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Arsanis stock tumbles after merger with X4 Pharmaceuticals

Published: 23:40 28 Nov 2018 AEDT

A researcher in the lab
The merger is expected to create a NASDAQ-listed, late-stage biotech focused on rare diseases and cancer

Arsanis Inc (NASDAQ:ASNS) shares plunged Wednesday after it announced it will be absorbed by privately-held X4 Pharmaceuticals Inc, a clinical-stage biotech focused on the discovery and development of novel therapeutics designed to improve immune cell trafficking linked to rare cancers, in a reverse merger that could result in layoffs.

Shares in Waltham-based Arsanis tumbled 11.7% to $3.64.

The company said the “all-stock merger” agreement would result in a combined company operating under the X4 Pharmaceuticals name that will focus on the development and commercialization of X4’s lead product candidate, X4P-001, and the advancement of X4’s pipeline of treatments for rare diseases of the immune system and rare cancers. 

The deal will enable Cambridge-based X4 Pharmaceuticals to become a publicly traded company. The combined company will keep the X4 name and be led by X4’s president and CEO Paula Ragan.

Arsanis president and CEO Rene Russo has resigned to “pursue other opportunities,” the companies said in a statement.

READ: Arsanis scraps its Phase 2 pneumonia drug trial; shares downgraded by Piper Jaffray

“X4 has pioneered the development of novel, oral drug candidates targeting pathways that have been demonstrated to improve immune cell trafficking and restore healthy immunity in genetically-driven rare diseases and lymphomas. Our lead product candidate, X4P-001, is expected to begin a Phase 3 trial in WHIM syndrome in the first half of 2019,” said X4 Pharmaceuticals CEO Paula Ragan.

Ragan said the merger with Arsanis would provide X4 with “financial resources, bolster our management, clinical development and regulatory teams” and enhance R&D capabilities in Europe through Arsanis’ Vienna facility.

“We believe this merger has the potential to be a transformative transaction for X4 that would position us well as we embark on the initiation of our global Phase 3 program and develop commercialization plans in WHIM syndrome and as we further develop our pipeline for other rare disease indications,” said Ragan.

Meanwhile, the Boston Business Journal reported that Arsanis may face more layoffs after the merger with X4 Pharma.

 

Contact Uttara Choudhury at uttara@proactiveinvestors.com

Follow her on Twitter@UttaraProactive 

 

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