Grifols, S.A. (MCE:GRF, MCE:GRF.P and NASDAQ:GRFS) (“Grifols”) and Aradigm Corporation (OTC BB:ARDM.OB) (“Aradigm”) today announced the closing of the transaction that includes the exclusive, worldwide license for Aradigm’s proprietary formulations of inhaled ciprofloxacin (Pulmaquin and Lipoquin®) for the treatment of severe respiratory diseases, including non-cystic fibrosis bronchiectasis (BE). Aradigm has completed Phase 2b clinical trials in BE patients with Pulmaquin and Lipoquin.
BE is a chronic condition that affects more than 110,000 people in the United States and many more in other countries and is characterized by abnormal dilatation of the bronchi and bronchioles associated with chronic respiratory infections. Aradigm has been granted orphan drug designation for BE in the U.S. and there is currently no drug specifically approved for the treatment of this condition.
Under the terms of the transaction:
- The parties have agreed to advance Aradigm’s proprietary inhaled ciprofloxacin formulations into Phase III clinical trials in BE.
- Grifols will be responsible for all development and clinical expenses up to a maximum of $65 million for the BE indication.
- Aradigm is entitled to receive cash payments of up to $25 million upon achievement of development milestones.
- Grifols is responsible for all commercialization activities and will pay Aradigm tiered royalties on worldwide sales of products utilizing Aradigm’s proprietary inhaled ciprofloxacin formulations.
- Grifols was granted an option to license Aradigm’s AERx ® pulmonary drug delivery platform for use with another molecule.
- In conjunction with the licensing agreement, Grifols acquired 35% of Aradigm’s common stock on a fully diluted basis at a price per share of $0.124 for a total investment of approximately $26 million.
- Existing Aradigm shareholders, including Tavistock Life Sciences Company and accounts managed by First Eagle Investment Management, LLC, and new investor Great Point Partners, LLC co-invested in the stock purchase transaction and purchased an additional approximately $15.4 million in Aradigm common stock. Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services (NYSE MKT:LTS) acted as placement agent for this transaction.
With the closing of the transaction Grifols is entitled to designate two directors to serve on the Aradigm Board of Directors.