[Updated 8/7/17, 10:25 am. See below.] Houston—Oncolix, which is developing a treatment for ovarian cancer, announced Monday it has completed a reverse merger with Advanced Environmental Petroleum Producers ([[ticker:AEPP]]), making it a public company.
The Houston-based Oncolix currently has ongoing a Phase I clinical trial in ovarian cancer patients for its prospective therapy, G129R (Prolanta). Oncolix says it plans to target other solid tumor indications such as breast, prostate, and other cancers. The FDA has approved an orphan drug designation for the drug, the company said.
A total of 71.8 million shares of AEPP common stock were issued to the former common stock holders of Oncolix and 62.1 million shares of AEPP Series A preferred stock were issued to the former preferred stock holders of Oncolix. Each share of Series A preferred stock issued by AEPP is convertible into one share of AEPP common stock. With the merger and recapitalization, Oncolix is now a wholly-owned subsidiary of AEPP.
Michael Redman, AEPP’s board chairman and Oncolix CEO, told me Monday that the name of the new company has not been announced yet.
In addition, the company announced that it has secured $2 million private placement of debt securities. Newbridge Securities, through LifeTech Capital, acted as lead placement agent for the offering and as financial advisor for the merger. Prior to the merger, Oncolix had raised more than $15 million in venture funding.
The reverse merger is a non-traditional way for companies to go public and has been a route chosen by a number of Texas biotech companies recently. In July, Opexa Therapeutics was the target of a such a transaction with Acer Therapeutics, a privately held pharmaceutical company in the Boston area. In May, Synologic took over Austin, TX-based Mirna Therapeutics, whose drugs did not make it past Phase I trials.
[Updated with additional comment from Redman.] Redman says he began looking into a reverse merger at the start of the year, before decided to acquire AEPP’s shell in April. “The IPO window has been somewhat limited in the last three or four years,” he says. “The new investors wanted to make sure we had liquidity, and they suggested to us to do this. AEPP was a relatively clean shell with little debt.”
Among those new investors, Redman says, is Ernest Mario, the former Glaxo (NYSE: [[ticker:GSK]]) CEO and chairman and CEO of Alza, which merged with Johnson & Johnson (NYSE: [[ticker:JNJ]]) in 2001.
