Under the terms of the agreement, AVI will issue up to $7.5 million in AVI common stock valued at $1.3161 per share in exchange for all outstanding shares of Ercole stock not already owned by AVI. In addition, AVI will assume responsibility for up to $1.5 million in liabilities of Ercole, to be paid by a combination of cash and AVI stock. Liabilities in excess of $1.5 million will be deducted from the $7.5 million in common stock. The transaction is expected to close by March 21, 2008.
AVI and Ercole have collaborated since December 2006 to develop drug candidates including AVI-4658, which is in clinical testing in the UK for treatment of Duchenne muscular dystrophy.
Leslie Hudson, CEO of Avi, said: “The acquisition of Ercole is a major step toward Avi’s goal of becoming the preeminent developer of drugs that modify RNA splicing. Our acquisition of Ercole brings us significant scientific expertise and fundamental patents to help us reach this goal.”