MORRISVILLE, NC – Oxygen Biotherapeutics, Inc., (NASDAQ:OXBT) a developer of oxygen-carrying therapeutics, today announced it has signed a Definitive Agreement (“Agreement”) to acquire certain assets of Phyxius Pharma, a privately-held biopharmaceutical company focused on the development and near-term commercialization of levosimendan to prevent and treat cardiac surgery patients at risk for developing low cardiac output syndrome (LCOS), a significant unmet medical need addressing an estimated $600 million market in the U.S. According to the terms of the Agreement, Oxygen Biotherapeutics will acquire the exclusive rights to develop and commercialize levosimendan in North America, as well as integrating three key Phyxius Pharma executives into the Company’s management team. The transaction is valued at approximately $4.8 million in stock as of October 18, 2013, based on Oxygen Biotherapeutics issuing an aggregate of approximately 3.4 million shares of its common stock and securities convertible into common stock to Phyxius Pharma’s stockholders in a private placement. Upon closing of the transaction, Phyxius Pharma Co-Founder and CEO, John Kelley is to become CEO of Oxygen Biotherapeutics.
“This acquisition and management transition is designed to offer us a tremendous opportunity to enhance shareholder value. We are thrilled that an industry veteran of Mr. Kelley’s stature will be taking the helm at Oxygen Biotherapeutics.”
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE MKT:LTS) acted as a financial advisor for the transaction.
“Upon closing of this transaction, Oxygen Biotherapeutics will be a Company that has a clear path to commercialization with a Phase 3 asset addressing a $600 million market. With Fast Track status and an agreed study protocol under theSpecial Protocol Assessment (SPA), we expect we are one trial away from approval,” said Michael Jebsen, Oxygen Biotherapeutics’ Interim CEO and CFO. “This acquisition and management transition is designed to offer us a tremendous opportunity to enhance shareholder value. We are thrilled that an industry veteran of Mr. Kelley’s stature will be taking the helm at Oxygen Biotherapeutics.”
Phyxius Pharma Co-Founder and CEO John Kelley commented, “We look forward to concluding this transaction and swiftly moving forward on our product development path. By bringing these specific levosimendan rights with an SPA and Fast Track status to Oxygen Biotherapeutics, we’re creating synergies by building a portfolio of indications for the acute care hospital setting. My team and I have spent much of our careers bringing products through the approval process, generating revenues and building value at other public pharmaceutical companies. We look forward to contributing here at Oxygen Biotherapeutics.”
Levosimendan is licensed from Finland-based Orion Corporation, a global healthcare company. The drug is currently approved in 53 countries to treatacute decompensated heart failure, a critical heart disease condition. This asset purchase Agreement brings to Oxygen Biotherapeutics not only the exclusive rights in North America to develop and commercialize levosimendan for the specific indication of prevention and treatment of LCOS, but also the FDA’s approval of Fast Track status for a Phase 3 trial, and the FDA’s SPA which represents agreement with the Phase III clinical trial’s study protocol. The FDA has provided guidance that a single successful trial will be sufficient to support approval of levosimendan in this indication.
According to the scientific literature, LCOS occurs in 5-10% of cardiac surgery patients, and can increase death after surgery by 14-fold. There is no drug currently approved for the prevention or treatment of LCOS. The Phase 3 clinical trial will study if levosimendan administered before and during surgery will reduce the incidence of LCOS and associated morbidity and mortality. There is substantial scientific evidence for the use of levosimendan in cardiovascular surgery, with over 25 published articles in peer reviewed journals and evidence of mortality reduction in some cardiac surgery trials of more than 50%.
Upon closing of the asset purchase, three key Phyxius Pharma executives and co-founders will join Oxygen Biotherapeutics. John Kelley is to become CEO of Oxygen Biotherapeutics. Mr. Kelley has 37 years of experience as a global pharmaceutical executive. He was formerly President, COO, and Director of NASDAQ-listed The Medicines Company, a provider of medical solutions to hospitals. Mr. Kelley currently serves on the Board of Directors of NASDAQ-listed Acorda Therapeutics. Michael Jebsen, Oxygen Biotherapeutics’ current Interim CEO and CFO, will remain serving as the CFO.
Also joining Oxygen Biotherapeutics are Doug Randall, who will serve as head of business and commercial operations. Mr. Randall is the former VP, Commercial Operations at The Medicines Company and was previously VP of Diabetes Marketing and VP of Primary Care Sales at Sanofi Aventis. Douglas Hay, PhD, will join as head of regulatory affairs. Dr. Hay was former VP of Global Regulatory Affairs at The Medicines Company and previously VP of Regulatory Roles at Shire and Bristol Myers Squibb. Initially, one director designated by Phyxius Pharma stockholders will be appointed to Oxygen Biotherapeutics’ Board of Directors, while another designee will be appointed to the Board following stockholder approval of the transaction.