AcelRx Pharmaceuticals, a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in medically supervised settings, announced the execution of a definitive merger agreement to acquire Lowell Therapeutics, Inc. (Lowell), a privately held company.
Lowell, Niyad and LTX-608 Overview
Lowell is a privately held company developing Niyad, a regional anticoagulant for the dialysis circuit during continuous renal replacement therapy for acute kidney injury patients in the hospital. Niyad is being studied under an investigational device exemption, or IDE, and has received Breakthrough Device Designation status from the FDA. While not approved for commercial use in the U.S., the active drug component of Niyad, nafamostat, has been approved in Japan and South Korea as a regional anticoagulant for the dialysis circuit, disseminated intravascular coagulation, and acute pancreatitis. Niyad is a lyophilized formulation of nafamostat, a broad-spectrum, synthetic serine protease inhibitor, with anticoagulant, anti-inflammatory, and potential anti-viral activities. The second intended indication for Niyad is as a regional anticoagulant for the dialysis circuit for chronic kidney disease patients undergoing intermittent hemodialysis in dialysis centers. LTX-608 is Lowell's proprietary nafamostat formulation for direct IV infusion being developed for the treatment of acute respiratory distress syndrome (ARDS) and disseminated intravascular coagulation (DIC).
The Transaction
The agreement to acquire Lowell in a transaction valued at approximately $32.5 million plus net cash acquired and certain other adjustments, includes approximately $26.0 million of contingent consideration payable in cash or stock at AcelRx's option, upon the achievement of regulatory and sales-based milestones. The merger consideration payable upon the closing is payable in shares of AcelRx common stock, or at the option of certain Lowell stockholders, in cash acquired from Lowell of up to $3.5 million to such stockholders. An amount of shares of AcelRx common stock valued at approximately $6.5 million is expected to be issued to Lowell securityholders at the closing. If those certain stockholders do not elect to receive cash, the amount of shares of common stock issued by AcelRx will be greater. The transaction was unanimously approved by the AcelRx and Lowell Boards of Directors and is expected to close in the fourth quarter of 2021, subject to certain closing conditions, including Lowell stockholder approval. Certain of Lowell's stockholders, representing a majority of the outstanding shares of capital stock of Lowell, have signed agreements to vote in favor of the transaction, subject to certain conditions.
"We continue to execute on our strategy to consolidate commercial-ready and late-stage development assets in medically supervised settings. To that end, we recently in-licensed two innovative pre-filled syringe products for FDA submission in 2022. The acquisition of Lowell will provide us with a late-stage asset that has received Breakthrough Device Designation status from the FDA and has the potential to fulfill an unmet need for regional anticoagulation of the dialysis circuit, an indication for which there are currently no FDA-approved products," said Vince Angotti, Chief Executive Officer of AcelRx. "This acquisition will further diversify AcelRx's portfolio as this broad-spectrum, synthetic serine protease inhibitor may have a number of other potential indications suited to medically supervised settings. This pipeline expansion momentum comes at a time when DSUVIA is gaining solid traction for use in the plastic surgery and cosmetic procedure specialties, with these specialties driving strong growth as evidenced by October being our highest commercial order month since launch. We expect these two specialties to be the foundation for further DSUVIA growth," continued Angotti.
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