Windtree Acquires Early-Stage, Novel Oncology Platform and Completes $1.5 Million Convertible Note Bridge Financing
- Acquisition of novel protein kinase inhibitor assets from Varian Biopharmaceuticals, Inc.
- Completion of $1.5 million convertible note bridge financing
- Issuance of 5,500 shares of Series B Convertible Preferred Stock to Varian's creditor investors
- Potential milestone payments of up to $2.3 million for regulatory and clinical development achievements
- Promising pre-clinical data on the acquired protein kinase inhibitor targeting aPKCi
- None.
Insights
Windtree Therapeutics' acquisition of Varian Biopharmaceuticals' assets, including the aPKCi, represents a strategic move into the oncology space, which has seen increasing interest due to the high unmet medical needs and potential for significant revenue generation. The aPKCi, targeting the Protein Kinase C iota isozyme, could offer a new approach to tackling various cancers, particularly if it shows high specificity and effectiveness in both monotherapy and combination therapy settings.
From a research perspective, the pre-clinical data showing dose-dependent modulation of cell viability and pathway activity is promising. However, the clinical success of these compounds is far from guaranteed, as the transition from pre-clinical to clinical efficacy is a major hurdle for oncology therapeutics. The potential for milestone payments upon achieving regulatory and clinical milestones indicates a performance-based investment strategy but also reflects the inherent risks of drug development.
The focus on both rare and prevalent tumor types could allow Windtree to tap into niche markets while also addressing larger patient populations. The topical formulation VAR-101 could be particularly interesting for skin cancers, where localized treatment is advantageous.
The issuance of 5,500 shares of Series B Convertible Preferred Stock and the $1.5 million convertible note bridge financing are critical elements of this transaction that could have significant implications for current and future investors. The initial conversion price set for these securities, with a floor price, offers insight into the company's valuation expectations and safeguards against excessive dilution.
The 10% annual dividend on the Preferred Shares is a substantial commitment and reflects the risk profile associated with the investment. Investors will need to closely monitor the progress of the asset's development to assess whether the potential returns justify the risks and costs.
Windtree's plan to use the proceeds for general corporate purposes suggests a need for capital to support ongoing operations and development programs. The stipulation to seek stockholder approval for the issuance of common stock upon conversion aligns with Nasdaq regulations and provides a measure of corporate governance. Overall, the financial structure of this deal will require careful analysis to determine its impact on the company's balance sheet and future funding requirements.
Entering the oncology drug market can be transformative for a biopharmaceutical company like Windtree. Oncology is one of the most lucrative segments in the pharmaceutical industry due to the high cost of cancer drugs and the growing incidence of the disease globally. The acquisition of aPKCi, with its potential broad use in oncology, positions Windtree to potentially capture a share of this market.
However, market success is contingent upon the successful development and approval of the drug, which is a lengthy and uncertain process. The company's strategy to partner its SERCA2a activator platform could provide additional financial support and risk-sharing. The mention of a stronger balance sheet and leveraging experience to grow the business indicates an awareness of the competitive landscape and the need for strategic partnerships and financial prudence in the biotech sector.
Investors and analysts will be watching closely for updates on licensing activities and strategic partnerships, as these can significantly affect the company's market position and financial health.
WARRINGTON, Pa., April 08, 2024 (GLOBE NEWSWIRE) -- Windtree Therapeutics, Inc. (“Windtree” or the “Company”) (NasdaqCM: WINT), today announced that on April 2, 2024 the Company entered into an asset purchase agreement with Varian Biopharmaceuticals, Inc. (“Varian”) to acquire certain of its assets, including a proprietary atypical protein kinase C iota inhibitor (aPKCi). The Company also completed a
The acquired Varian asset platform is a novel, potential high-potency, specific, aPKCi with possible broad use in oncology as well as certain rare malignant diseases. The asset platform includes two formulations: VAR-101 (topical) and VAR-102 (oral).
In consideration of the purchase of the Varian assets, on April 2, 2024, the Company issued to certain of Varian’s creditor investors a total of 5,500 shares of Series B Convertible Preferred Stock, par value
Protein kinase inhibitors are a class of anti-cancer therapeutics that have made a significant impact on the treatment of cancers. Among the kinase targets for further development are the Protein Kinase C (“PKC”) family, which are key components of many signaling pathways that drive the formation of cancer. aPKCi is a promising atypical PKC iota isozyme with defined oncogenic role in multiple signaling pathways, and in the initiation and development of multiple tumor types. GLI-1 is a transcription factor at the terminal end of the Hedgehog (Hh) signaling pathway, and many other important pathways, including RAS-RAF, TGFb, and P14K-AKT-mTOR. In many tumor types, high levels of GLI-1 expression is a negative prognostic marker. Pre-clinical data of the acquired platform showed dose dependent modulation of basal cell carcinoma cell viability and GLI-1 pathway modulation in vitro, as well as dose dependent anti-tumor activity in xenograft mouse models of non-small cell lung cancer and pancreatic ductal carcinoma. The protein kinase inhibitor adds to Windtree’s product candidate portfolio of novel pre-clinical and late-stage clinical product candidates and development programs, including SERCA2a activators and programs in out-licensed partnership.
