[Updated 6/6/17, 8:04 am] Houston—Opexa Therapeutics is the target of a reverse merger with Acer Therapeutics, a privately held pharmaceutical company based in the Boston area.
In a filing with the US Securities and Exchange Commission Monday, the companies announced the arrangement and also said that Cambridge, MA-based Acer would receive $15.7 million in a financing round led by TVM Capital Life Sciences, a Germany-based venture firm. TVM and other investors in Acer will hold about 89 percent of the combined company’s stock, while current Opexa investors will hold the remaining shares.
Shares in Opexa (NASDAQ: [[ticker:OPXA]]), which is based in the northern Houston suburb of The Woodlands, TX, rose more than 13 percent on Monday, the day the reverse merger was announced.
Opexa had been seeking to develop immunotherapies to treat major illnesses such as multiple sclerosis and autoimmune diseases such as neuromyelitis optica using proprietary T-cell technologies. Cellular immunotherapy is an increasingly crowded field; a number of companies are working to develop ways to reprogram and grow patients’ T-cells, and then give them back to patients to seek out and kill cancerous cells, for example.
The two companies said the proposed merger has been unanimously approved by both of their boards of directors. The proposed merger is expected to close during the third quarter of 2017, pending shareholder approval for both Acer and Opexa. Upon approval, Opexa’s name will be changed to Acer Therapeutics Inc., and the new company would change its Nasdaq stock exchange ticker symbol to “ACER.”
[Updated with comment from CEO Neil Warma and background on Opexa.] For Neil Warma, Opexa’s CEO, the agreement is a positive outcome following the failure of Phase IIb clinical trials last fall for its drug candidate, Abili-T, for patients with multiple sclerosis. About 40 percent of the company’s employees were let go at the time.
“Following the results of the trial, we have been looking for strategic opportunities for a number of months,” Warma says. “I’m pleased we were able to reach this positive outcome in the face of challenging data that we see in biotech all the time.”
In February, Opexa transferred its lease for a global contract and manufacturing company to KBI Biopharma, which also bought manufacturing and laboratory equipment.
The Opexa-Acer agreement would mark the second time a Texas biotech has been the target of a reverse merger. In May, Synologic, also based in Cambridge, MA, merged with the shell of Mirna Therapeutics, a failed developer of cancer drugs based in Austin, TX, that did not make it past Phase I clinical trials. As Xconomy national biotech editor Alex Lash wrote at the time, reverse mergers are often pursued by companies that are not drumming up enough interest in a conventional IPO under the terms they want.
Acer CEO Chris Schelling said in the filing that the company would use the resources to further develop its drug candidate, Edsivo, a potential therapy for Vascular Ehlers-Danlos Syndrome, or vEDS, a connective tissue disorder that can cause the walls of blood vessels, intestines, or other organs to rupture.
