Strategic alliance for the global development of oral antiviral medicine Avigan®/ReeqonusTM (favipiravir) for the treatment of COVID-19 and other infectious disease programs
New agreement with existing consortium partner AiPharma enhances complementary skills and creates global reach with expanded resources
HALIFAX, Nova Scotia, September 29, 2021 – 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.
Additional Early Warning Disclosures of AiPharma
Pursuant to the terms of the Definitive Agreement, AiPharma has agreed to subscribe for and purchase (the “Investment”) 15,079,709 Appili Shares, in consideration for the issuance of 66,721 shares of AiPharma, representing approximately a 6% interest in AiPharma as at September 28, 2021, with a value, based on the closing price of Appili’s shares on the Toronto Stock Exchange on September 28, 2021, of approximately C$15.4 million.
Immediately prior to the Investment, AiPharma, its affiliates and joint actors owned no voting or equity securities in the capital of Appili. Upon closing of the Investment, AiPharma and its affiliates will own 15,079,709 Appili Shares, representing approximately 19.4% of the currently outstanding Appili Shares, on a non-diluted basis. When acquired, the Appili Shares will be held by AiPharma for investment purposes and in furtherance of the strategic alliance of Appili and AiPharma on the potential joint development and commercialization of favipiravir and all other molecules of Appili’s portfolio, as is further provided for in the Definitive Agreement. Depending on market conditions and other factors, including AiPharma’s business and financial condition, AiPharma or its affiliates may acquire additional securities of Appili or dispose of some or all of the securities of Appili that it owns at such time.
AiPharma is a limited liability company organized under the laws of the State of Delaware. The principal business of AiPharma is pharmaceutical research, development and commercialization. AiPharma’s address is One JLT (14th Floor), Jumeriah Lakes Towers, Dubai, United Arab Emirates, PO Box 103805.
An early warning report with additional information in respect of the foregoing matters will be filed and made available on the System for Electronic Document Analysis and Review (SEDAR) at www.sedar.com under Appili’s profile. To obtain a copy of this report, you may also contact John White (General Counsel, AiPharma) at +971 58 554 8666.
About Appili Therapeutics
Appili Therapeutics is an infectious disease biopharmaceutical company that is purposefully built, portfolio-driven, and people-focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili’s goal is to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. As part of a global consortium, Appili is sponsoring late-stage clinical trials evaluating the antiviral Avigan/Reeqonus for the worldwide treatment and prevention of COVID-19. The Company is also advancing a diverse range of anti-infectives, including a broad-spectrum antifungal, a vaccine candidate to eliminate a serious biological weapon threat, and two novel antibiotic programs. Led by a proven management team, Appili is at the epicenter of the global fight against infection. For more information, visit www.AppiliTherapeutics.com.
AiPharma is a biopharmaceutical company focused on discovering, developing, and commercializing oral therapies to address the unmet medical needs of patients with life-threatening viral diseases. Leveraging the Company’s deep understanding of antiviral drug development, nucleotide chemistry, biology, biochemistry, and virology, AiPharma has built a nucleotide prodrug platform to develop novel product candidates to treat single-stranded ribonucleic acid, or ssRNA, viruses, which are a prevalent cause of severe viral diseases. Currently, AiPharma is focused on the clinical and commercial development of orally available, potent, and selective nucleotide prodrugs for difficult-to-treat, life-threatening viral infections, including severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes COVID-19, dengue virus, hepatitis C virus (HCV) and respiratory syncytial virus (RSV). AiPharma also holds exclusive commercial rights for Avigan in Russia and China. For more information, please visit www.aipharmalab.com.
About Global Response Aid (GRA)
Agility (KSE/DFM: AGLTY), one of the world’s leading logistics companies and AiPharma, an innovative pharma research, development and commercialization company based in Dubai, established Global Response Aid (GRA) to address the market challenges created by the COVID-19 pandemic and other threats to public health. GRA delivers innovative, effective healthcare solutions through a range of pharmaceutical products and technology platforms. It works closely with governments, regulatory authorities, hospitals, clinics, healthcare providers, life sciences companies, NGOs and public institutions to develop strategies that allow them to tackle public health challenges.
Forward looking statements
This news release contains “forward-looking statements,” which reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities, including statements with respect to: the anticipated closing date of the Transaction, the potential benefits of the Transaction, AiPharma’s expectations regarding its ability to access potential cash flows from the consortium sales of favipiravir, the potential use of favipiravir for the treatment of COVID-19 (including as an early treatment of COVID-19 to control disease progression and limit virus spread); and the development, manufacturing and commercialization plans of the parties with respect to favipiravir. Wherever possible, words such as “may,” “would,” “could,” “should,” “will,” “anticipate,” “believe,” “plan,” “expect,” “intend,” “estimate,” “potential for” and similar expressions have been used to identify these forward-looking statements. Forward looking statements contained in this press release are provided in reliance on certain assumptions, including with respect to: securing final TSX approval for the Transaction in a timely manner; AiPharma’s ability to execute on its business strategy and enforce its contractual entitlements, including with respect to its ability access potential cash flows from the consortium sales of favipiravir, the timing of clinical results; securing all requisite required approvals and funding to complete all requisite clinical trials; other expectations and assumptions concerning the ongoing clinical trials (including with respect to the continuation and/or the timely completion of such trials and their potential outcomes and benefits); and the ability of the parties to successfully develop, manufacture and commercialize favipiravir for the treatment of COVID-19 following successful completion of the requisite clinical trials and receipt of all requisite regulatory and other approvals. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company cannot give assurance that these expectations will prove to have been correct.
Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, economic, competitive, political and social uncertainties; known and unknown risks and liabilities relating to the ongoing COVID-19 pandemic; the risk that the requisite conditions for final TSX approval for the Transaction cannot be satisfied on terms satisfactory to the parties or at all; risks relating to the failure of the parties to realize the anticipated benefits of this Transaction; risks relating to the volume of sales of favipiravir worldwide; risks relating to AiPharma’s ability to execute on its business strategy as currently contemplated and enforce its contractual entitlements, including with respect to the ability of AiPharma to access cash flows in connection with the sales of favipiravir by the consortium partners; risks relating to the inability of Appili to complete all requisite clinical trials (including risks relating to the outcome thereof) and to secure all required funding and approvals relating thereto; risks relating to the development, manufacturing and commercialization of favipiravir in Canada, the U.S and other jurisdictions; unforeseen events, developments, or factors causing any of the aforesaid expectations and assumptions not to be correct; and the other risk factors listed in the annual information form of the Company dated June 23, 2021 and the other filings made by the Company with the Canadian securities’ regulatory authorities (which may be viewed under the Company’s profile on SEDAR at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.
The Company is not making any express or implied claims that it has the ability to eliminate, cure or contain the COVID-19 (or SARS-2 Coronavirus) at this time.
Investor Relations Contacts
Stéphane Paquette; Senior Director, Corporate Development