Pulmatrix Inc. on Monday announced that it has entered into a binding term sheet with Cipla Technologies LLC, a subsidiary of Cipla Limited for the development and commercialization of Pulmazole treatment for allergic bronchopulmonary aspergillosis in asthma patients.
Following the announcement, Pulmatrix Inc. shares rocketed 81.89% on heavy volume to close the regular session at $2.31. Trading volume spiked to 57.8 million shares, compared with the full-day average of approximately 756,000 shares.
Under terms of the deal, Pulmatrix will receive an upfront payment of $22 million from Cipla in exchange for all rights of Pulmazole. Entry into a definitive agreement is contingent upon Pulmatrix raising additional funds from the market.
Pulmatrix will have the right to receive 50% of the free cash flow that Cipla will derive from future Pulmazole sales. Cipla will be responsible for commercialization while Pulmatrix will be primarily responsible for clinical development. Pulmazole is an inhaled antifungal formulation of itraconazole that is targeted at treating allergic bronchopulmonary aspergillosis (ABPA) in patients with asthma.
Allergic bronchopulmonary aspergillosis is a disease that occurs most often in people with cystic fibrosis or underlying asthma. An exaggerated allergic hypersensitivity response of the immune system to the fungus Aspergillus colonizing and developing in the airways often characterizes ABPA.
Pulmatrix said it believes that it will be in a position to complete the Phase II study of Pulmatrix once the two companies close the deal. The Phase II study is expected to begin in the second quarter of this year. Shares of nano cap Pulmatrix are down 44% on a year-over-year basis.
Pulmatrix CEO Comments
“With the FDA review of the IND complete, allowing us to proceed into ABPA patients, we are excited to take this important step forward in financing the Pulmazole program. In addition to securing a 50% commitment from Cip Tec for future Pulmazole development and commercialization costs, Cipla’s deep experience in respiratory drug development, device, manufacturing, and commercialization of Respiratory products should further strengthen the program,” said Robert W. Clarke, Chief Executive Officer of Pulmatrix.
“This important milestone brings us one step closer towards providing an improved novel therapeutic option to patients suffering from ABPA,” Clarke concluded.
Pulmatrix Inc. Profile
Pulmatrix Inc is a clinical stage biotechnology company. The company is focused on the discovery and development of novel inhaled therapeutic products intended to prevent and treat respiratory diseases and infections with significant unmet medical needs.
Pulmatrix designs and develops inhaled therapeutic products based on its proprietary dry powder delivery technology, iSPERSE (inhaled Small Particles Easily Respirable and Emitted), which enables delivery of small or large molecule drugs to the lungs by inhalation for local or systemic applications. The iSPERSE powders are engineered to be small, dense particles with dispersibility and delivery to airways.