By merging with struggling Erytech, Pherecydes spies opportunity to boost AMR strategy

In the year and a half since Erytech Pharma was blindsided by a phase 3 fail that forced a pivot from pancreatic cancer to leukemia, the company has been feeling out strategic options. Now, fellow French biotech Pherecydes has spotted an opportunity to take advantage of Erytech’s money, expertise and U.S. footprint via a merger.

The combined company will maintain Pherecydes’ focus on extended phage therapies—natural bacteria-killing viruses—to combat antimicrobial resistance (AMR). The new, as yet unnamed entity will have around 41 million euros ($35.6 million) in the bank that could fund both current and new clinical programs into the third quarter of 2024.

Top of the new company’s to-do list will be a European expansion of the ongoing PhagoDAIR phase 2 trial in patients with knee or hip prosthetic joint infections due to the bacteria Staphylococcus aureus. Results from the study are expected in the first quarter of next year.

Pherecydes already has plans for two new midstage trials in the U.S. One study in patients with endocarditis due to S. aureus is expected to launch in the middle of the year, with a trial in complex urinary tract infections due to E. coli penciled in for the first quarter of 2024.

So far, it sounds like business as usual for Pherecydes. But the biotech said the combined company will also build an R&D strategy around Erytech’s expertise. The idea is to use the company’s red blood cell-derived vesicle and oncology know-how to develop phage and endolysins therapeutic approaches in anti-infective fields like AMR and beyond. The new company may even apply these techniques to fields as varied as food, cosmetics and animal health, the biotechs speculated in their joint release.

Alternatively, the combined entity may turn its attention to new pathogens beyond Pherecydes’ current focus of S. aureus, Pseudomonas aeruginosa and E. coli, the two companies said.

“After the setback of our phase 3 trial in pancreatic cancer, we have been looking to leverage our established company structure and capabilities by adding a clinical stage asset in an area of high unmet need,” Erytech CEO Gil Beyen said in the release. “We and our board of directors believe the combination of Erytech and Pherecydes would form a company well positioned to be a global leader in phage therapies and provide a much-needed solution to address the increasingly alarming health context caused by antimicrobial-resistant bacteria.”

The merger will see Pherecydes absorbed into the publicly listed Erytech, with Pherecydes shareholders receiving 15 new Erytech shares for every four of their current shares. Pherecydes CEO Thibaut du Fayet will move across to head up the combined company, with Erytech’s Beyen serving as vice chairman of the board.

“Our board of directors fully supports this transaction and is convinced that Erytech and Pherecydes will gather critical expertise and capabilities to boost our research programs, as well as a seasoned and very complementary management team, and an international position providing access to U.S. investors and stakeholders,” du Fayet said in the release.