Eight months after the failure of Vallon Pharmaceuticals’ only clinical asset sent the biotech on a hunt for an escape route, the floundering company’s story has come to an end thanks to an acquisition by GRI Bio.
Vallon first announced in April that it was open to a potential merger or acquisition as a way to stay afloat after dismal phase 1 results failed to show that its lead asset, ADAIR, was less addictive than dextroamphetamine for patients with ADHD. Virtually all the company’s chips had been pushed towards to ADAIR, with only one other asset, ADMIR, in the formulation stage.
Privately owned GRI Bio has clearly spotted an opportunity, snapping up publicly listed Vallon to assist in its bid to develop NKT cell regulators for the treatment of inflammatory, fibrotic and autoimmune diseases. The real win for GRI Bio may be that the merger will allow it to trade on the Nasdaq, where it will operate under the ticker symbol “GRI.”
Vallon’s investors clearly seemed satisfied with the announcement, initially sending the biotech’s stock soaring over 230% to 85 cents in premarket trading Wednesday.
The combined company will receive $15 million from investment firm Altium Capital with a further $10 million to follow in future funding. The proceeds will support the development of GRI Bio’s NKT development pipeline targeting multiple inflammatory, fibrotic and autoimmune indications into mid-2024 with an initial focus on idiopathic pulmonary fibrosis.
“We believe the proposed merger and financing will mark a transformational evolution for GRI Bio,” CEO Marc Hertz, Ph.D., said in a postmarket release Dec. 13. “We expect these transactions, including the additional Altium investment, to provide us with the necessary capital to propel GRI Bio forward in a meaningful way and to fund our planned operations into mid-2024, with the goal of realizing multiple catalytic clinical and regulatory milestones.”
GRI Bio has one asset already in the clinic in the form of GRI-0621, is a small-molecule RAR-βɣ dual agonist designed to inhibit the activity of type 1 NKT cells. A phase 2 study is planned in idiopathic pulmonary fibrosis with readout expected in 2024.
The La Jolla, California-based company’s only other asset is GRI-0621, a novel activator of type 2 NKT cells that is initially being targeted at systemic lupus erythematosus. GRI Bio expects the therapy to enter the clinic in 2024.