Kitov Pharma recently contracted an arrangement to acquire FameWave Ltd. for a share exchange transaction. FameWave shareholders will receive $10M worth of newly issued KTOV ADSs (U.S. Listing) at $1.23 per share. Kitov was able to receive $3.5M in investments from notable funds such as Orbimed, Pontifax, and Arkin Holdings for this acquisition. Each of these funds is expected own about 10% of KTOV priced at $1.23 a share. The Company has also stated that they are “currently in discussions with a number of leading healthcare-focused institutional investors, which have expressed interest in investing in Kitov following completion of the acquisition.”
According to the press release, FameWave is developing CM-24, a monoclonal antibody that focuses on the immune checkpoint CEACAM1. In a Phase I dose-ranging study, CM-24 did not display any efficacy signals and the judgment was to suspend development. Kitov hired external advisors to review the data and their valuation was that CM-24 was considered “generally safe”, which now allows Kitov to attempt higher doses with the intention of reaching a “receptor saturation” point. In the press release, the company stated that it had already expected to close a deal with big pharma and to start a Phase I/II study in the first part of 2020 to gauge the safety and efficacy of CM-24 in combination with a PD-L1 inhibitor.
Kitov CEO, Isaac Israel said, “Combining this transaction with our proprietary NT219 program, Kitov will become a clinical stage oncology company backed by the support of leading global life science funds. With the NT219 and CM-24 oncology candidates, we are opening an exciting future for Kitov and I’m looking forward to building on this momentum. We are very pleased that the investment and support of three leading global life science funds will enable Kitov to advance our clinical programs and expand our institutional investor base. The acquisition of CM-24 is a tremendous opportunity for Kitov and our shareholders. We believe CM-24 has the potential to treat recurrent and advanced stage cancers including ovarian, colorectal, melanoma, lung, bladder and gastric cancers, and that our Phase I/II trial design could result in a strong display of the drug’s efficacy to the benefit of patients and their families. The journey Kitov started with Consensi™’s FDA approval and our recently announced distribution partnership for Consensi™ in the US, when combined with our plans to submit an IND for NT-219 in 2019 and the acquisition of CM-24, transforms Kitov into a robust immune-oncology development company.”
The FameWave acquisition is another transformational move for Kitov for a few reasons. First, the company is acquiring a novel checkpoint agent that has the potential to treat advanced-stage cancer in a variety of oncology indications. Second, Kitov officially has another product candidate in the clinic while we wait for NT-219’s IND. Third, Kitov is now officially an oncology company. Although Consensi is currently the company’s flagship product, the addition of CM-24 to the portfolio tips the scale towards the oncology arena.
An overlooked fact is that the company was able to bring in notable life science firms/funds with the acquisition of FameWave. This should be seen as a major development for Kitov because “smart money” wanted to invest millions of dollars at $1.23 per share. With each one of these firms owning 10% of Kitov, we can infer that they see a huge value in CM-24 and were willing to buy shares and not just loan some money. Now, their investment is determined on the performance of the stock, which should tell you that they expect KTOV to perform quite well in the future. Furthermore, with a large percentage of shares being acquired at $1.23, we can use that as a potential buy area.
Bristol-Myers Squibb Partnership
On April 12th, FameWave announced the signing of a clinical collaboration with Bristol-Myers Squibb to evaluate the combination of CM-24 and Opdivo with NSCLC. FameWave and Bristol-Myers Squibb will collaborate on the trial design in a distinct NSCLC population. FameWave will fund and sponsor the study, while Bristol Myers Squibb will be responsible for the supply of Opdivo.