Avenue Therapeutics announces Baergic Bio acquisition by Axsome

Avenue Therapeutics (ATXI) subsidiary, Baergic Bio announced that Avenue has entered into an agreement for Baergic to be acquired by Axsome Therapeutics (AXSM), including the global rights to BAER-101, a novel oral GABAA alpha subtype-selective receptor positive allosteric modulator. BAER-101 was originally licensed by Baergic from AstraZeneca (AZN) and will be referred to as AXS-17 by Axsome going forward. Axsome intends to evaluate AXS-17 as a potential treatment for epilepsy. Axsome will receive worldwide commercial, development, and manufacturing rights to BAER-101, including all available nonclinical and clinical data. The transaction was effectuated through Axsome’s acquisition of 100% of the equity interests in Baergic, a subsidiary of Avenue, and concurrent amendment to the License Agreement between Baergic and AstraZeneca. Under the terms of the purchase agreement, Baergic Bio shareholders will receive a $0.3 million upfront payment (less transaction expenses) and are eligible to receive milestone payments of up to $2.5 million upon the occurrence of certain development and regulatory events for the first indication and $1.5 million for each indication thereafter, up to $79 million in potential sales-based milestones, and a tiered mid-to-high single-digit royalty on potential global net sales of AXS-17. Avenue expects to receive ~74% of all future payments and royalties payable under the agreement.