On June 2, 2021 Sorrento Therapeutics, Inc. (Nasdaq: SRNE, "Sorrento") reported that it has completed the acquisition of ACEA Therapeutics Inc. ("ACEA") (Press release, Sorrento Therapeutics, JUN 2, 2021, View Source [SID1234583395]).
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The merger was completed on June 1, 2021 and at such time, ACEA became a wholly owned subsidiary of Sorrento. The total value of the consideration payable to the holders of securities of ACEA in the merger was $38,000,000, subject to certain adjustments for interest expenses, indebtedness, transaction expenses and cash. In total, 5,519,469 shares of Sorrento common stock were issued at closing in satisfaction of certain outstanding indebtedness of ACEA. In addition to the foregoing consideration, and subject to the achievement of certain clinical and sales milestones (as described below), Sorrento will pay the ACEA equity holders (i) up to $450,000,000 in additional payments, subject to the receipt of certain regulatory approvals and achievement of certain net sales targets with respect to the assets acquired in the merger and (ii) with respect to specified royalty-bearing products, five to ten percent of the annual net sales thereof, in each case in accordance with the terms of an earn-out agreement. The amount referenced in clause (i) of the preceding sentence includes the amounts that would have otherwise been due to ACEA under that certain License Agreement, dated July 13, 2020, which agreement terminated in its entirety at the effective time of the merger.
"This is a value-inflection acquisition for Sorrento as we bring in multiple NCE drug product candidates, including the previously licensed Abivertinib as an anchoring small molecule drug product for treating many different cancers and autoimmune diseases," said Henry Ji, Ph.D., Chairman and Chief Executive Officer of Sorrento. "With broad-spectrum and synergistic infrastructures and expertise in pharmaceutical and biological drug discovery, development and manufacturing, and expanded geographic coverage in China and North America, we envision Sorrento becoming a leading biopharmaceutical company to develop and commercialize innovative medicines that will save and improve lives globally."
"With perfectly aligned missions, ACEA and Sorrento are both committed to developing innovative drugs and providing therapeutic solutions for unmet medical needs. The successful integration of ACEA small molecule drug pipelines to Sorrento large molecule and cell therapy platforms will significantly strengthen and facilitate the innovative drug development in the field of cancer and autoimmune diseases," said Xiao Xu, M.D, President of ACEA Therapeutics.