The number of biotech companies completing an IPO has swelled this year and Adynxx aims to join their ranks—but through an alternate path. The pain drug developer has agreed to combine operations with publicly traded Alliqua Biomedical.
Under the merger agreement announced Friday, shares of Adynxx will convert into Alliqua (NASDAQ: ALQA) stock, leaving former Adynxx shareholders owning approximately 86 percent of the combined company. That company will have the Adynxx name and will be led by the current Adynnx management team. It will be headquartered in San Francisco, where Adynxx is currently based.
Adynxx develop drugs intended to serve as alternatives to addictive opioid painkillers. The company’s drugs block proteins that control genes associated with pain. Adynxx’s lead drug candidate, brivoligide, targets a protein called EGR1. It has been tested as a treatment for pain following knee-replacement surgery.
The Adynxx drug failed a Phase 2 study in April. But at the time, the company announced that a subset of patients treated with its drug recovered faster. Based on those results, Adynnx said it would continue clinical development of the drug. The company now says it is planning two Phase 2 studies, one in knee surgery patients and another in patients who have received a mastectomy.
Langhorne, PA-based Alliqua is a regenerative medicine company that developed and sold wound care products. But Alliqua struggled financially, finishing 2017 with a $25.7 million net loss and just $2.2 million in cash. Those finances prompted a warning from Alliqua’s accounting firm that the company might not be able to continue operating, according to its annual report.
The boards of directors of Adynxx and Alliqua have approved the merger. The deal still needs approval from the shareholders of both companies. The companies expect to close the transaction by the first quarter of 2019.