eFFECTOR Therapeutics, Inc. (eFFECTOR), a biopharmaceutical company
focused on pioneering the development of selective translation
regulation inhibitors (STRIs) for the treatment of cancer, and
Locust Walk Acquisition Corp. (NASDAQ: LWAC), a
blank-check company formed for the purpose of acquiring or merging
with one or more businesses, today announced they have entered into
a definitive merger agreement. Upon closing of the transaction,
anticipated to occur in the third quarter of 2021, the combined
company will be named eFFECTOR Therapeutics, Inc. and will be led
by Steve Worland, Ph.D., president and CEO. The combined company’s
common stock is expected to be listed on the Nasdaq Capital Market
under the ticker symbol “EFTR”.
“This milestone is the beginning of a significant new chapter in
eFFECTOR’s history, as we build on our strong scientific foundation
as leaders in the development of selective translation regulator
inhibitors as a new class of therapies for cancer,” said Dr.
Worland. “We’re entering into this transaction to accelerate
eFFECTOR’s growth with the goal of delivering a new class of
medicines to help drive improved health outcomes for people with
cancer. We are excited to be selected by the management and board
of LWAC, whose members have vast experience as investors and
operating executives in the biotechnology industry.”
“After evaluating more than 90 biotech companies, eFFECTOR
emerged as the best choice for our business combination,” stated
Chris Ehrlich, CEO and director of LWAC. “eFFECTOR is at the
cutting-edge of targeting translation regulation, which has the
potential to simultaneously address multiple drivers of cancer. We
are confident that the highly experienced management team with a
track record of pipeline advancement and business accomplishments
are prepared to lead eFFECTOR as a publicly listed company. This
transaction positions eFFECTOR to reach important value inflection
points for our impressive list of stakeholders.”
The transaction includes up to $175 million in trust at LWAC
(less any redemptions by existing LWAC stockholders) and a
concurrent, fully committed $60 million PIPE financing of common
stock issued at $10.00 per share from new and existing leading
healthcare investors including founding Series A investors
Abingworth, SR One, The Column Group and U.S. Venture Partners, as
well as Altitude Life Science Ventures, Sectoral Asset Management,
Pfizer Ventures, Alexandria Venture Investments, BioMed Ventures
and Osage University Partners.
Proceeds from the transaction are expected to provide eFFECTOR
with the capital to further develop its pipeline, advancing it
through multiple clinical milestones, including the following:
- Report topline data from the randomized Phase 2b KICKSTART
clinical trial of eFFECTOR’s lead product candidate, tomivorsertib,
an oral small-molecule inhibitor of mitogen-activated protein
kinases 1 and 2 (MNK) 1/2, in combination with pembrolizumab in
metastatic non-small cell lung cancer (NSCLC), both in the
frontline extension and frontline settings; this study is open for
enrollment.
- Initiate multiple Phase 2a expansion cohorts for zotatifin, a
small-molecule inhibitor of eIF4A, in patients with breast cancer
and NSCLC in the second half of 2021.
- Support expansion of both tomivosertib and zotatifin into
additional indications.
Key Transaction Terms Upon the closing of the
business combination, and assuming no redemptions of shares of LWAC
by its public stockholders, eFFECTOR would be expected to have cash
resources of approximately $210 million (less any redemptions), and
a total enterprise valuation of $419 million.
The boards of directors of both eFFECTOR and LWAC have
unanimously approved the proposed transaction, which is expected to
be completed in the third quarter of 2021. The closing of the
transaction is subject to approval of LWAC shareholders and the
satisfaction or waiver of certain other customary closing
conditions.
Additional information about the transaction will be provided in
a Current Report on Form 8-K to be filed by LWAC with the
Securities and Exchange Commission (SEC) and will be available on
the SEC’s website at www.sec.gov. In addition, LWAC intends to
file a registration statement on Form S-4 with the SEC, which will
include a proxy statement/prospectus, and will file other documents
regarding the proposed transaction with the SEC.
AdvisorsCredit Suisse and Stifel are acting as
lead PIPE placement agents, and Credit Suisse is also acting as
capital markets advisor to eFFECTOR. Locust Walk Securities is also
acting as PIPE placement agent. Latham & Watkins LLP is acting
as legal counsel to eFFECTOR. Cantor Fitzgerald is acting as the
lead capital markets advisor to LWAC. JMP Securities and Mizuho
Securities are also acting as capital markets advisors to LWAC.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is serving as
legal counsel to LWAC.
Investor WebcastThe management teams
of eFFECTOR and LWAC will host a webcast today, Thursday, May
27 at 9:00 a.m. ET to provide a brief overview of eFFECTOR and the
proposed transaction. The webcast can be accessed here:
http://public.viavid.com/index.php?id=145087
In addition, the link will be available on eFFECTOR’s website at
www.effector.com and LWAC’s website at
www.locustwalkacquisitioncorp.com.
