HALIFAX, Nova Scotia– Appili Therapeutics Inc. (TSX: APLI; OTCQX: APLIF) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases, and AiPharma Global Holdings LLC (“AiPharma”), a private pharmaceutical research, development and commercialization company, today announced a strategic alliance to advance the global development of Avigan®/Reeqonus™ (favipiravir), a broad-spectrum oral antiviral currently being evaluated by Appili and its global consortium of partners for the potential treatment and prevention of COVID-19, including in Appili’s Phase 3 COVID-19 treatment trial PRESECO (PREventing SEvere COVID-19) which completed enrollment last week. Appili and AiPharma entered into a strategic equity transaction (the “Definitive Agreement”) to establish minority positions in each other’s businesses, further align their goals and participate in each other’s respective economic interests.
Selected highlights of the strategic alliance include:
- Accelerated and strengthened development of Avigan/Reeqonus (favipiravir) on a coordinated and worldwide basis
- AiPharma expects access to cash flows tied to the growing worldwide sales of Avigan/Reegonus via its 50% equity stake in consortium member Global Response Aid (“GRA”)
- The establishment of a joint scientific steering committee to coordinate the rapid development of Avigan/Reeqonus
- Equity transaction: Appili exchanges shares with AiPharma for strong alignment and mutual economic participation in each other’s respective businesses
- Plans to bring on additional programs, assets and partners to further the goal of becoming a global, integrated and infectious disease specialized healthcare company
“COVID-19 continues to be an immense health threat with little relief in sight. The world needs safe and effective oral antivirals that can help alleviate the threat of COVID-19, and I believe Avigan/Reeqonus has the potential to change the trajectory of this pandemic,” said Armand Balboni, M.D., Ph.D., Chief Executive Officer of Appili Therapeutics. “This partnership will help us further streamline activities and move quickly following the PRESECO readout to key clinical, regulatory and commercial milestones.”
Alessandro Gadotti, Chief Executive Officer at AiPharma, added, “This is an exciting and important partnership for us. Our work with Appili will have real impact for people and communities around the world. The strength of oral antiviral treatments, such as Avigan/Reeqonus, in real terms is that they fight COVID-19 in the community and not in hospitals – which can majorly reduce pressures on healthcare systems. Our joint product portfolio puts us on the front line in the fight against COVID-19 and future pandemic preparedness. Our company was established by a team of drug development, infectious disease, data scientists and commercialization experts. We believe that this expertise, paired with Appili’s promising pipeline of specialty therapeutics, will allow us to evolve into a global integrated infectious disease healthcare company.”
One of AiPharma’s portfolio companies is GRA, a 50-50 joint venture with Agility (KSE/DFM: AGLTY) and a member of the consortium focused on the global development, commercialization and distribution of Avigan/Reeqonus. The consortium, which also includes the original Avigan/Reeqonus developer, FUJIFILM Toyama Chemical Co. Ltd., has made Avigan/Reeqonus available in jurisdictions where it is authorized as it completes its Phase 3 clinical program and has realized significant and rapidly growing global product revenues since the start of the pandemic. Through its participation in the consortium advancing Avigan/Reeqonus worldwide, GRA is entitled to 50% of the net profits from the worldwide sales of Avigan/Reeqonus (outside of Japan, China and Russia; net of any profit shares paid to Appili).
The partnership between Appili and AiPharma will include the formation of a joint scientific steering committee to further coordinate global clinical and regulatory activities for Avigan/Reeqonus around the world. The steering committee will include the following members:
- Dr. Armand Balboni, Chief Executive Officer, Appili
- Dr. Yoav Golan, Chief Medical Officer, Appili
- Dr. Alessandro Gadotti, Chief Executive Officer, AiPharma
- Dr. Richard Kaszynski, Chief Medical Officer, AiPharma
Under the terms of the equity transaction, AiPharma will receive that number of Class A common shares of Appili (“Appili Shares”) as is equal to 24% of the issued and outstanding Appili Shares immediately prior to the Definitive Agreement (calculated on a non-diluted basis). AiPharma has also been granted certain investor rights, including pre-emptive rights, certain consent rights and registration rights (which rights will be extinguished if the AiPharma holdings fall below 10% of the issued and outstanding Appili Shares). Assuming no further equity issuances, it is expected that AiPharma will hold approximately 19.4% of the issued and outstanding Appili Shares immediately following closing.
In exchange, Appili will receive approximately 6% of the issued and outstanding AiPharma shares (calculated on a non-diluted basis).
The Toronto Stock Exchange (“TSX”) has conditionally approved the transactions described herein (the “Transaction”). Closing of the Transaction is conditional upon obtaining certain third party consents and receipt of final TSX approval, which is subject to satisfaction of customary listing conditions (including clearance of requisite personal information forms on behalf of AiPharma).
The Transaction is expected to be completed in Q4 2021.
