Orphan Drug Biopharm Company Hyperion Therapeutics to Acquire Andromedia Biotech

The biopharmaceutical company Hyperion Therapeutics has agreed to acquire Andromeda Biotech Ltd., an Israel-based subsidiary of Clal Biotechnology Industries Ltd. Andromeda is focused on the development of DiaPep277®, an immune intervention therapy for new onset Type 1 diabetes, an orphan indication with approximately 35,000 adults diagnosed annually in the US and Europe. DiaPep277 is currently being evaluated in a confirmatory PhaseIII clinical study in adult patients with new onset Type 1 diabetes. The Phase III study is fully enrolled, and results are anticipated in the first quarter of 2015.

At the closing of the transaction, Hyperion will pay $12.5 million in cash, less adjustments for expenses incurred in connection with the transaction, and 312,869 shares of Hyperion common stock (valued at approximately $7.85 million based on the average closing price of $25.09 per share for the 15 consecutive trading days ending April 17, 2014). Hyperion will potentially make contingent payments to Andromeda security holders, as follows:

  • potential global regulatory and approval milestones payments that total $120 million, the first of which would not be made until acceptance of the first marketing application filing for review in either the U.S. or Europe, whichever occurs first;
  • up to $430 million in commercial milestones, the first of which would be due upon achievement of annual worldwide net sales of $450 million; and
  • tiered contingent sales payments ranging from 10% on annual worldwide net sales up to $300 million to 17% for annual worldwide net sales that exceed $1.2 billion, with the exception of sales by distributors in certain territories, for which the rate is 25%.

As a result of the transaction, Andromeda will become a wholly owned subsidiary of Hyperion. The transaction has been approved by the boards of directors of both companies and is expected to close this quarter, subject to customary closing conditions. The agreement may be terminated by either company upon the occurrence of certain events, including if the transaction has not closed by June 15, 2014. Upon closing, Hyperion’s headcount is expected to increase by 10 employees with the addition of the Andromeda team.

DiaPep277 is a 24-amino acid peptide derived from human heat shock protein 60 (hsp60) that has demonstrated a specific and beneficial effect on the auto-immune attack of pancreatic beta cells that occurs in patients with Type 1 diabetes.DiaPep277 preserves endogenous insulin secretion by selectively inducing anti-inflammatory T-cells and impeding beta cell destruction without impacting other essential immunological functions or causing systemic immune suppression.

Hyperion Therapeutics, Inc. is a commercial-stage biopharmaceutical company focused on treating  orphan diseases. The company’s first commercial product, RAVICTI® (glycerol phenylbutyrate) oral liquid, was approved in February 2013 and is currently being marketed in the United States. The company also owns worldwide rights to BUPHENYL® (sodium phenylbutyrate) tablets and powder, which it markets in the U.S. The compound is also marketed internationally through business partners. The company is also developing glycerol phenylbutyrate for the potential treatment of hepatic encephalopathy.

Source: Hyperion Therapeutics

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