Millendo plans to go public through OvaScience takeover, in push to complete late-stage R&D

Millendo Therapeutics plans to absorb the floundering, publicly traded fertility company OvaScience into its endocrine-based rare and orphan disease efforts.

As a result of the all-stock deal—technically a merger, with the new company being named Millendo Therapeutics and retaining its leadership—shares of the new Millendo will begin trading on the Nasdaq under the symbol MLND.

In addition, a group of investors have committed to provide $30 million in new funding to the company, either alongside or before shareholder approval of the merger. All told, the deal is expected to bring Millendo’s cash balance up to $70 million, to help carry it through late-phase clinical trials for its two lead candidates.

The syndicate of investors includes the Roche Venture Fund, New Enterprise Associates, Frazier Healthcare Partners, Osage University Partners, Altitude Life Science Ventures, Adams Street Partners, Longwood Fund and Innobio managed by Bpifrance. The merger has been approved by both companies’ boards of directors, and is expected to close before the end of the year.

The new company will focus on Millendo’s rare disease pipeline—earlier this year, the Waltham, Massachusetts-based OvaScience scaled back its R&D efforts into its fertility treatment that aimed to restore a woman’s egg production, following disappointing data from preclinical studies and canceled plans for a phase 1b/2a trial.

At the time, OvaScience said it decided to preserve resources and begin searching for a way to sell the company. Currently, the company’s stock is trading at $0.90, under OVAS. In early 2015, it traded as high as $50, with a company valuation over $1 billion.

Current OvaScience shareholders will own about 20% of the new, combined company, while Millendo’s investors will own about 80% before the additional $30 million in financing. It will be led by Millendo’s president and CEO, Julia Owens, Ph.D., and housed at Millendo’s current headquarters in Ann Arbor, Michigan.

"We are excited about the opportunities created by this merger, as it positions us to become a leader in rare endocrine diseases with the funding needed to pursue the potential approval and commercialization of our first-in-class programs," said Owens, who was named one of Fierce’s Women in Biopharma 2016.

Millendo expects to increase its current headcount of 25 employees, although that growth will be based solely on new hires over the coming months, Owens said in a conference call with investors.

The new company’s board of directors is expected to hold seven members, including current Millendo board members Owens, Carol Gallagher, Pharm. D., Mary Lynne Hedley, Ph.D., Jim Hindman, Carole Nuechterlein, J.D., and Randy Whitcomb, M.D., as well as current OvaScience board member John Howe, M.D.

"Our objective has always been to deliver meaningful therapies to patients who do not have sufficient treatment options, and with this merger, the compelling clinical data for our programs, and the initiations of late-stage trials for both livoletide and nevanimibe expected in the months ahead, we are optimistic that we can deliver on this vision," Owens said in a statement.

Livoletide, an unacylated ghrelin analogue, is being developed for Prader-Willi syndrome, a rare genetic disease characterized by unrelenting hunger leading to obesity and early mortality. Millendo is planning to launch a phase 2b/3 study in early 2019, following improvements in food-seeking behaviors in phase 2.

Meanwhile, its ACAT1 inhibitor nevanimibe showed positive proof-of-concept in an open-label phase 2 trial in classic congenital adrenal hyperplasia, and the company expects to advance it into a phase 2b study in the third quarter of this year. It is also being studied in endogenous Cushing’s Syndrome.

Regarding OvaScience's legacy assets, Millendo plans to evaluate options for the best path forward over the next few months, including selling or licensing its egg cell technology, Owens told FierceBiotech.

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