Aptevo Therapeutics Inc (APVO) Completes Sale of Its Hyperimmune Commercial Assets, Grateful for the Continued Support from MidCap Financial; Shares Rose 11%


Investors snapped up shares of Aptevo Therapeutics Inc (NASDAQ:APVO) after-hours, after the biotech firm announced that it has completed the sale of three of its marketed products (WinRho® SDF, HepaGam B®, and VARIZIG®) to Saol Therapeutics for total consideration of up to $74.5 million.

In addition, the company announced that it has amended the terms of a credit agreement initially executed with MidCap Financial Trust in August 2016. The amendment allows Aptevo to retain this $20 million funding tranche, for which repayment was anticipated coincident with the sale transaction of Aptevo’s hyperimmune commercial assets.  As part of the amendment, the companies have agreed to eliminate the option for a second tranche of $15 million.

As of this writing, Aptevo Therapeutics shares are up nearly 11% to $2.40. APVO has a 1-year high of $3 and a 1-year low of $1.15. The stock’s 50-day moving average is $1.76 and its 200-day moving average is $1.93.

Under the terms of a purchase agreement between Aptevo and Saol, Saol has acquired three hyperimmune products previously marketed by Aptevo: WinRho SDF for autoimmune platelet disorder and hemolytic disease of the newborn; HepaGam B for the prevention of Hepatitis B following liver transplantation and for treatment following hepatitis B exposure; and VARIZIG for treatment following exposure to varicella zoster virus for individuals with compromised immune systems.

The transaction is valued at up to $74.5 million, including an upfront payment of $65 million ($3.25 million of which was placed in an escrow account), and an additional potential milestone payment of up to $7.5 million related to the achievement of gross profit milestones.  In addition, Aptevo may receive up to $2 million related to the collection of certain accounts receivable.

Aptevo CEO Marvin L. White stated, “The sale of our hyperimmune products is a transformative event for Aptevo that positions us well for future value creation by strengthening our financial position and sharpening our focus on our most promising commercial and pipeline assets […] I am very excited about the future of Aptevo for good reason. We are in the enviable position of having a commercial product (IXINITY®) with growth potential; a robust, leading-edge protein therapeutic platform technology (ADAPTIR™) targeting immuno-oncology and autoimmune diseases; multiple novel bispecific antibody candidates advancing in clinical and preclinical development; and finally, a wholly-owned portfolio of assets with the optionality to potentially generate value from these assets through future corporate partnerships.  I feel very good about the hand we are holding, and the opportunities ahead for Aptevo and our stockholders.”

“Our core technology – the ADAPTIR platform, is among a new class of targeted, antibody-based therapeutics that hold promise for the treatment of cancer and other chronic diseases through the simultaneous targeting of two or more distinct epitopes, activating and engaging the immune system to fight cancer, or, in some cases, suppressing the immune response to decrease inflammation.  With bispecifics gaining increasing momentum as a promising new class of “off-the-shelf” engineered therapeutics, Aptevo is now better capitalized and positioned to advance our bispecific pipeline and build value for our stockholders.  We are excited about the unique features of our technology platform, and with second generation ADAPTIR candidates heading towards the clinic, the opportunity to establish Aptevo as a premier company focused on the next generation of antibody-mediated therapeutics for the treatment of cancer and autoimmune diseases,” White concluded.

Aptevo CFO Jeff Lamothe commented, “We are pleased to continue our relationship with MidCap Financial […] They are a knowledgeable partner who understands the life sciences sector and we appreciate their continued interest in and commitment to our business.  Since our inception, we have sought to ensure that Aptevo is solidly capitalized to invest in the opportunities where we see the most potential for long-term value creation for our stockholders – namely by advancing a pipeline of innovative bispecific therapeutic antibodies derived from our proprietary ADAPTIR® platform and continuing to expand market share for our IXINITY®Hemophilia B commercial product.  With MidCap’s continued support, we have extended our cash runway to further these goals.”

Aptevo Therapeutics, Inc. focuses on novel oncology and hematology therapeutics to meaningfully improve patient’s lives. It also products in the areas of hematology and infectious diseases, as well as various investigational stage product candidates in immune-oncology.