with a Phase 3 study expected to begin in 3Q 2022.
- GTX-102, an oral mucosal spray to treat ataxia-telangiectasia, a neurodegenerative disorder for which there is no FDA approved medication. Pharmacokinetic study results are expected in the second half of 2022, with a Phase 3 study expected to follow in the first half of 2023.
- GTX-101, a film-forming topical spray for patients with postherpetic neuralgia, a mild to extremely severe neuropathic pain caused by nerve damage from the shingles virus. Phase 1 results are expected in the second half of 2022 with a Phase 2 study expected to kick off in that same span.
The companies expect that the cash at closing of roughly $64 million will be used to pursue the clinical development of the first two assets through Phase 3, and further advance earlier pipeline assets into the clinic.
“We have diligently pursued a thorough strategic process to evaluate a range of value-creating alternatives,” Acasti Chairman Roddy Carter said in a statement. “We believe that combining Grace’s innovative research programs and scientific talent with Acasti’s financial resources and drug development and commercialization expertise position us to build a portfolio of innovative therapeutics that will address unmet medical needs.”
Once the deal is done, Acasti CEO Jan D’Alvise will take on the same role, in addition to president, at the combined company. All Grace employees will be transferred to Acasti, the company said.
“We believe that Grace’s assets represent a transformative opportunity for Acasti, as their novel drug delivery technologies used to develop new therapies could improve upon existing compounds with known safety profiles and provide an attractive path to drug development and commercialization,” D’Alvise said. “We believe Grace’s product portfolio has the potential to provide better patient solutions with enhanced efficacy, faster onset of action, reduced side effects, convenient delivery and increased patient compliance.”
The plan is for Grace to merge with a new wholly-owned subsidiary of Acasti. Acasti securityholders would own roughly 55% of the combined company’s common shares, and Grace securityholders would own the remaining 45%. The company estimates that roughly 170.5 million shares would be issued to Grace shareholders.
“Merging with Acasti is a significant opportunity for Grace, as it allows us to partner with an experienced team, well-versed in drug development and commercialization, with a strong commitment to the highest standards of corporate governance,” Grace co-founder and Chairman Vimal Kavuru said. “As a result of the merger, we anticipate the combined company will have the financial resources to fund our lead programs to critical value inflection points.”
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