Arsanis Inc (NASDAQ: ASNS) is flying early on in the pre-market this morning, and for good reason. The company announced that it has entered into a definitive merger agreement, exciting investors and sending the stock screaming for the top. Today, we’ll talk about:
- The merger;
- what we’re seeing from ASNS stock as a result; and
- what we’ll be watching for ahead.
ASNS Announces Merger News
As mentioned above, Arsanis is having an incredibly strong start to the trading session this morning after the company announced merger news. In a press release issued a couple of hours ago, the company said that it has entered into a definitive merger agreement with X4 Pharmaceuticals.
Under the terms of the agreement, X4 Pharmaceuticals will merger with a wholly-owned subsidiary of Arsanis in an all-stock transaction. Once the transaction is complete, the combined company will operate under the X4 Pharmaceuticals name. X4 will focus on the commercialization and development of its lead candidate, X4P-001 as well as the advancement of its pipeline of treatments for rare diseases of the immune system and rare cancers.
In the release, ASNS explained that X4 Pharmaceuticals is a privately held company. The company is in the process of developing oral, small molecule drug candidates that inhibit the binding of chemokine CXCL12 to C-X-C receptor type 4.
The company’s lead candidate, X4P-001, is expected to enter a Phase 3 trial in the first half of 2019. The candidate is being assessed as a potential treatment of Warts, Hypogammaglobulinemia, Immunodeficiency, and Myelokathexis (WHIM) syndrome, a rare genetic, primary immunoefficiency disease.
Along with the merger agreement, ASNS announced that it has appointed Michael P. Gray as the President and CEO of the company. Mr. Gray will also join the Board of Directors and serve in his existing role as CFO. Rene Russo, PharmD, has resigned as President and CEO to pursue other opportunities.
In a statement, Paula Regan, PhD, President and CEO at X4 Pharmaceuticals, had the following to offer:
X4 has pioneered the development of novel, oral drug candidates targeting pathways that have been demonstrated to improve immune cell trafficking and restore healthy immunity in genetically-driven rare diseases and lymphomas. Our lead product candidate, X4P-001, is expected to begin a Phase 3 trial in WHIM syndrome in the first half of 2019… WHIM syndrome is a serious, genetic primary immunodeficiency disease that is caused by a mutation in the CXCR4 receptor, the precise pathway targeted by X4P-001. X4P-001 has been shown in a Phase 2 clinical trial to increase neutrophils and lymphocytes in the blood and decrease wart lesions, a hallmark symptom of WHIM syndrome. In addition to WHIM syndrome, we believe there are other primary immunodeficiencies in which the CXCR4 receptor is implicated and therefore may be treatable with X4P-001.
The merger with Arsanis would provide X4 with additional financial resources, bolster our management, clinical development and regulatory teams and enhance our research and development capabilities in Europe through Arsanis’ Vienna facility. We believe this merger has the potential to be a transformative transaction for X4 that would position us well as we embark on the initiation of our global Phase 3 program and develop commercialization plans in WHIM syndrome and as we further develop our pipeline for other rare disease indications.
What We’re Seeing From The Stock
One fo the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Arsanis, the news proved to be overwhelmingly positive. AFter all, this merger will bring assets to the table that have serious potential in the treatment of rare diseases. So, it comes as no surprise to see that excited investors are sending the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:11), ASNS is trading at $1.43 per share after a gain of $0.27 per share or 23.28% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on ASNS. In particular, we’re interested in following the story surrounding the merger. After all, this merger has the potential to lead to revenue opportunities ahead. While the agreement is definitive, it is still subject to customary closing conditions as well as regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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