Two biotechs plan to merge early next year, and as negotiations are ongoing, investors have yet to sign the deal.
Oncology-focused Advaxis is in the early stages of its merger with Ayala, a Delaware-incorporated biotechnology company with major operations located in Israel.
Advaxis CEO Ken Berlin told investors and analysts on a conference call Wednesday morning that he had been reviewing “a number of business development opportunities to determine how best to move Advaxis toward a company at a later stage,” adding that the biotech believes the merger with Ayala is the best way to go about it.
Berlin tells Terminal News that the plan is to settle everything within 90 to 120 days, which is the end of January – and the merger still depends on whether or not Ayala shareholders sign the agreement.
How will it work with two companies on the Nasdaq, under tickers $ADXS and $AYLAis that Ayala, a biotech penny stock and down 24% Wednesday morning, would delist. Although it will be listed on the OTCQX once the merger is effective, the ultimate goal is for the combined company to be listed on Nasdaq. However, the companies noted that a move to the Nasdaq is not guaranteed.
Shares of Advaxis, a dime territory biotech with shares over $2 apiece, jumped 16% on Wednesday morning before easing back to an 8% increase.
Ayala shareholders will get a total of 62.5% of the new company, while Advaxis shareholders will get the remaining 37.5%. Berlin says these things are all negotiated.
“So they think they bring a great asset – and they are – and they should capitalize on it,” Berlin noted, adding that part of the negotiation included asking what it would have taken Ayala to have already raised the $20 million from Advaxis. had on hand.
What the combined company will be looking for, once all is said and done, is AL102, a lead program that Ayala offers to treat desmoid tumors. It’s also the same type of tumor that SpringWorks is targeting, recently raising $225 million through a private placement and presenting information at ESMO earlier this year.
Ayala CEO Roni Mamluk added on the conference call that Ayala’s drug is currently in a Phase II/III registrational trial called RINGSIDE. And that once the proposed merger is complete, Ayala will retain its operations in Israel.
As for how the merger happened, Berlin remained mum, telling Endpoints it would come up in the proxy statement and “it will take time to draft.”
Another drug that will be considered as an option for the proposed new entity, Berlin told Endpoints, is ADXS-504, an Advaxis vaccine for prostate cancer, which is currently being studied in a phase trial. I sponsored by a researcher, or IST, at Columbia. University. Berlin added that the investigator, Mark Stein, had worked with Advaxis programs before, when the biotech previously partnered with Merck.
Berlin added meanwhile that in order to focus primarily on AL102, Advaxis is terminating ADXS-503, a candidate that was under consideration for the NSCLC. Other candidates are options, Berlin says, but AL102 is the main focus.
Advaxis has had its own issues over the years. After reaching a $540 million deal with Amgen in 2016, the FDA put a Phase I/II clinical trial on hold after a patient died in 2018. Amgen then backed out of the deal later that year- the.
A merger proposal was initially voted on and passed by shareholders with Israeli biotech Biosight, but Advaxis said a second vote for the reverse fraction was not passed by shareholders.