Cambridge - Acacia Pharma Group plc ('Acacia Pharma', the 'Company', the 'Group'), (EURONEXT: ACPH), a pharmaceutical company developing and commercialising hospital products for US and international markets, announces it has entered into a strategic in-licensing transaction with Cosmo Pharmaceuticals N.V. (SIX: COPN) ('Cosmo').

The transaction grants to the Group exclusive US commercialisation rights to ByFavo (remimazolam) and has been made alongside an equity investment and debt facility by Cosmo to finance the marketing efforts of both BARHEMSYS and ByFavo.

Mike Bolinder, CEO of Acacia Pharma, said: 'We are delighted to have in-licensed ByFavo, which provides an excellent complementary product opportunity to BARHEMSYS. Having a second product that shares the same calling points and attractive commercial message as BARHEMSYS will make the investment in our sales and marketing teams more efficient and will allow us to deliver better treatment options for physicians and patients. The equity investment from Cosmo is a great validation of Acacia Pharma and strengthens our balance sheet as we move towards the PDUFA date for BARHEMSYS, which is targeted for 26 February 2020. The availability of debt finance is also important as it will allow us to invest in the anticipated launch and commercialisation of BARHEMSYS and ByFavo. I am sure we have found in Cosmo the right partner for our future expansion.'

Alessandro Della Cha, CEO of Cosmo, said: 'It took us more than six months of hard work to find the best possible US partner for ByFavo, following the same pattern as that of the RedHill transaction. We came to the conclusion that ByFavo, as much as Aemcolo, can better and faster achieve its sales potential within an organisation with significant commercial expertise and multiple products in the same market. If approved, both ByFavo and BARHEMSYS will share not only the same calling points but also the same compelling commercial message of reducing procedure and hospitalisation time. The deal gives Acacia Pharma the necessary means to boost its business focused on hospital and ambulatory surgical centre sales in the US and provides critical financing to accelerate its growth. This transaction is therefore consistent with our strategy to bundle our products into small and focussed companies in which we can have substantial equity stakes to participate in the potential growth in value. I am very satisfied by this synergy and I trust Acacia Pharma, with the help of Cosmo, will deliver the right reward both to its shareholders and to Paion as licensor, of which Cosmo also holds a major stake.'

About the transaction

Under the principal terms of the in-license agreement, Cosmo will be eligible for: an upfront payment of EUR10 million from Acacia Pharma to be satisfied through the issue of 4,646,841 new ordinary shares of 2p in Acacia Pharma at EUR2.152 per share, being the 15-day volume weighted average share price up to 8 January 2020 a EUR30 million payment from Acacia Pharma upon US approval of ByFavo, consisting of EUR15 million payable in cash and EUR15 million payable in cash or new ordinary shares at Acacia Pharma's option a EUR5 million payment upon first commercial sale of ByFavo in the US payable in cash or new ordinary shares at Acacia Pharma's option sales-related milestones of up to EUR105 million upon achieving pre-specified annual sales targets, and tiered double-digit royalties on US sales.

Under the terms of the agreement, Cosmo has also made a strategic equity investment in Acacia Pharma of EUR10 million by agreeing to subscribe for 4,347,826 new ordinary shares of 2p in Acacia Pharma at a price of EUR2.30 per share, based on the closing price on 8 January 2020. Following this investment, together with the shares issued in respect of the licensing agreement, Cosmo will own 8,994,667 ordinary shares of 2p in Acacia Pharma, representing 14.08% of its enlarged share capital.

In addition, Cosmo will make available to Acacia Pharma a new loan facility of up to EUR35 million, conditional on the achievement of certain specified milestones and in two tranches: EUR10 million will become available on the US approval of BARHEMSYS, and EUR25 million will become available upon the US approval of ByFavo.

The loans will be interest-only until January 2023 and repayable over the ensuing 24 months. Until such time as the group's existing loan facility with Hercules Growth Capital is repaid in full, the Cosmo facility will be unsecured and bear interest at 11% per annum. Thereafter, the loan will be secured upon assets of the Group and bear interest at 9%.

Cosmo will be entitled to appoint one director to the Acacia Pharma Board of Directors.

The transaction will not require shareholder consents.

About ByFavo (remimazalom)

ByFavo is an ultra-short-acting and reversible intravenous benzodiazepine sedative/anaesthetic designed for use during invasive medical procedures, such as during colonoscopy and bronchoscopy. Approximately 24.5 million such procedures take place annually in the US, of which around 90% use moderate sedation.

ByFavo has demonstrated efficacy and safety in an extensive clinical trial programme involving around 2,400 volunteers and patients. Data so far indicate that remimazolam has a rapid onset and offset of action combined with a good cardio-respiratory safety profile. ByFavo is designed to act more quickly than the available alternatives of the same pharmaceutical class for the same indication (e.g. midazolam) and can be reversed with flumazenil to rapidly terminate sedation or anaesthesia if necessary.

Cosmo in-licensed the US rights to ByFavo from Paion AG in 2016 and together they have progressed the product candidate through to registration. The NDA for ByFavo, was submitted to the US FDA in April 2019 and has a target review (PDUFA) date of 5 April 2020.

Contact:

Mike Bolinder

Tel: +44 1223 919760

About Acacia Pharma

Acacia Pharma is a hospital pharmaceutical company focused on the development and commercialization of new nausea & vomiting treatments for surgical and cancer patients. The Group has identified important and commercially attractive unmet needs in nausea & vomiting and has discovered two product candidates based on the same active ingredient, amisulpride, to meet those needs.

The Group's lead project, BARHEMSYS (intravenous amisulpride) for post-operative nausea & vomiting (PONV), has generated positive results in four Phase 3 clinical studies. Its sister project, APD403 for chemotherapy induced nausea & vomiting (CINV), has successfully completed one proof-of-concept and one Phase 2 dose-ranging study in patients receiving highly emetogenic chemotherapy.

Acacia Pharma is based in Cambridge, UK and Indianapolis, IN. The Company is listed on the Euronext Brussels exchange under the under ISIN code GB00BYWF9Y76 and ticker symbol ACPH.

About Cosmo Pharmaceuticals

Cosmo is a specialty pharmaceutical company focused in treating selected Gastrointestinal Disorders and Endoscopy. The Company's proprietary clinical development pipeline specifically addresses innovative treatments for IBD, Colonic Infections and detection of colonic lesions. Cosmo has also developed medical devices for endoscopy and has recently entered into a partnership with Medtronic for the global distribution of its novel Artificial Intelligence device to be used in coloscopies and GI procedures.

Forward looking statement

This announcement includes forward-looking statements, which are based on current expectations and projections about future events. These statements may include, without limitation, any statements preceded by, followed by or including words such as 'believe', 'expect', 'intend', 'may', 'plan', 'will', 'should', 'could' and other words and terms of similar meaning or the negative thereof. Forward-looking statements may and often do differ materially from actual results. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, prospectus, growth or strategies and the industry in which it operates. Save as required by law or applicable regulation, the Company and its affiliates expressly disclaim any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise. Forward-looking statements speak only as of the date they are made.

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