As a result of this operation, Erytech will be able to explore a promising new medical field and contribute its resources to Pherecydes, including the not inconsiderable sum of €41 million, in order to consolidate and expand the latter’s portfolio of phage therapy products.
Established in Nantes in 2006, Pherecydes Pharma develops antibacterial treatments using bacteriophages, natural viruses capable of fighting antibiotic-resistant infections.
Listed on the Nasdaq and Euronext stock exchanges, Erytech is developing innovative therapies based on red blood cells to combat cancers and orphan diseases. Its proprietary platform, Erycaps®, makes it possible to encapsulate drugs inside red blood cells. The biotech company was established in Lyon in 2004. This is where the future company will move to, once the merger has been finalized.
In late June 2023, the resolutions to approve the operation will need to be confirmed by a vote by two thirds of the shareholders present or represented at the general meetings of each company. The Boards of Directors have already voted unanimously in favor. The new name and the new corporate image will be decided at these meetings, but it is already known that the CEO of Pherecydes, Thibaut du Fayet, is expected to become the CEO, and the CEO of Erytech, Gil Beyen, will be the Vice-President of the Board of Directors.
“Our Board of Directors fully supports this operation and is convinced that ERYTECH and PHERECYDES will bring together critical expertise and capabilities boosting our research programs, as well as an experienced and very complementary management team, and an international position that affords access to US investors and
stakeholders. All these advantages will also drive and accelerate PHERECYDES’ clinical development plan with controlled and randomized international trials to demonstrate clinical evidence of the phage therapy as a real game-changer in the anti-infectious area,”Thibaut du Fayet, CEO of Pherecydes.
“Erytech and Pherecydes are very complementary. The mergers will lead to an acceleration in the development of antibiotic resistance treatments in order to help patients, and at the same time provide a response to a global health issue and a major medical challenge. Phage therapy is a promising approach to target pathogenic bacteria such as S. aureus, E. coli and P. aeruginosa which, in aggregate, are responsible for over 800,000 resistant infections annually in the USA and Europe,” Gil Beyen, CEO of Erytech.
As soon as the planned merger was announced, the share prices of both companies rose. “That’s a good sign,” said Gil Beyen, CEO of Erytech. “It shows that the market considers this merger rational, in an area – antibiotic resistance – that has enormous unfulfilled needs.” Approximately 1.3 million people die every year around the world as a result of antibiotic resistance. It is estimated that this number will increase to 10 million by 2050.
With this operation, Erytech proves that it has recovered from the great disappointment it suffered in late 2021, following the failure of the phase III clinical trial being carried out on its candidate-drug, GRASPA, based on asparaginase encapsulated inside red blood cells, as the product was not potent enough to effectively treat pancreatic cancer. “It was a really difficult period but we immediately embarked upon a strategic search to ensure the future of Erytech, making the most of our expertise in clinical trials, our scientific staff and our cash resources,” notes Mr. Beyen.
The sale of the US production site in Princeton, New Jersey, not only allowed restructuring to take place, it also released $44 million for possible investment. After having spoken with around 50 biotech companies, the business finally decided upon Pherecydes. The two companies’ technologies present potential synergies and can be combined. Mr. Beyen believes that they will be able to “capitalize on (their) mutual skills to create a global leader”. On the one hand, Erytech is working in a promising medical field, and on the other, Pherecydes will have access to the financial resources it was missing, and the US market will be opened up to it, given that Erytech already has a presence there and is listed on the US stock market. Erytech’s 15 researchers are now wholeheartedly involved in research in a new medical field.
The 2023 and 2024 plans for the new entity are already extensive. Initially, the scope of the phase II PhagoDAIR study, in patients with knee or hip prosthetic joint infections due to Staphylococcus aureus, will be expanded via the opening of new clinical centers in Europe (results are expected in Q1 2024). This treatment could have early access to the market in 2026.
In addition to PhagoDAIR, two further phase II studies will be funded – one in patients with endocarditis due to S. aureus (to start in mid-2023), and the second in patients with complex urinary infections due to Escherichia coli (E. coli) (Q1 2024). The company expects to open clinical centers in the USA for both these studies.
At the same time, a smaller number of researchers will focus on studying the complementarities that exist between phage therapy and red blood cells, to potentially develop synergies between these two technologies. They will make use not only of Erytech’s platforms and expertise, in particular drug delivery with red blood cells (Erycaps) or red blood cell-derived vesicles (Erycev), but also of Pherecydes’ expertise in formulation and oncology, to support phage and endolysin therapeutic approaches in anti-infectives fields such as antibiotic resistance and beyond (including food, cosmetics and animal health, or the development of novel carriers).
Two new complementary phages will be added to the three that already exist in the Pherecydes portfolio (S. aureus, P. aeruginosa, E. Coli).