Entasis Therapeutics, the AstraZeneca spinout behind novel … – Boston Business Journal
Entasis Therapeutics, the Waltham-based novel antibiotics developer that spun out of AstraZeneca plc in 2015, has been acquired by its majority shareholder, California’s Innoviva Inc.
Innoviva Inc. (Nasdaq: INVA), which had already owned 60% of Entasis (Nasdaq: ETTX), paid $2.20 per share to acquire the rest of Entasis’ stock — a 60% premium. The Waltham drugmaker’s stock, which employed 51 people as of the end of 2021, has skyrocketed accordingly, trading at $2.19 each as of 1:30 p.m. Tuesday.
Innoviva was set up as a spinout of Theravance, Inc. with the singular purpose of acting as a receptacle for royalties from lung drugs that Theravance had developed with pharmaceutical giant GSK plc (NYSE: GSK). Today, its portfolio also includes Armata Pharmaceuticals (NYSE: ARMP), a Californian drugmaker that, like Entasis, is in the business of making new treatments for drug-resistant bacterial infections. Unlike Entasis, Armata is focused on phage therapy, which involves the use of highly specific viruses called bacteriophages to hunt down and destroy bacteria.
Entasis CEO Manos Perros said Innoviva has been an investor in Entasis since early 2020. It has made a handful of additional investments over the last two years, and in February, Innoviva made its offer to acquire Entasis completely. After some back and forth, Innoviva and Entasis came to an agreement on transaction terms this month and announced the acquisition on Monday. It should be finalized in the third quarter of this year.
Perros has been candid about Entasis’ need for cash. As of the end of March, the company had $33.5 million cash on hand, just enough to last through the third quarter of this year. Entasis recently completed Phase 3 trials for its lead drug, an antibiotic for multidrug-resistant Acinetobacter infections, and plans to file for FDA approval in mid-2022. The deal with Innoviva should provide the ability to set up a commercial infrastructure for the drug, assuming it is approved.
«The company would need more money to bring this product to market,» Perros told the Business Journal. «They clearly felt there was enough value here, potential, to work with.»
Entasis is one of several Boston-area novel antibiotics developers that have found themselves strapped for cash amid a difficult funding environment. While they are subject to the same risks and market pressures as any biopharmaceutical company, antibiotics companies face a significant additional hurdle: To avoid creating more opportunities for bacteria to evolve resistance, physicians need to prescribe antibiotics infrequently, making sales opportunities low by design.
Perros has spent years speaking with policymakers about how to implement advance purchase agreements for antibiotics so that companies like his don’t «die on the vine,» so to speak. Now, Innoviva has stepped in to provide the runway that Entasis needs.
«I think the ecosystem as a whole will respond to the medical need and take the opportunity to move forward products that will make a difference,» Perros said. «[These are] novel antibiotics that, if approved, will become lifesavers. I think that news is really a validation of our work over the last seven years.»
© 2022 American City Business Journals. All rights reserved. Use of and/or registration on any portion of this site constitutes acceptance of our User Agreement (updated January 1, 2021) and Privacy Policy and Cookie Statement (updated July 1, 2022). The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of American City Business Journals.