About eFFECTOReFFECTOR is a clinical stage
biopharmaceutical company focused on pioneering the development of
a new class of oncology drugs referred to as selective translation
regulator inhibitors (STRIs). eFFECTOR’s STRI product candidates
target the eIF4F complex and its activating kinase,
mitogen-activated protein kinase 1/2 (MNK 1/2). The eIF4F complex
is a central node where two of the most frequently mutated
signaling pathways in cancer, the PI3K-AKT and RAS-MEK pathways,
converge to activate the translation of select messenger RNA into
proteins that are frequent culprits in key disease driving
processes. Each of eFFECTOR’s product candidates is designed to act
on a single protein that drives the expression of multiple
functionally related proteins, including oncoproteins and
immunosuppressive proteins in T cells, that together control tumor
growth, survival and immune evasion. eFFECTOR’s lead product
candidate, tomivosertib, is a MNK 1/2 inhibitor. KICKSTART, a
randomized, double-blind, placebo controlled Phase 2b trial of
tomivorsertib in NSCLC in combination with pembrolizumab is
currently open for enrollment. Zotatifin, eFFECTOR’s inhibitor of
eIF4A, is currently in the dose-escalation portion of a Phase 1/2
trial, with Phase 2a expansion cohorts expected to initiate in the
second half of 2021. eFFECTOR has a global collaboration with
Pfizer to develop inhibitors of a third target, eIF4E. eFFECTOR
plans to evaluate zotatifin as a potential host-directed anti-viral
therapy in patients with mild to moderate COVID in collaboration
with University of California, San Francisco, under a $5 million
grant sponsored by the Defense Advanced Research Projects
Agency.
About Locust Walk Acquisition Corp.Locust
Walk Acquisition Corp. (NASDAQ: LWAC) is a blank-check
company formed for the purpose of entering a merger, share
exchange, asset acquisition, stock purchase, recapitalization,
reorganization, or other similar business combination with one or
more businesses or entities.
Forward-Looking StatementsThis press release
contains certain forward-looking statements within the meaning of
the federal securities laws with respect to the proposed
transaction between Locust Walk Acquisition Corp. and eFFECTOR
Therapeutics, Inc. All statements other than statements of
historical facts contained in this press release, including
statements regarding LWAC or eFFECTOR’s future results of
operations and financial position, the amount of cash expected to
be available to eFFECTOR after the closing and giving effect to any
redemptions by LWAC stockholders, eFFECTOR’s business strategy,
prospective products, product approvals, research and development
costs, timing and likelihood of success, plans and objectives of
management for future operations, future results of current and
anticipated products and expected use of proceeds, are
forward-looking statements. These forward-looking statements
generally are identified by the words “believe,” “project,”
“expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”
“will continue,” “will likely result,” and similar expressions.
These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including, but not limited to, the
following risks relating to the proposed transaction: the risk that
the transaction may not be completed in a timely manner or at all,
which may adversely affect the price of LWAC’s securities; the
failure to satisfy the conditions to closing the transaction,
including the approval by the stockholders of LWAC and the receipt
of certain governmental and regulatory approvals; the risk that
some or all of LWAC’s stockholders may redeem their shares at the
closing of the transaction; the effect of the announcement or
pendency of the transaction on the eFFECTOR’s business
relationships and business generally; the outcome of any legal
proceedings that may be instituted related to the transaction; the
ability to realize the anticipated benefits of the transaction;
eFFECTOR may use its capital resources sooner than it expects; and
the risks associated with eFFECTOR’s business set forth in the
Appendix to the investor presentation filed as an exhibit to the
Current Report on Form 8-K filed by LWAC discussed above. Moreover,
eFFECTOR operates in a very competitive and rapidly changing
environment. Because forward-looking statements are inherently
subject to risks and uncertainties, some of which cannot be
predicted or quantified and some of which are beyond LWAC’s and
eFFECTOR’s control, you should not rely on these forward-looking
statements as predictions of future events. The foregoing list of
factors is not exclusive, and you should carefully consider the
foregoing factors and the other risks and uncertainties described
in the “Risk Factors” section of LWAC’s Annual Report on Form 10-K
and other documents filed by LWAC from time to time with the SEC.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and except as required by law. LWAC and eFFECTOR assume
no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise. Neither LWAC nor eFFECTOR gives any
assurance that either LWAC or eFFECTOR or the combined company will
achieve its expectations.
Important Information for Investors and
StockholdersThis press release relates to a proposed
transaction between LWAC and eFFECTOR. This document does not
constitute an offer to sell or exchange, or the solicitation of an
offer to buy or exchange, any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. LWAC intends to
file a registration statement on Form S-4 with the SEC, which will
include a document that serves as a prospectus and proxy statement
of LWAC, referred to as a proxy statement/prospectus. A proxy
statement/prospectus will be sent to all LWAC stockholders. LWAC
also will file other documents regarding the proposed transaction
with the SEC. Before making any voting decision, investors and
security holders of LWAC are urged to read the registration
statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC in connection
with the proposed transaction as they become available because they
will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by LWAC through the website maintained
by the SEC at www.sec.gov. Alternatively, these documents, when
available, can be obtained free of charge from LWAC upon written
request to Locust Walk Acquisition Corp., c/o eFFECTOR, 11120
Roselle Street, Suite A, San Diego, CA 92121, Attn: Secretary, or
by calling (858) 925-8215.
Participants in the SolicitationLWAC and
eFFECTOR and their respective directors and executive officers may
be deemed to be participants in the solicitation of proxies from
LWAC’s stockholders in connection with the proposed transaction. A
list of the names of the directors and executive officers of LWAC
and information regarding their interests in the business
combination will be contained in the proxy statement/prospectus
when available. You may obtain free copies of these documents as
described in the preceding paragraph.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of any securities
in any state or jurisdiction in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such other jurisdiction.
Contacts:Investors:Stephanie
CarringtonWestwicke, an ICR
Company646-277-1282Stephanie.Carrington@westwicke.com
Media:Heidi Chokeir, Ph.D.Canale
Communications619-203-5391heidi.chokeir@canalecomm.com
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