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.
Grifols (GRFS -1.6%) says that Aradigm (ARDM.OB) has received shareholder approval for its license agreement giving GRFS access to Aradigm's proprietary formulations of inhaled ciprofloxacin, which is used for the treatment of severe respiratory diseases, including non-cystic fibrosis bronchiectasis. In conjunction with the licensing agreement, GRFS will acquire 35% of Aradigm's common stock at a price per share of $0.124 for a total investment of approximately $26M.