After laying off all nonessential workers and halting nonessential R&D work this summer, Entero Therapeutics is inking a reverse merger with antibody drug conjugate (ADC) rival biotech Journey Therapeutics.
Entero has signed a binding term sheet in which private biotech Journey is slated to acquire 99% of Entero’s equity, according to a Nov. 13 release. Upon completion of the proposed merger, the biotech will run under Journey’s name and apply for continued trading on the Nasdaq.
Entero is currently listed under the ticker “ENTO,” with a share price of 57 cents as of 10 a.m. ET today.
Once the merger closes, Journey CEO and chair Henry Ji, Ph.D., is expected to lead the way. The biotech will prioritize Journey’s “ADC-like” candidates targeting gynecological cancers, advanced non-Hodgkin’s lymphoma and other hard-to-treat cancers.
Journey’s pipeline is built around a nano-immunoconjugates (NIC) platform stemming from the Mayo Clinic lab of Svetomir N. Markovic, M.D., Ph.D., an oncologist and hematologist at the Rochester, Minnesota-based clinic.
The tech mixes nanotechnology with immunoconjugates, and is designed to offer an improved alternative to ADCs by allowing simultaneous multi-drug delivery to several cancer targets.
The science is being tested in phase 1 trials with two prototype NICs for patients with end-stage metastatic ovarian/endometrial cancer or non-Hodgkin’s lymphoma.
“Journey looks forward to this proposed merger with Entero Therapeutics, as it allows us to build a publicly traded company that is driven toward advancing Journey’s first-in-class, next-gen nano-immunoconjugates portfolio to rival the advanced antibody-drug conjugates products,” Journey CEO Ji said in the release. “This opportunity arises at a momentous stage in Journey’s development, as we prepare for clinical trials of our two leading assets with encouraging initial clinical results.”
The combined company will also continue development of Entero’s existing clinical assets, including latiglutenase, a phase 3-ready oral candidate for celiac disease. The biotech, formerly called First Wave BioPharma, picked up latiglutenase in its March acquisition of ImmunogenX.
ImmunogenX had a $7.5 million credit facility, saddling Entero with debt. In August, creditor Mattress Liquidators came calling, requiring immediate payment of almost $7 million.
In response, Entero laid off all nonessential employees, gave up its office in Boca Raton, Florida, and paused nonessential R&D activities. The biotech’s CEO James Sapirstein also left the company.
At the time, the biotech said it was exploring all options, including raising capital, restructuring the debt and identifying strategic alternatives.
Plenty of other biotechs have taken a similar course, with Paragon Therapeutics’ spinout Jade Biosciences inking a reverse merger with Aerovate Therapeutics at the end of October, and more recently Swiss biotech Relief Therapeutics entering a reverse merger with private U.S. biotech Renexxion.