Under the terms of the agreement, Eloxx will become a wholly owned subsidiary of Sevion. Upon completion of the transaction, Sevion will change its name to Eloxx Pharmaceuticals, Inc. and intends to apply to have its shares listed for trading on NASDAQ.
Under the terms of the agreement, Eloxx shareholders will receive shares of Sevion’s common stock reflecting approximately 70% of Sevion’s issued and outstanding share capital, subject to further adjustment.
The parties expect to raise at least $24 million in private equity investment rounds as a condition prior to consummation of the acquisition transaction.
Dr. Silvia Noiman, CEO of Eloxx said: “The transaction with Sevion positions Eloxx to become a leading rare disease company with sufficient capital to advance its pipeline of first-in-class small molecule therapeutics through significant value-creating events.
“We plan to initiate multiple clinical studies for ELX-02, our lead development candidate. Importantly, we anticipate achieving substantial clinical milestones over the course of 2017 and 2018 particularly in our lead clinical programs in cystic fibrosis and cystinosis patients carrying non-sense mutations.
“ELX-02 has shown pharmacological, pharmacodynamic and physiological effects in several animal models of genetic disease cause by non-sense mutations including Cystic Fibrosis (CF) , Cystinosis, Duchene Muscular Dystrophy (DMD), Rett syndrome and mucoplysaccharidose type I (MPS I).”
Dr. Phillip Frost said: “We are enthusiastic by the breadth of Eloxx’ technology and pipeline, the quality of the management team and the prospects for Eloxx’ products and technology, particularly its lead compound for the treatment of cystic fibrosis and cystinosis patients carrying non-sense mutations.
“Based upon its unique capabilities to restore full-length functional proteins in genetic diseases, we expect that Eloxx will establish itself over the coming years as an innovative leader in the development of therapeutics to treat a variety of rare and ultra-rare genetic diseases.”
The executive team of Eloxx Pharmaceuticals will manage the combined Sevion-Eloxx entity, which will be based out of Eloxx Pharmaceuticals’ current corporate offices in Waltham, Massachusetts and Rehovot, Israel. The combined entity’s leadership team will consist of Dr. Silvia Noiman, who will serve as Chief Executive Officer; and Dr. Pedro Huertas as Chief Medical Officer.
The respective Boards of Directors of both companies have approved the proposed transaction. Shareholders of Eloxx Pharmaceuticals, including Pontifax and Mr. Gilad Shabtai, who hold in the aggregate approximately 81% of its voting shares to date have entered into agreements in support of the proposed transaction.
While these agreements assure the approval of the transaction, all Eloxx Pharmaceuticals shareholders will be asked to vote on the transaction at a meeting of shareholders to be held shortly following signing of the agreement for the acquisition.
The transaction is expected to close on or before December 31, 2017, subject to shareholder approval and other customary closing conditions which are set forth in the agreement for the contemplated acquisition. Sevion will file a Current Report on Form 8-K within four (4) trading days of signing the agreement.