Entasis Therapeutics Completes Initial Closing of $35M Private Placement with Innoviva
April 22 2020 - 4:05PM
Entasis Therapeutics Holdings Inc. (NASDAQ: ETTX) (“Entasis”), a
clinical-stage biopharmaceutical company focused on the discovery
and development of novel antibacterial products, today announced
that it has completed the initial $3.3 million closing of a $35
million common stock and warrant securities investment with
Innoviva Inc. (NASDAQ: INVA) ("Innoviva"), signed on April 12,
2020. Upon satisfaction of certain closing conditions,
Innoviva will purchase the balance of the $35 million in Entasis
common stock and warrant securities in a second closing anticipated
later in the second quarter of 2020 (excluding any consideration
payable upon exercise of warrants).
Entasis plans to use the proceeds from the
offering to support the continued development of its novel pipeline
of pathogen-targeted antibacterial product candidates, which
includes sulbactam-durlobactam (SUL-DUR) for carbapenem-resistant
Acinetobacter baumannii infections, and zoliflodacin for
uncomplicated gonorrhea, including infections caused by
drug-resistant strains of Neisseria gonorrhoeae. Both of
these product candidates are currently being evaluated in Phase 3
clinical trials.
"The threat from pathogens, including the global
rise of multidrug-resistant bacteria, is real,” said Odysseas
Kostas, M.D., Chairman of Innoviva's Board of Directors. “We look
forward to working with the Entasis team to develop innovative
antibacterial therapies.”
“We are excited to form this new relationship
with Innoviva,” stated Manos Perros, President and Chief Executive
Officer of Entasis. “The current pandemic has brought to the fore
the importance of developing effective treatments against emerging
pathogens. In these challenging times, it is critical that we
continue to innovate against drug-resistant bacterial infections,
and this investment will enable the advancement of our novel
pathogen-targeted pipeline and position us to make our lead
products available to patients in need.”
Pursuant to and subject to the terms and
conditions of the securities purchase agreement and related
agreements, Innoviva will purchase 14 million newly issued shares
of Entasis common stock, at a price of $2.50 per share, and
warrants to purchase up to 14 million additional shares of Entasis
common stock, with an exercise price of $2.50 per share. The
stock purchase will occur in two closings. At the initial
closing, Innoviva purchased approximately 1.3 million shares of
common stock and warrants to purchase approximately 1.3 million
shares of common stock for an aggregate purchase price of $3.3
million. At the second closing, subject to an Entasis
stockholder vote in favor of the transaction, Innoviva will
purchase approximately 12.7 million shares of common stock and
warrants to purchase approximately 12.7 million shares of common
stock for an aggregate purchase price of $31.7 million. Upon
completion of the first closing, Innoviva has the right to appoint
one director to the Entasis Board of Directors and upon the second
closing, Innoviva will have the right to appoint an additional
director.
Subject to the satisfaction of certain closing
conditions, including, with respect to the second closing, the
approval of Entasis’ stockholders, the transactions contemplated by
the securities purchase agreement are expected to close during the
second quarter of 2020. The transaction was approved by the
Boards of Directors of both companies and the shareholders of
Entasis will receive a proxy statement seeking their approval of
the second closing in the coming weeks.
About EntasisEntasis is a
clinical-stage biopharmaceutical company focused on the discovery,
development and commercialization of novel antibacterial products
to treat serious infections caused by multidrug-resistant
Gram-negative bacteria. Entasis’ pathogen-targeted design platform
has produced a pipeline of product candidates, including
sulbactam-durlobactam (targeting Acinetobacter baumannii
infections), zoliflodacin (targeting Neisseria gonorrhoeae
infections), ETX0282CPDP (targeting Enterobacteriaceae infections)
and ETX0462 (targeting Pseudomonas infections). For more
information, visit www.entasistx.com.
Entasis Forward-looking
StatementsThis press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as “may,” “will,” “expect,” “plan,”
“anticipate,” “estimate,” “intend” and similar expressions (as well
as other words or expressions referencing future events, conditions
or circumstances) are intended to identify forward-looking
statements. These forward-looking statements are based on Entasis’
expectations and assumptions as of the date of this press release.
Each of these forward-looking statements involves risks and
uncertainties. Actual results may differ materially from these
forward-looking statements. Many factors may cause differences
between current expectations and actual results, including whether
the conditions for the closing of the second tranche of the
transaction with Innoviva will be satisfied; unexpected safety or
efficacy data observed during non-clinical or clinical studies,
clinical site activation rates or clinical trial enrollment rates
that are lower than expected and changes in expected or existing
competition, changes in the regulatory environment, failure of
Entasis’ collaborators to support or advance collaborations or
product candidates and unexpected litigation or other disputes.
Many of these factors are beyond Entasis’ control. These and other
risks and uncertainties are described more fully in the Entasis’
filings with the Securities and Exchange Commission, including the
section titled “Risk Factors” contained therein. Forward-looking
statements contained in this announcement are made as of this date
Entasis assumes no obligation to update any forward-looking
statements contained herein to reflect any change in expectations,
even as new information becomes available, except as required by
law.
Additional Information and Where to Find
ItThis press release does not constitute an offer to sell,
or a solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering would be unlawful. This press release may be
deemed solicitation material in respect of the proposed
transactions between the Company and Innoviva. The Company intends
to file with the SEC and mail to its stockholders a definitive
proxy statement in connection with the proposed transactions. THE
COMPANY'S STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR
ENTIRETY THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT
ARE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED
TRANSACTIONS. Investors and stockholders may obtain a free copy of
the proxy statement and other documents filed with the SEC (when
they became available) from the SEC's website at
www.sec.gov or by accessing the Company's website at
www.entasistx.com.
Certain Information Concerning
ParticipantsThe Company, its directors, executive officers
and certain other members of management and employees of the
Company may be deemed to be participants in the solicitation of
proxies from the Company's stockholders with respect to the
proposed transactions. Information about such persons who may,
under the rules of the SEC, be considered participants in the
solicitation of the stockholders of the Company in connection with
the proposed transactions, and any interest they have in the
proposed transactions, will be set forth in the Company's
definitive proxy statement when it is filed with the SEC. You can
find additional information about the Company's directors and
executive officers in the Company's definitive proxy statement for
its 2019 Annual Meeting of Stockholders, which was filed with the
SEC on April 30, 2019, and its Annual Report on Form 10-K for
the year ended December 31, 2019, which was filed with the SEC on
March 11, 2020. These documents can be obtained free of charge from
the sources indicated above.
Company Contact Kyle Dow
Entasis Therapeutics (781) 810-0114 kyle.dow@entasistx.com
Investor Relations ContactsTram
Bui / James SaliernoThe Ruth
Group(646) 536-7035 /
7028tbui@theruthgroup.comjsalierno@theruthgroup.com
Media ContactKirsten ThomasThe Ruth Group(508)
280-6592kthomas@theruthgroup.com
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