SAN DIEGO, Feb. 10, 2014 /PRNewswire/ -- Mast Therapeutics, Inc. (NYSE MKT: MSTX) today announced that it has entered into a definitive agreement to acquire Aires Pharmaceuticals, Inc. (Aires), a privately-held, clinical stage pharmaceutical company developing therapies to treat pulmonary vascular disorders such as pulmonary arterial hypertension and pulmonary hypertension due to heart failure. Aires' lead product, AIR001, is an intermittently nebulized formulation of nitrite and has orphan drug status with the U.S. Food and Drug Administration and the European Medicines Agency for the treatment of pulmonary arterial hypertension.
"The acquisition of Aires will enhance our pipeline with a phase 2 asset with more than 120 human subject exposures and which is a strategic complement to our lead program, MST-188. With total consideration of approximately 6% of Mast equity, it represents excellent value for our stockholders," stated Brian M. Culley, Chief Executive Officer of Mast Therapeutics, Inc.
"Nitrite has demonstrable beneficial properties, including vasodilation and the reduction of inflammation and undesirable cell growth. These are important therapeutic objectives and an ideal complement to MST-188 and its ability to improve blood flow and seal cellular membranes. In addition, we intend to investigate the hypothesis that AIR001 positively affects mitochondrial activity and myocyte energetics. With this acquisition, and the initiation of our phase 2 trial of MST-188 for the treatment of acute limb ischemia later this quarter, we are taking additional steps towards building a sustainable company with a valuable pipeline addressing significant unmet needs in both specialized and major markets," Mr. Culley continued.
"Another highlight of this acquisition is its favorable economics. Aires had completed several venture financings, including a $20 million Series B round. We are paying significantly less than that to acquire the program and we currently estimate that our development costs for AIR001 for the first 12 months will be approximately $2 million. Our estimated costs for AIR001 will change as we refine our development strategy over the next few months, but Aires is expected to contribute approximately $3 million of net cash at the closing of the merger, so, as currently contemplated, our first year of development of AIR001 will not require additional capital investment by Mast," Mr. Culley concluded.Under the terms of the all-stock transaction, Aires would become a wholly-owned subsidiary of Mast Therapeutics, Inc. in exchange for shares of Mast common stock representing approximately 6% of Mast's outstanding common stock, 80% of which would be subject to a six-month holdback for certain indemnification claims of Mast. There are no milestone obligations payable to Aires. The acquisition is expected to close in February 2014, subject to customary closing conditions. About AIR001AIR001 (sodium nitrite) inhalation solution, also known as Aironite®, is an intermittently nebulized formulation of nitrite. Under hypoxic conditions, AIR001 is converted to nitric oxide. Nitrite mediated nitric oxide formation has several beneficial effects, including dilation of blood vessels and reduction of inflammation and undesirable cell growth. AIR001 has been granted orphan drug status by the U.S. Food and Drug Administration and the European Medicines Agency for the treatment of pulmonary arterial hypertension.
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