With cash expected to run out within a year, Idera Pharmaceuticals was on the lookout for a fresh strategy. And it seems to have found one in the acquisition of Aceragen and the biotech’s pipeline of late-stage rare disease therapies.
What caught Idera’s attention was Aceragen’s lead assets, including ACG-701, which is set to enter phase 2 trials later this year for acute pulmonary exacerbations associated with cystic fibrosis. Although sodium fusidate has been used in this indication for decades in the U.K. and Australia, it has yet to receive approval in the U.S.
ACG-701 is also undergoing a phase 2 trial as a potential treatment for a life-threatening infection called melioidosis, with an interim readout expected in the first quarter of next year.
The other cornerstone of Aceragen’s portfolio is ACG-801, a biologic enzyme replacement therapy that is due to enter clinical trials for Farber disease in the first quarter of 2023. The drug was itself acquired from Enzyvant by Aceragen shortly after the company launched last year.
Money had been looking tight at Idera as recently as the end of June, with $24.5 million in the bank that the company expected to run out as soon as August 2023. Bringing Aceragen into the fold doesn’t appear to extend the money much further—Idera said the companies’ combined cash runway of $27 million will “provide runway into Q3 2023”—but that should still be enough to hit key clinical milestones next year.
Idera is eyeing up peak sales of $650 million from the three lead programs, the company pointed out.
“After a thorough evaluation of strategic alternatives, we and our board of directors believe this acquisition represents the highest potential value creation opportunity for Idera’s stockholders,” said Idera’s former CEO and newly appointed chair of the board Vincent Milano in a Sept. 29 release.
The all-stock transaction will see all of Aceragen’s outstanding equity interests exchanged for a combination of shares of Idera’s common and preferred stock. Idera’s current shareholders will own approximately 33% of the combined company after the transaction.
The acquisition will also see Aceragen CEO John Taylor replace Milano to head the beefed-up Idera, with Aceragen Chief Medical Officer Carl Kraus, M.D., moving across to the same role at Idera.
Idera’s share price was up 6% to 40 cents apiece in premarket trading Sept. 29.