“Completion of the Varian asset acquisition and the bridge financing represents a potentially transformative next step for Windtree. Adding an innovative protein kinase inhibitor that has what we believe is an exciting pre-clinical data package with two formulations in development to our existing portfolio of product candidates creates an additional opportunity for value creation as we advance and look to partner our late and early-stage SERCA2a activator platform, including istaroxime,” said Craig Fraser, Chief Executive Officer of Windtree. “We see potential application in both rare and more prevalent tumor types, both in monotherapy and in combination with other agents. We believe there will be options for targeted disease selection and differentiation due to the potential for high specificity and topical formulation to treat various skin cancers. In the weeks to come, I look forward to providing updates on the use of this newly acquired capital and plans for our portfolio and programs, including licensing activity for istaroxime and our SERCA2a activators as well as our company strategy to have a stronger balance sheet and opportunities to further leverage our experience to grow the business.”
In addition to the asset purchase, on April 2, 2024, the Company entered into a securities purchase agreement with certain investors whereby the Company agreed to sell to such investors
The Company agreed to seek stockholder approval for the issuance of all of the Company’s common stock issuable upon conversion of the Notes and the Preferred Shares in accordance with the rules and regulations of the Nasdaq Stock Market.
Additional details are available by reading the Company’s Current Report on Form 8-K relating to the Varian asset acquisition and senior convertible note bridge financing, which was filed with the Securities and Exchange Commission on April 8, 2024.
About Istaroxime
Istaroxime is a first-in-class dual-mechanism therapy designed to improve both systolic and diastolic cardiac function. Istaroxime is a positive inotropic agent that increases myocardial contractility through inhibition of Na+/K+- ATPase with a complimentary mechanism that facilitates myocardial relaxation through activation of the SERCA2a calcium pump on the sarcoplasmic reticulum enhancing calcium reuptake from the cytoplasm. Data from multiple Phase 2 studies in patients with early cardiogenic shock or acute decompensated heart failure demonstrate that istaroxime infused intravenously significantly improves cardiac function and blood pressure without increasing heart rate or the incidence of cardiac rhythm disturbances.
About Pure SERCA2a Activators
These compounds activate SERCA2a and Windtree Therapeutics' research and development program is evaluating these preclinical product candidates, including oral and intravenous SERCA2a activator heart failure compounds.
About Windtree Therapeutics, Inc.
Windtree Therapeutics, Inc. is a biotechnology company focused on advancing early and late-stage innovative therapies for critical conditions and diseases. Windtree’s portfolio of product candidates includes istaroxime, a Phase II candidate with SERCA2a activating properties for acute heart failure and associated cardiogenic shock, pre-clinical SERCA2a activators for heart failure and VAR-101 and VAR-102, pre-clinical precision aPKCi inhibitors that are being developed for potential in rare and broad oncology applications. Windtree also has a licensing business model with partnership out-licenses currently in place.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The Company may, in some cases, use terms such as "predicts," "believes," "potential," "proposed," "continue," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "will," "should" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements are based on information available to the Company as of the date of this press release and are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from the Company’s current expectations. Examples of such risks and uncertainties include: the Company’s ability to secure significant additional capital as and when needed; the Company’s ability to obtain approval for the issuance of all of the Company’s common stock issuable upon conversion of the Notes and the Preferred Shares; risks and uncertainties associated with the success and advancement of the clinical development programs for istaroxime and the Company’s other product candidates, including pre-clinical candidates such as VAR-101 and VAR-102; the Company’s ability to access the debt or equity markets; the Company’s ability to manage costs and execute on its operational and budget plans; the results, cost and timing of the Company’s clinical development programs, including any delays to such clinical trials relating to enrollment or site initiation; risks related to technology transfers to contract manufacturers and manufacturing development activities; delays encountered by the Company, contract manufacturers or suppliers in manufacturing drug products, drug substances, and other materials on a timely basis and in sufficient amounts; risks relating to rigorous regulatory requirements, including that: (i) the U.S. Food and Drug Administration or other regulatory authorities may not agree with the Company on matters raised during regulatory reviews, may require significant additional activities, or may not accept or may withhold or delay consideration of applications, or may not approve or may limit approval of the Company’s product candidates, and (ii) changes in the national or international political and regulatory environment may make it more difficult to gain regulatory approvals and risks related to the Company’s efforts to maintain and protect the patents and licenses related to its product candidates; risks that the Company may never realize the value of its intangible assets and have to incur future impairment charges; risks related to the size and growth potential of the markets for the Company’s product candidates, and the Company’s ability to service those markets; the Company’s ability to develop sales and marketing capabilities, whether alone or with potential future collaborators; the rate and degree of market acceptance of the Company’s product candidates, if approved; the economic and social consequences of the COVID-19 pandemic and the impacts of political unrest, including as a result of geopolitical tension, including the conflict between Russia and Ukraine, the People’s Republic of China and the Republic of China (Taiwan), and the evolving events in Israel and Gaza, and any sanctions, export controls or other restrictive actions that may be imposed by the United States and/or other countries which could have an adverse impact on the Company’s operations, including through disruption in supply chain or access to potential international clinical trial sites, and through disruption, instability and volatility in the global markets, which could have an adverse impact on the Company’s ability to access the capital markets. These and other risks are described in the Company’s periodic reports, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission and available at www.sec.gov. Any forward-looking statements that the Company makes in this press release speak only as of the date of this press release. The Company assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.
Contact Information:
Eric Curtis
ecurtis@windtreetx.com
FAQ
What assets did Windtree Therapeutics acquire from Varian Biopharmaceuticals, Inc.?
How much convertible note bridge financing did Windtree complete?
What are the two formulations included in the acquired asset platform?
How many shares of Series B Convertible Preferred Stock did Windtree issue?
What type of milestone payments may Windtree pay for the acquired assets?
Which protein kinase family does the acquired inhibitor target?
What type of data was shown in pre-clinical studies for the acquired platform?
What are Windtree's plans for the acquired assets?
