Aerpio Pharmaceuticals, a biopharmaceutical company focused on advancing first-in-class treatments for ocular diseases, announced the successful completion of its reverse merger transaction with Aerpio Therapeutics and Aerpio Acquisition, a wholly owned subsidiary of the company. Following the reverse merger transaction, the company will continue the historical business of Aerpio.
The reverse merger transaction closed on March 15, 2017, pursuant to which Merger Sub merged with and into Aerpio, with Aerpio continuing as the surviving corporation. All outstanding capital stock of Aerpio was converted into shares of the Company’s common stock, and all outstanding options to purchase common stock of Aerpio have been converted into options to purchase shares of the Company’s common stock.
The Company also announced today the consummation of a private placement for gross proceeds of approximately $40.0 million for the issuance of an estimated 8.0 million shares of common stock at a purchase price of $5.00 per share. Net proceeds from the transaction will be used for clinical development activities, including advancement of Aerpio’s lead program, AKB-9778, for the treatment of diabetic retinopathy (DR).
Current investors of Aerpio participated in the offering, including Novartis Venture Fund, OrbiMed, Satter Investment Management, Kearny Venture Partners, Venture Investors, and Triathlon Medical Ventures. New institutional investors, Montrose Capital Partners and Ally-Bridge, also participated in the offering. Raymond James & Associates, National Securities Corporation, and Katalyst Securities acted as placement agents in the offering.
Following the completion of the reverse merger transaction and subsequent financing, the company’s Board of Directors is comprised of eight members. Previous members of Aerpio’s board of directors, including, Muneer Satter (Chairman); Joseph Gardner, PhD; Chau Khuong, PhD; Anupam Dalal, MD; and Paul Weiss, PhD, will remain on as Directors of the company. In addition, Caley Castelein, MD; Pravin Dugel, MD; and Steven Prelack have joined the company as Directors.
“Tie2 has steadily gained momentum as one of the most scientifically validated pathways for stabilizing vasculature and now stands at the forefront of new mechanisms being studied to treat retinal disease,” noted Joseph Gardner, President & CEO. “The potential of AKB-9778 for patients with DR is significant. Reversing the progression of diabetic eye disease, without repeated injections into the eye, could positively impact the lives of millions of people. The hard work and commitment of our team over the last year, in conjunction with this financing, will allow us to initiate our next study and bring us one step closer to realizing this vision.”
“The focus on DR provides a unique opportunity to transform the way diabetic eye disease is treated across the globe,” noted Dr. Pravin Dugel, a preeminent retina specialist and one of the Company’s newly elected Directors. “I’m excited to have the opportunity to be on the Aerpio team and proud to work on a potentially game-changing therapy for patients with no current treatment options.”
In the second quarter of 2017, the Company plans to initiate a 150-patient, double-masked, placebo-controlled, phase 2b trial of once- and twice-daily dosing of AKB-9778 for 12 months to evaluate the safety and efficacy of AKB-9778 in subjects with moderate to severe DR without diabetic macular edema.
The offering was exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder. The Common Stock in the offering was sold to “accredited investors,” as defined in Regulation D, and was conducted on a “reasonable best efforts” basis.