Advaxis spies merger with Ayala as route back to Nasdaq

With $20 million on hand and the second part of a potentially registrational phase 2/3 study just getting underway, Ayala was facing a potential cash crunch. But Advaxis may have solved its problems—in return for the hope of a return to the Nasdaq.

Ayala is merging with Advaxis, linking arms—and bank accounts—as each looks to propel its lead program. The two companies will prioritize the development of AL102 to treat desmoid tumors and ADXS-504 for patients with prostate cancer. Advaxis CEO Kenneth Berlin said in a release that the combined cash will likely be enough to get through key clinical milestones in 2023.

Another reason for Advaxis' enthusiasm for the merger is to “help drive our efforts to return to a Nasdaq listing,” Berlin said. The biotech dropped from the leading stock exchange down to the OTC Market in 2021, and it sounds like Advaxis has been looking for a way back. Ayala continues to trade on the Nasdaq, although its stock took a knock this morning, dropping 22% to 70 cents as of 10.40 am ET Wednesday.

The merged company—which is yet to decide on a name—will be led by Advaxis’ team, with Ayala CEO Roni Mamluk, Ph.D., and CFO Yossi Maimon resigning. Ayala CMO Gary Gordon, M.D., is also stepping down but will remain in an advisory role “for a period of time.” The new company’s board will include two members designated by Advaxis, and four chosen by Ayala alongside Berlin. 

In its second-quarter earnings report, Advaxis estimated it would be able to extend its $28.2 million in the bank into the third quarter of 2024. The merger means Ayala will now have “additional financial resources as well as additional infrastructure in the U.S.,” Mamluk said in the release.

First up on the revamped company's clinical agenda will be inching AL102 toward FDA approval. Interim data from part A of the phase 2/3 trial presented at the 2022 European Society for Medical Oncology found that among nine patients treated with the optimal dose level, one had a partial response and eight had stable disease after 16 weeks of treatment. A couple of weeks later, Ayala nabbed FDA fast-track designation for the asset. 

Ayala is a few steps behind SpringWorks Therapeutics, which in May posted a phase 3 win of its own desmoid tumor treatment. At the time, SpringWorks' success was also Ayala’s gain, as the latter nabbed a bump in its share price off the positive prospect. Desmoid tumors are noncancerous growths that appear in connective tissue, which can be quite painful. 

Next on the docket is ADXS-504, which is currently advancing through a phase 1 trial. In June, Advaxis said that the company had completed administering the first dose level and was moving on to the second. An early readout found that the first dose level was tolerable and the company said it planned to present prostate-specific antigen data at a future medical conference.