Erytech's merger with Pherecydes reaches the finish line after contentious few months

Erytech shareholders have sided with the company over a persistent activist investor, greenlighting a merger with Pherecydes months after the proposed deal was first announced. 

The French biotech said shareholders approved all resolutions that the board was in favor of at a shareholder meeting Friday, the most important of which was a merger with Pherecydes. The joint venture will be called Phaxiam Therapeutics. 

The wave-through from Erytech’s shareholders marks the end of a contentious few months that pitted the company against activist shareholder Akkadian Partners, which owns roughly 5% of the company’s stock. Akkadian said in May that it thought the proposed value of Pherecydes was “unjustified” following a top-down review of the proposed merger. The investors concluded that the deal did not serve the best interests of Erytech’s shareholders. 

Erytech has been unwavering in its counter-campaign, calling the statements from Akkadian “disinformation” and saying that the company’s best hope for survival was the merger. Whatever potential Akkadian believed Erytech had without the merger was misguided, the company contended. 

Erytech has been in a state of flux since the end of 2021 after pivoting the indication of lead asset eryaspase to leukemia following a late-stage flop in patients with pancreatic cancer. Less than a year later, the company dropped the asset all together to focus energy and resources on its drug delivery platform.

Merging with Pherecydes will be a reentry into the drug development space—albeit a totally different genre. Pherecydes is developing a series of bacteriophages meant to tackle bacterial infections and antimicrobial resistance. One of the company’s top priorities is a phase 2 phage therapy to treat prosthetic joint infection due to Staphylococcus aureus. The first patient was enrolled a year ago, but there’s been no update to the clinical trial record since, with enrollment still ongoing, according to the record.