Just months after Tocagen faced a major trial setback that saw it lay off 65% of its workforce, the San Deigo-based biopharma has announced it will merge with dermatology specialist Forte Biosciences.
The newly merged company will operate under Forte’s name and will focus on the development of Forte’s lead asset FB-401, a biotherapeutic for the treatment of inflammatory skin diseases, including atopic dermatitis.
FB-401 is currently in a phase 1/2 trial in adults and paediatrics, where it demonstrated efficacy and a favourable safety and tolerability profile, with a further phase 2 trial set to begin in mid-2020 in adults and paediatrics with atopic dermatitis.
Under the terms of the deal, Tocagen stockholders are set to own 25.5% of the newly combined company, while Forte’s will own approximately 74.5%. The transaction, which has been approved by the board’s of both companies, is due to close in the second quarter of the year.
Tocagen’s shares soared on the back of the announcement – a positive turn after a rocky few months for the company. Last September, Tocagen’s lead drug candidate – Toca 511 and Toca FC – failed to meet all primary and secondary endpoints in high-grade glioma, an aggressive and hard-to-treat form of brain cancer.
The blow was devastating for the biopharma, which saw its stocks plummet to around 82% following the news. Tocagen had focused pretty much all its efforts on the development of the investigational candidate.
There was no mention as to the status of Tocagen’s remaining clinical studies of Toca 511 and Toca FC, which had been planned to go ahead in newly-diagnosed glioblastoma and non-muscle invasive bladder cancer.
A group of investors – Alger, BVF Partners and OrbiMed – will invest $14m in the combined company, which will bring its total cash balance to around $25m.
That money will advance the progress of FB-401, with no mention of Tocagen’s assets or programmes in the companies’ statement. The new company is set to be lead by Forte’s current CEO Paul Wagner, who said of the merger:
“We are excited about the opportunities created by this merger, as it positions us to become a global leader in inflammatory skin diseases with the funding needed to advance our pipeline towards regulatory approval and potential commercial launch.”
“Our team and advisors are committed to providing new treatment options, particularly for paediatrics with atopic dermatitis, for which few treatment options exist, and we look forward to delivering on this as we advance through development,” he added.