OSE Pharma, an immuno-oncology company with a specific immunotherapy activating T lymphocytes, currently in a registration phase 3 study, and Effimune, a biotech company specialized in immune regulation with clinical applications in autoimmunity, transplantation and immune-oncology, announced the signing of a proposed merger agreement.
The Boards of Directors of both OSE Pharma and Effimune have approved the proposed terms of the merger, which will be submitted for approval to the shareholders of the two companies during extraordinary general meetings that are expected to take place at the end of the second quarter of 2016. The merger will result in the shareholders of OSE Pharma owning approximately 71 per cent of the capital of the merged entity and the shareholders of Effimune, 29 per cent.
The new company will benefit from a balanced portfolio that would open up major avenues to growth and have a financial visibility of about two years to advance its projects toward greater attractiveness.
The objective of the merger is to create a new international enterprise that offers innovative immunotherapies based on the activation or regulation of the immune system. This new generation of products is optimized to better target key receptors of the activation or regulation of immune response and allow a durable therapeutic effect.
Emile Loria, chairman of the Board of Directors and the main shareholder of OSE Pharma, explained, “The merger with Effimune is a major step for both our companies, which have complementary expertise and multiple synergies. Now that our phase 3 registration trial of Tedopi has been launched in Europe and in the USA in the field of immuno-oncology, the development of other clinical and pre-clinical programs co-financed by grants or industrial companies opens up additional strong perspectives for growth. The proposed merger gives us a unique opportunity to create value for all of our shareholders in the rapidly growing field of immunotherapy.”
Dominique Costantini, chief executive officer of OSE Pharma, commented, “We are very happy to join forces with a leading team in immunotherapy and, specifically, with a group able to develop a next generation checkpoint inhibitor. We acknowledge the work of Effimune’s team that, based on its experience in the field of transplantation, developed at INSERM/French Institute of Transplantation, Urology and Nephrology in Nantes, France, has established major immunotherapy projects with the support of an international leading pharmaceutical group and developed a first product, a CD28-antagonist that prevents the activation of T cells, which is currently at the end of clinical phase 1. In the future, the merged entity will have a balanced portfolio, from R&D through to the last clinical phase before registration, and a diversified risk profile.”
Maryvonne Hiance, chairman of Effimune, said, “This merger capitalizes on immuno-activation and immuno-regulation technologies. It is the perfect lever to deploy our programs and optimize innovative drug candidates in the field of immuno-oncology, autoimmune diseases and transplantation. These next generation products are attractive for the pharmaceutical industry, and provide the flexibility to out-license either at an early stage or later in development, retaining more value for the group.”
Bernard Vanhove, chief executive officer of Effimune, added, “We are very proud of the complementarity of our teams, experience and networks of international experts in the field of immunotherapy, which is one of the major assets of this merger. The new company will provide scientific and clinical innovations to patients requiring a restoration of immunological functions and this is our shared ambition.”
The company will have an innovative technological background, know-how to select and optimize the targeting of receptors and an expertise in development through all the phases required for registration. Product development will be carried out by internal teams or through strategic industrial partnerships.
The product portfolio will include two products under clinical development:
Tedopi, a specific T immunotherapy that activates cytotoxic T lymphocytes and targets patients with Non-Small Cell Lung Cancer (NSCLC) and who are HLA-A2 positive.
Tedopi is currently in phase 3 registration clinical trial for lung cancer in Europe and in the USA; trial completion is expected in 2018.
A phase 2 clinical trial of Tedopi combined with a checkpoint inhibitor is considered for lung cancer in 2017, in partnership with a European research organization.
New indications for other cancers involving a strong medical need are considered with industrial partners.
FR104 is currently in phase 1 clinical trial and targets indications for autoimmune diseases and transplantation.
FR104, a CD28-antagonist, is an optimized monoclonal antibody fragment targeting the CD28 receptor, a key receptor in effector T lymphocytes. These effector T lymphocytes are harmful in the case of autoimmune diseases and transplantation.
At the end of 2013, with FR104 at a preclinical stage, a global option and license agreement was signed with Janssen Biotech, owned by Johnson & Johnson (one of the world leading pharmaceutical groups), which allowed the development of the product to this stage. This option could be exercised by Johnson & Johnson in the second half of 2016 to continue phase 2 clinical development, with expected payments of milestones and royalties.
The product portfolio will also include products in preclinical development:
Effi-7 is being developed for autoimmune diseases and transplantation.
It is a monoclonal immunomodulatory antibody targeting the CD127 receptor, the alpha chain of the Interleukin 7 receptor, with in vivo proof of concept for several autoimmune models.
Being developed as part of the consortium EFFIMab, led by Effimune, the Effi-7 project is financed by Bpifrance for an amount of € 9.1m (with the INSERM, the APHP, the regional hospital of Lille and PxTherapeutics, a bioproduction company and subsidiary of Aguettant).
Effi-dem is being developed for immuno-oncology.
It is a second generation checkpoint inhibitor. It targets particular suppressor cells present in the tumor microenvironment, associated with a poor prognosis. They are myeloid-derived suppressor cells (MDSC) and macrophage cells associated with tumors called “Tumor Associated Macrophages” or TAM. TAM cells are a major part of the tumor microenvironment in the case of aggressive tumors and are linked to malignant progression.
In terms of research and development, the new entity may develop other drug candidates targeting new receptors of interest for autoimmune and inflammatory diseases, immuno-oncology and transplantation.
The increased scale of the company should give it the capacity to strengthen its agreement and licensing activities to ensure product development and significantly help to cover its cash-flow needs, with better access to milestones and royalties.
Every product in the portfolio is intended to have the leading or ‘blockbuster’ potential in its respective market.
Assuming completion of the merger, Dominique Costantini will assume the role of chief executive officer of the new group. Maryvonne Hiance will become the vice-chairman of the Board of Directors, alongside Emile Loria, chairman. Two independent Board Directors from Effimune will join and strengthen the Board of Directors alongside current board members of OSE Pharma.
Two chief operating officers will assist the chief executive officer: Bernard Vanhove, chief operating officer in charge of R&D and international scientific collaborations, and Alexis Peyroles, chief operating officer in charge of operations, finance, agreements and licenses within the new entity.
To reflect the change in company profile brought by the merger, it is expected that OSE Pharma will be renamed “OSE Immunotherapeutics,” and the headquarters will be transferred from Paris (France) to Nantes (France), reflecting Effimune’s strong academic establishment.