US company Sevion Therapeutics Inc. (OTCQB: SVON) is buying Israeli drug developer Eloxx Pharmaceuticals Ltd. Under the terms of the agreement, Rehovot-based Eloxx will become a wholly owned subsidiary of Sevion. When the deal is completed, Sevion will change its name to Eloxx Pharmaceuticals Inc. and will apply to have its shares listed for trading on Nasdaq.
Eloxx Pharmaceuticals is a clinical stage company developing therapeutics for genetic diseases caused by non-sense mutations. The company was co-founded by CEO Dr. Silvia Noiman and Israeli life sciences venture capital fund Pontifax and is based on technology developed at the Technion Israel Institute of Technology in Haifa, and research led by Prof. Timor Baasov. The technology is licensed from the Technion through its technology transfer company, Technion Research and Development Foundation Ltd.
Founded in 2013, Eloxx, which has raised $8.5 million to date, was named as one of "Globes" most promising startups in 2016.
Under the terms of the agreement, Eloxx shareholders will receive shares of Sevion’s common stock reflecting 70% of Sevion’s share capital. The companies expect to raise at least $24 million in private equity investment rounds as a condition prior to completion of the deal.
3-4% of newborns manifest a genetic disease or major birth defect, and about 12% of all mutations reported are caused by nonsense mutation. Non-sense mutations introduce premature stop codons in the reading frame of a gene. Eloxx's lead compound, ELX-02, provides unique opportunity to potentially be the first disease-modifying therapy for treatment of these set of devastating diseases, for which there are no effective treatments.
Dr. Noiman said, “The transaction with Sevion positions Eloxx to become a leading rare disease company with sufficient capital to advance its pipeline of first-in-class small molecule therapeutics through significant value-creating events. We plan to initiate multiple clinical studies for ELX-02, our lead development candidate. Importantly, we anticipate achieving substantial clinical milestones over the course of 2017 and 2018 particularly in our lead clinical programs in cystic fibrosis and cystinosis patients carrying non-sense mutations. ELX-02 has shown pharmacological, pharmacodynamic and physiological effects in several animal models of genetic disease cause by non-sense mutations including Cystic Fibrosis (CF) , Cystinosis, Duchene Muscular Dystrophy (DMD), Rett syndrome and mucoplysaccharidose type I (MPS I).”
Dr. Phillip Frost, the former Teva Pharmaceuticals chairman and OPKO chairman and CEO is a director of Sevion. He said, “We are enthusiastic by the breadth of Eloxx’ technology and pipeline, the quality of the management team and the prospects for Eloxx’ products and technology, particularly its lead compound for the treatment of cystic fibrosis and cystinosis patients carrying non-sense mutations. Based upon its unique capabilities to restore full-length functional proteins in genetic diseases, we expect that Eloxx will establish itself over the coming years as an innovative leader in the development of therapeutics to treat a variety of rare and ultra-rare genetic diseases.”
The executive team of Eloxx Pharmaceuticals will manage the combined Sevion-Eloxx entity, which will be based out of Eloxx Pharmaceuticals’ current corporate offices in Waltham, Massachusetts and Rehovot. The combined entity’s leadership team will consist of Dr. Silvia Noiman, who will serve as CEO and Dr. Pedro Huertas as Chief Medical Officer. The respective Boards of Directors of both companies have approved the proposed transaction.
Shareholders of Eloxx Pharmaceuticals, including Pontifax and Mr. Gilad Shabtai, who hold in the aggregate approximately 81% of its voting shares to date have entered into agreements in support of the proposed transaction.
While these agreements assure the approval of the transaction, all Eloxx Pharmaceuticals shareholders will be asked to vote on the transaction at a meeting of shareholders to be held shortly following signing of the agreement for the acquisition. The transaction is expected to close on or before December 31 2017.
Pearl Cohen represented Sevion Therapeutics Inc. in this transaction. Senior Partner Yael Baratz, Chair of the Corporate and Licensing Group, together with Partner Michael Nussbaum, led the deal and handled the Corporate side. Senior Partner Mark Cohen, Chair of the Life Sciences Practice Group was patent counsel for Sevion on its intellectual property diligence matters.
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2017
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