Advaxis, Inc,, a clinical-stage biotechnology company developing cancer immunotherapies, has entered into a licensing agreement with Knight Therapeutics Inc., a Canadian-based specialty pharmaceutical company, to commercialise in Canada Advaxis's product portfolio including its three lead drug candidates: axalimogene filolisbac (ADXS-HPV) for human papilloma virus (HPV)-associated cancers, ADXS-PSA for prostate cancer and ADXS-HER2 for HER2 expressing solid tumours.
In connection with the licensing agreement, Knight is purchasing directly from Advaxis 359,454 shares at $13.91 per share, which represents a 7 per cent premium to the price of Advaxis's common stock at market close on August 25, 2015. In addition, Sectoral Asset Management, a leading Canadian-based global healthcare investment advisor, is purchasing 1,437,815 shares at $13.91 per share directly from Advaxis on behalf of its clients. The combined gross proceeds to Advaxis from these direct investments is $25 million.
"We are extremely gratified to, in one transaction, monetise a non-core market with a well-established local partner, while simultaneously increasing our cash balance under very favorable terms," said Daniel J. O'Connor, president and chief executive officer of Advaxis.
"We have added both a key strategic partner in Knight and a top-tier healthcare institutional investor in Sectoral Asset Management. The license agreement with Knight is consistent with our strategy of focusing our resources in our core geographies."
Under the terms of the licensing agreement, Knight will be responsible for all commercial activities related to Advaxis current and future products, including axalimogene filolisbac, ADXS-PSA and ADXS-HER2, in Canada. Advaxis is eligible to receive double digit royalty as well as sales milestones.
"We believe Advaxis's technology has significant potential to treat a multitude of cancers," said Jonathan Ross Goodman, president and chief executive officer of Knight.
"This agreement, as well as our investment in the company, are representative of our confidence in Advaxis's future prospects. Upon approval, Knight looks forward to leveraging our local market expertise to maximise the commercial value of axalimogene filolisbac, ADXS-PSA and ADXS-HER2 in Canada."
"Sectoral Asset Management is pleased to make this significant investment in Advaxis on behalf of our clients," said Stephan Patten, deputy chief investment officer of Sectoral Asset Management.
"We believe the company's promising Lm Technology cancer immunotherapy platform, robust clinical pipeline and strong management team with a track record of execution combine to establish a compelling value proposition for Advaxis, and look forward to tracking the company's progress going forward."
Axalimogene filolisbac (ADXS-HPV) is Advaxis's lead Lm Technology immunotherapy candidate for the treatment of HPV-associated cancers and is in clinical trials for three potential indications: invasive cervical cancer, head and neck cancer, and anal cancer. In a completed randomized phase 2 study in recurrent/refractory cervical cancer, axalimogene filolisbac showed apparent prolonged survival, objective tumour responses, and a manageable safety profile alone or in combination with chemotherapy, supporting further development of the company's Lm Technology.
ADXS-PSA is an Lm Technology immunotherapy designed to target the prostate-specific antigen (PSA) associated with prostate cancer. ADXS-PSA is in clinical development both as a monotherapy and in combination with immune checkpoint inhibitors for the treatment of metastatic castration-resistant prostate cancer (mCRPC).
ADXS-HER2 is an Lm Technology immunotherapy being developed for the targeted treatment of HER2 expressing cancers. ADXS-HER2 has received orphan drug designation from the US Food and Drug Administration (FDA) for the treatment of osteosarcoma. Advaxis is developing ADXS-HER2 for both human and animal-health, and has seen encouraging data in canine osteosarcoma, which is considered a model for human osteosarcoma. Advaxis licensed ADXS-HER2 and three other immunotherapy constructs to Aratana Therapeutics, Inc. for the development of pet therapeutics.