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Biodexa Pharmaceuticals Enters into Non-binding Letter of Intent for Proposed Acquisition of Varian Biopharmaceuticals
17 May 2023
Phase 1AcquisitionDrug Approval
Biodexa Pharmaceuticals PLC (NASDAQ: BDRX) (“Biodexa” or the “Company”), a clinical stage biopharmaceutical company developing a pipeline of products aimed at primary and metastatic cancers of the brain is pleased to announce that it has signed non-binding letter of intent to potentially acquire Varian Biopharmaceuticals, Inc. (“VarianBio”), a private US precision oncology company developing novel therapeutics for the treatment of cancer.
Background to the proposed acquisition
In recent communications, the Company has referenced a shift in strategy from a drug delivery company to a therapeutics company. Currently, the Company’s only clinical asset is MTX110 which is being developed for three intractable rare and orphan brain cancers. The Company’s intention is to add to, and diversify, its development pipeline with a continued focus on rare and orphan products and/or oncology therapeutics and VarianBio represents the first of such opportunity.
Information on VarianBio
VarianBio is developing a high-potency, specific atypical protein kinase C iota (“aPKCi”) inhibitoratypical protein kinase C iota (“aPKCi”) inhibitor with best-in-class potential as a treatment for various oncology indications with an initial focus on basal cell carcinoma (BCC) and molecularly targeted solid tumors.
VarianBio’s rationally designed aPKCi small molecule inhibitor candidate that has been optimized for potency, selectivity and tolerability. aPKCi has been implicated as an oncogene in a number of human cancers, including BCC, cutaneous T-cell lymphoma (CTCL), non-small cell lung cancer (NSCLC), acute myeloid leukemia (AML), colorectal cancer, and pancreatic cancer, among others. aPKCi has also been demonstrated to have a role in allowing the immune system to recognize tumors, recruit immune cells into the area, and ramp up the anti-tumor response to kill cancer cells in the lab by shrinking their tumors.
The active pharmaceutical ingredient in VAR-101/102, a novel aPKCi inhibitor, has demonstrated dose dependent anti-tumor activity in murine and human BCC cell lines, as well as other cancer models. VAR-101 will be developed in a topical formulation for BCC which has the potential to offer optimal clinical utility as a surgical neoadjuvant or adjuvant therapy. Following completion of IND-enabling skin toxicology studies, VAR-101 is targeting to start a Phase I proof-of-concept study in the first quarter of 2024. VAR-102, an oral formulation of the active aPKCi inhibitor, lends itself to broader applications in multiple tumor types.
The Company believes that VAR-101 and VAR-102, if approved, could represent significant medical and commercial opportunities.
Terms of the proposed acquisition
Under the non-binding letter of intent, VarianBio will merge into an acquisition subsidiary of the Company and it is proposed that VarianBio equity and debt holders (together,“VarianBio Securityholders”) will receive 10MM of the Company’s American Depositary Shares (“ADSs”), at close as initial consideration. On a pro forma basis, prior to the planned financing discussed below, VarianBio Securityholders will own approximately 34% of the post-acquisition Company. VarianBio Securityholders will receive up to a further 6MM ADSs, issuable in two phases: 3MM upon the commencement of the first pivotal registration study of a VarianBio product and an additional 3MM upon the first FDA approval of a VarianBio product.
In addition, pursuant to the non-binding heads of terms, the Company plans to raise not less than US$7.0MM, net of expenses, which will be used to fund VAR-101 through its Phase I proof-of-concept study that VAR-101 is targeting to commence in the first quarter of 2024.
The acquisition agreement is also expected to contain other customary conditions, including shareholder approval, and appropriate representations and warranties by the parties.
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