Grifols buys a 35% stake in Aradigm to get drug rights to Ciproflaxin

|About: Grifols S.A. (GRFS)|By:, SA News Editor

Grifols (GRFS -0.9%) buys 35% of Aradigm (ARDM.OB) for $26M in a deal to develop Aradigm's formulations of inhaled ciproflaxin for the treatment of severe respiratory diseases.

GRFS will take on all development and clinical expenses of he drug, up to a maximum of $65M for the non-cystic fibrosis bronchiectasis indication. There is currently no drug specifically approved for the treatment of this condition.

In addition, ARDM.OB is entitled to receive cash payments of up to $25M upon achievement of development milestones.

ARDM.OB was awarded orphan drug designation for BE in the U.S., and has completed Phase IIb clinical trials with the inhaled ciproflaxin - Pulmaquin and LipoQuin.

Existing ARDM.OB shareholders, including Tavistock Life Sciences Company and accounts managed by First Eagle Investment Management and new investor Great Point Partners, co-invested in the stock purchase, buying an additional $15.4M in ARDM.OB stock.