An experimental head injury drug took Edge Therapeutics all the way to the public markets. But one failed clinical trial later and the company is now heading for the exits.
Edge (NASDAQ: EDGE) this morning announced plans to merge with a privately held company, PDS Biotechnology of North Brunswick, NJ, that is developing a group of cancer immunotherapies. PDS stockholders will get 70 percent of the combined company through the deal, with Edge backers owning the remaining 30 percent. The combined company will be called PDS Biotechnology.
Edge shares bumped up about 40 percent, to $0.99 apiece, in pre-market trading Monday.
The move comes roughly eight months after Edge reported that its lead drug, a treatment for the delayed effects of severe head injuries, failed a Phase 3 trial. Edge was able to raise enough cash to go public on the promise of the drug, known as EG-1962. But since EG-1962 failed, Edge restructured, cut jobs, and ran a strategic review that led to the PDS deal. The agreement, known as a reverse merger, is a tool commonly used by struggling biotechs to recoup some value for shareholders. (For private companies like PDS, meanwhile, reverse mergers are a much quicker and less costly way to go public than running an IPO.)
PDS is one of a slew of companies developing drugs meant to prime the immune system to recognize and attack cancers. Its lead cancer immunotherapy, PDS0101, is being tested against a variety of cancers—among them cervical, anal, and head and neck—caused by human papilloma virus, or HPV. PDS plans to start multiple late-stage studies of PDS0101 in HPV-associated cancers.
PDS co-founder and CEO Frank Bedu-Addo will run the combined company, with Edge chief Brian Leuthner serving as president.