Apollo reverse merges, raises $29M to back obesity devices

Lap-Band--Courtesy of Apollo Endosurgery

Apollo Endosurgery has struck a deal to acquire monoclonal antibody-focused Lpath in a reverse merger that will see Apollo's investors pouring about $29 million into the combined company.

The deal is expected to close during the fourth quarter of this year, Apollo said in a statement. At closing, the combined company will rename itself Apollo Endosurgery and it will apply to trade on the Nasdaq Global Market.

Apollo specializes in minimally invasive treatments for obesity and gastrointestinal disorders. Apollo acquired its flagship product, the Lap-Band, from Allergan in 2013. It is an adjustable gastric band for weight loss and FDA-approved to treat patients with a BMI of 30 to 40 and an obesity-related comorbidity. It has been flagging since a 2011 study reported that one-third of Lap-Band patients suffered device erosion with half of them needing surgery to remove the bands.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceBiotech!

Biopharma is a fast-growing world where big ideas come along every day. Our subscribers rely on FierceBiotech as their must-read source for the latest news, analysis and data in the world of biotech and pharma R&D. Sign up today to get biotech news and updates delivered to your inbox and read on the go.

In the same deal, Apollo also picked up the Orbera weight-loss balloon from Allergan. The device got the FDA green light in August 2015, following approvals for ReShape Medical’s balloon-based device and EnteroMedics’ neurostimulation implant. Orbera is delivered endoscopically and is inflated with saline once it is in the stomach. Both Orbera and ReShape’s device are indicated for obese adults with a BMI of 30 to 40, but the latter is only for patients that also have an obesity-related condition, such as diabetes or high cholesterol.

Meanwhile, San Diego-based Lpath develops monoclonal antibodies that target bioactive lipids, or lipids that contribute to disease. Its most advanced candidate, dubbed Lpathomab, is currently in Phase I trials. It targets lysophosphatidic acid, which plays a role in disorders of the central nervous system, fibrosis, eye diseases and cancer. 2015 was a tough year for the biotech: its kidney drug asonep missed the mark in a Phase IIa trial in March, and in May, its isonep failed in age-related macular degeneration in Phase II and sent the company's stock tumbling.

"Executing this transaction with Lpath is an expedient way to introduce our company to the public market,” said Apollo CEO Todd Newton in the statement. “With the additional equity support we will receive from Apollo's major investors as part of this transaction, we will have the resources to meet our near-term business needs."

Suggested Articles

By employing heart rate signals, physical activity and sleep quality, common Fitbit trackers may be able to predict the spread of the flu.

Nanox has raised $26 million to help fuel the development and commercialization of its "Star Trek"-inspired digital X-ray bed.

Oncology is clearly a major medical and societal issue, but one that sees too much focus from biopharmas at the expense of other killers.