As per the understanding, Acasti will acquire Grace’s entire therapeutic pipeline consisting of three unique clinical stage and multiple pre-clinical stage assets, according to regulatory filings. The assets are supported by an intellectual property portfolio consisting of more than 40 granted and pending patents in various jurisdictions worldwide.
Though both the companies did not disclose the deal size, sources in the know said, the implied valuation of would be at around $138 million.
Grace’s three lead programs have all received Orphan Drug Designation1 from the U.S. Food & Drug Administration (FDA), which could provide up to seven years of marketing exclusivity in the United States provided certain conditions are met.
It is anticipated that the cash at closing of about $64 million will be principally used to pursue the clinical development of the first two assets through Phase 3, and further advance earlier pipeline assets into the clinic.
The Proposed Transaction has been approved by the boards of directors of both companies and is supported by Grace shareholders through voting and lock-up agreements with the Company. The transaction remains subject to approval of Acasti stockholders, as well as applicable stock exchanges.
Co-founded by Hyderabad-based Vimal Kavuru and George Kottayil, Grace develops drug candidates to treat postherpetic neuralgia, subarachnoid hemorrhage, ataxia-telangiectasia, aortic aneurysm, and trigeminal neuralgia. In 2007, Mr. Kavuru co-founded Celon Labs Ltd. in India, a Sequoia Capital funded specialty pharmaceutical company, which was later acquired by CDC-backed Zanzibar Pharma.
““Merging with Acasti is a significant opportunity for Grace, as it allows us to partner with an experienced team, well-versed in drug development and commercialization, with a strong commitment to the highest standards of corporate governance. As a result of the merger, we anticipate the combined company will have the financial resources to fund our lead programs to critical value inflection points,” Kavuru said.
The Grace group had traditionally used M&A as a strategy and now expanding globally. The group owns Rising Pharma, a US Generic Pharmaceutical firm, Casper Pharma , which does branded pharmaceuticals business in the US and Cronus Pharma, a Hyderabad-based global animal health company.
“Big pharma companies are looking to augment their product pipelines. SPACs, VC are the other Competing Pools of money chasing biotech assets,” said Rahul Saikia, head of strategy and M&A for group companies headed by the founder of Grace Therapeutics. “Neuroscience has been particularly hot in the recent past to add to the pool of drug discovery areas, while cancer, immunology as therapy areas and cell and gene therapy as technology platforms. Post COVID – the flurry of programs focused on vaccines is widely reported and the race to expand indication of existing medicines as treatment options. However we are yet to see a wider impact on Infectious Disease programs both in announced programs in deal activity,” said Saikia.