Sorrento Therapeutics, Inc. (Nasdaq: SRNE, "Sorrento") today
announced the signing of a merger agreement pursuant to which
Sorrento will acquire ACEA Therapeutics, Inc. (“ACEA”). The
acquisition will include late clinical stage drug Abivertinib,
clinical stage candidate AC0058, preclinical stage candidate
AC0939, and ACEA’s extensive proprietary library of small molecules
(over 1,000,000 compounds), which potentially have applications for
numerous human disease indications, including non-small cell lung
cancer (NSCLC), B cell lymphomas, systemic lupus, rheumatoid
arthritis, multiple sclerosis and viral infections. These compounds
are being actively studied in clinical trials and/or preclinical
models to advance the most promising candidates rapidly to clinical
stage development. Abivertinib, a novel small molecule tyrosine
kinase inhibitor (TKI) that selectively targets both a mutant form
of the epidermal growth factor receptor (EGFR) and Bruton’s
tyrosine kinase (BTK), was originally identified from ACEA’s
compound library. Abivertinib has the potential to improve outcomes
in resistant prostate cancer, systemic lupus erythematosus, and
various B cell lymphomas in addition to NSCLC, an indication for
which a registrational/Phase 3 trial has been completed. It is
currently being studied as a Phase 2 treatment for COVID-19-induced
respiratory compromise in the US and Brazil. A second clinical
candidate, AC0058, is a next generation BTK inhibitor, currently in
a Phase 1b trial for Lupus patients in the US, which can
potentially be expanded to other autoimmune diseases such as
multiple sclerosis.
The acquisition will also include ACEA’s state
of the art cGMP facility located in Quzhou, China, on a 23-acre
campus with five buildings. This facility has successfully
manufactured multiple batches of the active pharmaceutical
ingredient (API) and final product in capsules for Abivertinib and
AC0058 for clinical studies. The ACEA facility currently has
capacity to manufacture up to 5,000 kg/year of APIs and 50,000,000
capsules of final drug product.
The ACEA next generation BTKi and other TKI
small molecule drug candidates are highly synergistic with
Sorrento’s broad biological product pipelines in therapeutic
antibodies, antibody drug conjugates (ADCs), autologous chimeric
antigen receptor-T (CAR-T) and allogeneic dimeric antigen
receptor-T (DAR-T) cell therapies, oncolytic viruses and IL-2
immune modulators. The synergy will potentially enable Sorrento to
develop many life-saving, combinational drugs for
difficult-to-treat human illness in oncology, autoimmune and
infectious diseases.
Dr. Henry Ji, Chairman and CEO of Sorrento
Therapeutics, stated, “The ACEA acquisition will bring us a step
closer to developing into a major biopharmaceutical company and we
look forward to welcoming the ACEA team into the Sorrento
family.”
As previously announced on October 16, 2020,
Sorrento and ACEA entered into a letter of intent setting forth the
terms and conditions by which Sorrento would acquire ACEA. In
consideration for the acquisition, at the closing of the merger,
ACEA’s equity holders will receive up to an aggregate of $38
million in shares of Sorrento common stock, subject to certain
adjustments, based on a price per share calculated in accordance
with the merger agreement. In addition to the foregoing
consideration, and subject to the achievement of certain clinical
and sales milestones (as described below), Sorrento will also pay
the ACEA equity holders (i) up to $450,000,000 in additional
payments, subject to the receipt of certain regulatory approvals
and achievement of certain net sales targets with respect to the
assets acquired in the merger and (ii) with respect to specified
royalty-bearing products, five to ten percent of the annual net
sales thereof, in each case in accordance with the terms of an
earn-out agreement. The amount referenced in clause (i) of the
preceding sentence includes the amounts that would have otherwise
been due to ACEA under that certain License Agreement, dated July
13, 2020, which agreement will terminate in its entirety at the
effective time of the merger.
The merger is expected to close in the second
quarter of 2021, subject to customary closing conditions and
regulatory approval. If the proposed merger is consummated, the
issuance of the shares of Sorrento common stock would be made in
accordance with an exemption from the registration requirements of
the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to Section 4(a)(2) thereof and Regulation D and Regulation
S thereunder. Such shares of Sorrento common stock would not be
registered under the Securities Act and could not be offered or
sold without registration unless an exemption from such
registration is available. This press release does not constitute
an offer to sell or the solicitation of an offer to buy, any shares
of Sorrento common stock.
About Sorrento Therapeutics, Inc.
