Eloxx Pharmaceuticals had a tough 2020, starting out the year cutting staffers and hiring a new chief, and then had a stop-start relationship with its midstage cystic fibrosis trial amid COVID-19 chaos.
Now, it is buying up little-known early-stage biotech Zikani Therapeutics in an all-stock deal it believes will make it a leading light in ribosomal RNA-targeted therapies for treatment of rare diseases and cancer.
It will also see another major shake-up at the top of both companies as they become one. Sumit Aggarwal, previously the president and CEO of Zikani, now takes these roles at Eloxx, and Vijay Modur, M.D., Ph.D., Zikani’s chief scientific and medical officer, becomes Eloxx’s head of R&D.
Under the terms of the merge, stockholders of Zikani get 7.6 million Eloxx common shares and own around 16% of the combined company. The focus remains on cystic fibrosis—a field now dominated by new therapies from Vertex—with ELX-02, a eukaryotic ribosomal selective glycoside, in development for the lung disease.
The med is aimed at patients affected by nonsense mutations in the cystic fibrosis transmembrane conductance regulator gene.
Last year, the company’s stock fell around 30% when data from the drug showed reductions in white blood cell cystine were observed in the two higher doses in the first cohort (just three patients), but none of the reductions reached the therapeutic objective. The lowest dose also failed to demonstrate any treatment effect on white blood cell cystine.
Since then, the drug has been in a midstage trial program, but last year that was disrupted by COVID-19 lockdowns before getting back on track. New data should be out later this year.
This also comes just over a year since its first C-suite restructuring: Last February, ex-Medicines Company exec Gregory Williams, Ph.D., was lifted into the top spot from being chief operating officer while Neil Belloff became the new COO (from EVP, general counsel and corporate secretary) and Tomer Kariv, its CMO, stepped in as chairman.
Out the door was Rob Ward, who had been chair and CEO and came from a long line of biopharmas including AstraZeneca, Merck, Pfizer and Genentech. Following him was the biotech’s CFO and CBO. Now, with the Zikani deal, it’s all changing again.
Williams now steps down as CEO but remains on as an adviser to ensure a “smooth transition,” the company said.
“We are excited about the potential of ELX-02 and combining the companies opens the door to build a leadership position in genetic therapy by rapidly developing treatments that can restore functional proteins in patients with nonsense mutations in their RNA,” said Aggarwal.
“The combined capabilities of Eloxx and Zikani in chemistry, biology, regulatory and drug development, including Zikani’s TURBO-ZM synthetic chemistry platform for designing macrolide-based Ribosome Modulating Agents (RMAs), along with a committed leadership team and talented employees, will further accelerate our ability to impact the lives of those who have rare diseases with the type of urgency and novel thinking that they deserve.”
In addition to cystic fibrosis, the company plans to file an IND in 2022 for what could potentially become the first oral therapy for protein restoration for patients with nonsense mutations in recessive dystrophic epidermolysis bullosa (RDEB) and junctional epidermolysis bullosa (JEB). RDEB is an incurable, extremely painful and often fatal skin blistering condition caused by a lack of collagen type VII that is estimated to affect more than 3,000 people worldwide. JEB is the most severe form of EB, with most patients dying in infancy.
Eloxx was up 13% premarket.