Grifols has struck a deal to buy assets from bankrupt antibiotic developer Aradigm. The agreement sees Grifols waive a $32 million debt and pay $3 million in cash to take full ownership of three assets.
California-based Aradigm hit the skids in 2018 when the FDA knocked back a filing for approval of inhaled antibiotic ciprofloxacin and asked the biotech to run a two-year phase 3 trial before trying again. Grifols helped Aradigm reach that point, funding late-phase development in non-cystic fibrosis bronchiectasis, taking a 48% stake in the biotech and making a $20 million convertible notes buy.
Support for Aradigm dried up after its setback at the FDA, leading the company to file for bankruptcy one year ago. The filing led to a hunt for people interested in buying Aradigm’s assets. By November, Grifols had submitted an asset purchase agreement but other companies remained in the race.
Late last week, Aradigm revealed Grifols had held off the competition and landed a deal to buy three assets. The assets are two formulations of inhaled ciprofloxacin, branded Apulmiq and Lipoquin, and a free form of the antibiotic. Aradigm tested the inhaled formulations as a treatment for non-cystic fibrosis bronchiectasis and as a way to manage infections in patients with cystic fibrosis.
Barcelona-based Grifols picked up the assets by making a small cash payment and waiving a larger amount of debt. The lion’s share of the debt appears to relate to the $20 million convertible note purchase Grifols made in 2016.
Grifols secured the worldwide rights to Apulmiq, then known as Pulmaquin, in 2013. The latest deal gives Grifols the chance to take Apulmiq forward and limits its ongoing obligations to Aradigm to $2 million payments for FDA approvals, $1 million for European Medicines Agency nods and time-limited royalties of 25%.
Having generated revenues of €4.5 billion last year, Grifols has the financial muscle needed to gather data to persuade regulators on both sides of the Atlantic to change their positions on Apulmiq, which is known as Linhaliq in Europe. However, Grifols is yet to state its plans for the acquired assets.
The deal does at least create the possibility that the assets have a future. Aradigm presented mixed data on Apulmiq, with one success and one failure against the primary endpoints in identical phase 3 trials, but advocates for the drug argued it addresses a critical unmet medical need.