Israeli cancer therapeutics developer Biosight has agreed to merge with US immunotherapy company Advaxis Nasdaq: ADXS), which is traded on Walll Street with a market cap of $68 million. The move is an alternative for BioSight's IPO or SPAC merger.
The merger will give Biosight a valuation of $280 million, with the company's investors receiving 75% of the merged company. Advaxis has $50 million in cash in the company. The merged company will be renamed Biosight Therapeutics and trade on Nasdaq under the BSTX ticker.
Biosight is developing innovative cancer therapeutics for hematological malignancies and disorders.
Arkin Holdings head of pharma division Dr. Pini Orbach said, "The IPO market has cooled slightly, especially for Israeli companies. Only very strong companies belonging to prominent US funds can conduct offerings at the moment. We didn't want to enter a process that could waste a lot of time for the company without any certainty."
He added, "There was the possibility of a SPAC merger but the valuation we were asking was too high for them. We weren't prepared to compromise. It's a very competitive process that could have taken a long time."
"But we wanted to be part of the American market with the capital that there is on the Nasdaq and we found Advaxis, which has $50 million in cash, which will allow the company to reach all its milestones in the near future. The valuation of $280 million is added value for the investors in our mosdt recent financing round, which was conducted at a valuation of $110 million. The dilution is 25%. We probably would not have gone for the offering if the dilution was higher."
In addition to Mori Arkin's Arkin Holdings, other shareholders in Biosight include Israel Biotechnology Fund (IBF), SBI Fund, Phoenix Assurance Company, Migdal Insurance, Primera Fund, Dubi Zahavi and Raya Strauss.
Biosight’s lead asset BST-236 (aspacytarabine), has been investigated in a multi-center Phase II study in the US and Israel as a single-agent, first-line treatment of acute myeloid leukemia (AML), and soon to be expanded to two additional Phase II trials, in Europe and the US, to evaluate BST-236 in relapsed/refractory myelodysplastic syndrome (MDS) and AML.
Orbach says the drug works with 40% of patients in the Phase II trial showing complete remission from AML with few side-effects. Many of the patients were seriously ill.
LifeSci Capital LLC acted as exclusive financial advisor to Advaxis. Morgan, Lewis & Bockius LLP and Herzog Fox & Neeman are serving as legal counsel to Advaxis. White & Case and Horn & Co. are serving as legal counsel to Biosight.
Published by Globes, Israel business news - en.globes.co.il - on July 6, 2021
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