After pulling the plug on a herpes vaccine program, San Diego-based Vical is set to merge with Colorado’s Brickell Biotech in an all-stock deal.
Upon closing, the combined company would operate as Brickell, focused on therapies for hyperhidrosis, cutaneous T-cell lymphoma, psoriasis and other skin conditions.
Under the deal, Brickell shareholders would own 60% of the company, while Vical shareholders would hold the rest.
“Following an extensive review of many strategic alternatives, we decided that the proposed merger with Brickell provides the best opportunity for Vical’s stockholders,” said Vijay B. Samant, president and CEO of Vical.
“We are optimistic that the strength of the Brickell executive leadership team, which has experience launching several drugs with other pharmaceutical companies, coupled with an innovative pipeline of new chemical entities for impactful skin diseases, will enable the combined company to reach significant value inflection points.”
The deal gives Vical shareholders Brickell’s late-stage program for axillary hyperhidrosis, which causes excessive sweating to the point of sweat soaking through clothes or dripping off hands.
Brickell’s development partner, Kaken Pharmaceutical, reported positive phase 3 clinical trial results in Japan, with additional clinical data due next year.
“We are optimistic that the strength of the Brickell executive leadership team, which has experience launching several drugs with other pharmaceutical companies, coupled with an innovative pipeline of new chemical entities for impactful skin diseases, will enable the combined company to reach significant value inflection points,” Samant said.
Back-to-back misses hurt Vical, including last year its herpes vaccine candidate that failed to meet its primary goal in a mid-stage clinical trial, or phase 2. Vical pulled the plug, and Samant at the time said attention would turn to its antifungal drug candidate, but the company in February decided to stop a clinical study.
The combined company has about $35 million in cash. In addition, NovaQuest Capital Management committed $25 million to fund Brickell’s near-term research and development.
“The strong closing balance sheet would allow Brickell to further develop our key pipeline assets for the treatment of other skin diseases,” said Robert B. Brown, CEO of Brickell, who will continue to lead the company along with other Brickell management.
The corporate headquarters will be Boulder, Colorado.
Brickell will trade on Nasdaq Capital Market under a yet-to-be determined ticker symbol. Its ownership split is based on a $60 million Brickell valuation and $40 million for Vical.
“We are excited about the opportunities created by this merger as we expect it to provide us with the funding to complete our two planned pivotal Phase 3 trials of sofpironium bromide in patients (with) axillary hyperhidrosis, with top-line data expected in Q4 2020,” Brown said.
Vical was founded in 1987.