Sorrento is a clinical stage, antibody-centric,
biopharmaceutical company developing new therapies to treat cancers
and COVID-19. Sorrento's multimodal, multipronged approach to
fighting cancer is made possible by its extensive immuno-oncology
platforms, including key assets such as fully human antibodies
(“G-MAB™ library”), clinical stage immuno-cellular therapies
(“CAR-T”, “DAR-T™”), antibody-drug conjugates (“ADCs”), and
clinical stage oncolytic virus (“Seprehvir™”). Sorrento is also
developing potential antiviral therapies and vaccines against
coronaviruses, including COVIGUARD™, COVI-AMG™, COVISHIELD™,
Gene-MAb™, COVI-MSC™ and COVIDROPS™; and diagnostic test solutions,
including COVITRACK™, COVISTIX™ and COVITRACE™.
Sorrento's commitment to life-enhancing
therapies for patients is also demonstrated by our effort to
advance a first-in-class (TRPV1 agonist) non-opioid pain management
small molecule, resiniferatoxin (“RTX”), and SP-102 (10 mg,
dexamethasone sodium phosphate viscous gel) (SEMDEXA™), a novel,
viscous gel formulation of a widely used corticosteroid for
epidural injections to treat lumbosacral radicular pain, or
sciatica, and to commercialize ZTlido® (lidocaine topical system)
1.8% for the treatment of post-herpetic neuralgia. RTX has
completed a Phase IB trial for intractable pain associated with
cancer and a Phase 1B trial in osteoarthritis patients. SEMDEXA is
in a pivotal Phase 3 trial for the treatment of lumbosacral
radicular pain, or sciatica. ZTlido® was approved by the FDA on
February 28, 2018.
For more information visit
www.sorrentotherapeutics.com.
About ACEA Therapeutics Inc.
ACEA Therapeutics is committed to developing and
delivering innovative treatments to improve the lives of patients
with life-threatening diseases. ACEA has expanded drug discovery
efforts to encompass development in both targeted and immunotherapy
areas. Alongside a robust R&D organization, ACEA has
established drug manufacturing and commercial capabilities in China
to support its long-term growth. This infrastructure provides ACEA
greater control over drug supply chain to make sure products are
delivered to patients on-time and at the highest quality. ACEA is
well positioned to deliver on its promise to bring innovative
treatments to patients living with life-threatening diseases while
creating value for shareholders, employees, and society.
For more information visit
www.aceatherapeutics.com
Forward-Looking Statements
This press release and any statements made for
and during any presentation or meeting contain forward-looking
statements related to Sorrento Therapeutics, Inc., under the safe
harbor provisions of Section 21E of the Private Securities
Litigation Reform Act of 1995 and subject to risks and
uncertainties that could cause actual results to differ materially
from those projected. Forward-looking statements include statements
regarding the timing and anticipated completion of the proposed
merger; the potential effects that the acquisition of ACEA may have
on Sorrento’s business and product candidate pipeline; the expected
timing of the closing of the transaction. Risks and uncertainties
that could cause our actual results to differ materially and
adversely from those expressed in our forward-looking statements,
include, but are not limited to: potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the proposed merger; unexpected costs, charges or
expenses resulting from the proposed merger; risks relating to the
consummation of the contemplated merger, including the risk that
the closing conditions will not be satisfied; risks related to
Sorrento's technologies and prospects, including, but not limited
to: risks related to seeking regulatory approvals; clinical
development risks, including risks in the progress, timing, cost,
and results of clinical trials and product development programs;
risk of difficulties or delays in obtaining regulatory approvals;
risks that clinical study results may not meet any or all endpoints
of a clinical study and that any data generated from such studies
may not support a regulatory submission or approval; risks that
prior test, study and trial results may not be replicated in future
studies and trials; risks of manufacturing and supplying drug
product; risks related to leveraging the expertise of its
employees, subsidiaries, affiliates and partners to assist Sorrento
in the execution of its therapeutic antibody product candidate
strategies; risks related to the global impact of COVID-19; and
other risks that are described in Sorrento's most recent periodic
reports filed with the Securities and Exchange Commission,
including Sorrento's Annual Report on Form 10-K for the year ended
December 31, 2020, and subsequent Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission, including the
risk factors set forth in those filings. Investors are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this release and we undertake no
obligation to update any forward-looking statement in this press
release except as required by law.
Media and Investor Relations
ContactAlexis Nahama, DVM (SVP Corporate
Development)Email: mediarelations@sorrentotherapeutics.com
Sorrento® and the Sorrento logo are registered
trademarks of Sorrento Therapeutics, Inc.
G-MAB™, DAR-T™, SOFUSA™, COVIGUARD™, COVI-AMG™,
COVISHIELD™, Gene-MAb™, COVIDROPS™, COVI-MSC™, COVITRACK™,
COVITRACE™ and COVISTIX™ are trademarks of Sorrento Therapeutics,
Inc.
SEMDEXA™ is a trademark of Semnur
Pharmaceuticals, Inc.
ZTlido® is a registered trademark owned by
Scilex Pharmaceuticals Inc.
All other trademarks are the property of their
respective owners.
©2021 Sorrento Therapeutics, Inc. All Rights
Reserved.
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