Aileron Therapeutics, Inc. (NASDAQ: ALRN) acquired Lung Therapeutics, Inc., an Austin, Texas-based biopharmaceutical company focused on developing novel therapies for the treatment of orphan pulmonary and fibrosis indications that have no approved or limited effective treatments.
Immediately following the acquisition of Lung Tx, Aileron entered into a definitive agreement for the sale of shares of Aileron’s Series X non-voting convertible preferred stock and warrants to purchase shares of Aileron’s common stock in a private placement to a group of accredited investors. The private placement is expected to result in gross proceeds to Aileron of approximately $18 million before deducting placement agent fees and other offering expenses.
Immediately after the acquisition of Lung Tx, Aileron entered into a definitive agreement for a private placement with Lung Tx investors led by Bios Partners, and including Nantahala Capital, as well as additional undisclosed backers to raise approximately $18 million, including the conversion of certain convertible promissory notes in the aggregate principal amount of approximately $1.6 million issued by Lung Tx to Bios prior to the acquisition.
Aileron intends to use the proceeds from the private placement primarily to complete the ongoing Phase 1b clinical study of LTI-03, a Caveolin-1-related peptide in development for the treatment of IPF, and for general corporate purposes.
LTI-03 is a novel, Caveolin-1-related peptide with a dual mechanism targeting both alveolar epithelial cell (“AEC”) survival as well as inhibition of profibrotic signaling, whereas approved drugs for IPF such as nintedanib and treatments in clinical development for IPF have only demonstrated a reduction of profibrotic signaling.
Aileron will be led by its current management team consisting of Manuel C. Aivado, M.D., Ph.D, Chief Executive Officer, and Susan Drexler, M.B.A., C.P.A., Interim Chief Financial Officer, as well as Brian Windsor, Ph.D, former Chief Executive Officer of Lung Tx, who was appointed as President and Chief Operating Officer of Aileron. Dr. Windsor has 23 years of experience in the formation and execution of life science companies. He was the first employee of Lung Tx and led the company from 2013 to 2023. While at Lung Tx, Dr. Windsor spun out technology to form TFF Pharmaceuticals, which listed on Nasdaq in 2019. Prior to Lung Tx, he served as President of Enavail, a specialty pharmaceutical company. Dr. Windsor received both his B.S. and Ph.D. in molecular biology from the University of Texas at Austin.
Following the transaction, Aileron’s board members will include former members of the board of directors of Lung Tx, William C. Fairey and Alan A. Musso, and current Aileron board members Josef H. von Rickenbach, who will serve as Chairman of the Board of Directors, Manuel C. Aivado, M.D., Ph.D., Chief Executive Officer, Reinhard J. Ambros, Ph.D., and Nolan Sigal, M.D., Ph.D.
The acquisition of Lung Tx was structured as a stock-for-stock transaction whereby all of Lung Tx’s outstanding equity interests were exchanged in a merger for a combination of shares of Aileron common stock and shares of Aileron Series X preferred stock. Following the acquisition, Lung Tx became a wholly owned subsidiary of Aileron.
As of September 30, 2023, on a pro forma basis to give effect to the receipt of gross proceeds of the private placement, Aileron and Lung Tx’s combined cash and cash equivalents was approximately $29 million. Based on Aileron’s current operating plan, Aileron estimates that these cash resources will enable Aileron to fund its operating expenses and capital expenditure requirements as currently planned into the fourth quarter of 2024.
FinSMEs
31/10/2023