Rafael Holdings Inc. in Newark and Rafael Pharmaceuticals Inc. in Cranbury entered into an agreement to merge into one late-stage clinical oncology company focused on cancer metabolism-based therapeutics, the companies announced on June 21.
The boards of directors of both companies and a special independent committee of Rafael Holdings’ board of directors unanimously approved a merger agreement.
Howard Jonas will serve as the chairman, Ameet Mallik will serve as chief executive officer and Sanjeev Luther, president and CEO of Rafael Pharmaceuticals, will join the combined company’s board of directors.
The merged company will retain the Rafael Pharmaceuticals name and Rafael Holdings’ listing on the New York Stock Exchange. Rafael Holdings and its subsidiaries currently own a majority of the outstanding stock of Rafael Pharmaceuticals and a significant stake on a fully-diluted basis.
“The strategic merger of Rafael Pharmaceuticals and Rafael Holdings will create a publicly traded, late-stage clinical oncology company positioned to synergistically leverage the assets of both companies. The merged company will focus on developing therapeutics that selectively target cancer metabolic pathways while simultaneously harnessing the immune system,” Jonas said in a prepared statement.
The company’s lead drug, CPI-613 (devimistat), is in Phase 3 clinical trials for metastatic pancreatic cancer and relapsed or refractory acute myeloblastic leukemia.
According to Jonas, devimistat in combination with modified FOLFIRINOX exhibited a 61% objective response rate in an early clinical trial.
“I am truly excited to lead the company at this pivotal time as we advance devimistat, a pipeline in a molecule, through two Phase 3 registrational clinical trials and several Phase 1 and Phase 2 clinical trial programs in additional indications,” said Mallik in a prepared statement. “I look forward to working with my new colleagues and world-leading scientific advisors to continue to advance devimistat, as well as our novel early-stage pipeline, through multiple important milestones over the next eighteen months as we evolve towards a fully-integrated oncology company.”
Results of devimistat’s Phase 3 clinical trials in metastatic pancreatic cancer are expected in the fourth quarter. Devimistat has received fast-track designation from the U.S. Food and Drug Administration for metastatic pancreatic cancer and AML, and it has received orphan drug status for the treatment of pancreatic cancer, AML, myelodysplastic syndrome, Burkitt lymphoma, peripheral T-cell lymphomas and soft tissue sarcoma.
Based on the formula set forth in the merger agreement, holders of Rafael Pharmaceuticals capital stock will receive shares of Rafael Holdings Class B common stock amounting to approximately 48% of the currently outstanding capitalization of the company. Upon closing, Rafael Holdings will acquire for $30 million the remaining membership interest in Altira Capital & Consulting LLC that it does not already own.
Houlihan Lokey is the financial advisor and Olshan Frome Wolosky LLP is the legal advisor to the independent special committee of the board of directors of Rafael Holdings in the transaction. Schwell Wimpfheimer & Associates is the legal advisor of Rafael Holdings in the transaction.
Raymond James & Associates is the financial advisor and Orrick is the legal advisor to Rafael Pharmaceuticals in the transaction.