EpiCept’s search for a strategic transaction has resulted in a planned reverse-merger with Immune Pharmaceuticals, a private Israel-based biopharma company focused on antibodies for inflammatory disease and cancer. The resulting company – to be called Immune Pharmaceuticals Inc – will have bertilimumab, which is ready to enter Phase II trials for ulcerative colitis, as its lead product, together with three other clinical-stage programmes. EpiCept shareholders will end up with 22.5% of the new entity. EpiCept believes the deal offers its shareholders the best option to participate in economic value created by a potential future development/commercial partnership for AmiKet, its topical product for chemotherapy-induced peripheral neuropathy.
 
Note: *PBT and EPS are normalised, excluding intangible amortisation and exceptional items.
Merger to form Immune Pharmaceuticals Inc
The proposed transaction would effectively reverse-merge Epicept and Immune Pharmaceuticals. EpiCept will issue ordinary shares to acquire all of Immune’s outstanding shares, which would leave EpiCept’s shareholders with approximately 22.5% ownership of the resulting company (fully diluted). Registration statements have not yet been filed, so the exact financial terms are not known. However, the transaction will likely require in excess of 300m new shares to be issued. The deal is expected to close during Q113, following shareholder approval.
Immune develops next-generation antibodies
Immune is a privately held Israeli biopharmaceutical company focused on the development of antibody therapeutics for treating inflammatory diseases and cancer. Its lead product, bertilimumab (previously CAT-213), is licensed for non-ophthalmic indications from the Canadian biotech iCo Therapeutics (and originated at Cambridge Antibody Technology in the UK). Immune also has a technology, NanomAbs, for generating antibody drug conjugates, in preclinical studies.
Financials: Funded to Q113
EpiCept ended Q3 with $1.1m in cash and $1.1m in restricted cash. A pro forma cash figure for the new company is not yet known. However, it is likely that the new company would have to raise additional funds in the short term.
Valuation: EV of $9m
EpiCept has an EV of $9m, based on its market cap of $7m, a senior secured loan of $4.1m and Q3 cash/restricted cash of $2.2m. Our previously published rNPV for EpiCept alone, which principally reflected AmiKet, was $29m.
EpiCept Corporation
Merger with Immune Pharmaceuticals
Deal to form Immune Pharma
 
Business description
EpiCept is a US specialty pharmaceutical company focused on the development and commercialisation of pharmaceutical products for cancer treatment and pain management.
Next events
AmiKet licensing deal
TBA
Crolibulin trial progress to Phase II
Q412
Q4 results
Q113
Analysts
Dr Wang Chong
+44(0)20 3077 5700
Robin Davison
+44(0)20 3077 5737
[email protected]
Edison profile page
Pharma & biotech
EpiCept Corporation | 22 November 2012
2
Immune Pharmaceuticals datasheet
Immune Pharmaceuticals Inc R&D pipeline
Product
Indication
Development notes
Bertilimumab (CAT-213)
Ulcerative colitis
42-pt Phase IIa study in active moderate to severe UC planned. Non-ophthalmic indications licensed from iCo Therapeutics (which itself licensed the product from AstraZeneca’s MedImmune).
AmiK
Peripheral neuropathy
Amitriptyline/ketamine fixed dose combination in topical formulation. Three Phase II trials completed (see below).
Ceplene (histamine dihydrochloride)
Maintenance of CR in AML
Rights held outside EU (where marketed) and Pacific rim. US development on hold, as a result of issues with FDA’s proposed design.
Crolibulin (EPC2407)
Anaplastic thyroid cancer
70-pt Phase I/IIa study of crolibulin/cisplatin in ATC. The Phase I stage consists of dose-escalation cohorts of 3-6 pts, dosed with crolibulin/cisplatin in 21-day treatment cycles. Primary endpoint of the first stage: S/T and MTD. The Phase II stage consists of pts randomised to crolibulin/cisplatin or cisplatin monotherapy. Primary endpoint of second stage is PFS. Results expected: Q413.
Azixa (verubulin)
Glioblastoma multiforme
Part completed Phase II trial in 30 pts in combination with carboplatin after failure on temozolomide