Full Press Release Details
Biosciences and C3J Therapeutics Agree to Merge
Transaction to result in NYSE American-listed
company focused on development of precisely-targeted bacteriophage therapeutics
Merger combines AmpliPhi's extensive
phage library and Phase 1/2-ready asset with C3J's expertise in synthetic phage and broad preclinical pipeline
$10 million to be invested by existing
C3J shareholders upon closing
The companies plan to hold a joint conference
call on Monday, January 14, 2019 at 4:30 pm ET
San Diego and Los Angeles, January 4,
2019 - AmpliPhi Biosciences Corporation ("AmpliPhi") (NYSE American: APHB), a clinical-stage biotechnology
company focused on the development of precisely targeted bacteriophage therapeutics for antibiotic-resistant infections, and C3J
Therapeutics, Inc. ("C3J"), a private clinical stage biotechnology company focused on the development of
novel targeted antimicrobials, today announced that the companies have entered into a definitive agreement under which a wholly
owned subsidiary of AmpliPhi will merge with C3J in an all-stock transaction, subject to shareholder approval. The consummation
of the merger transaction will result in a combined company that has a diverse clinical-stage pipeline, including a Phase 1/2-ready
natural phage candidate targeting bacteremia, as well as a synthetic phage candidate targeting respiratory infections poised to
enter Phase 1 development later this year. In addition, the combined company will have an extensive natural phage library and the
capability to develop synthetic phage against a wide range of microbial agents.
Certain existing C3J shareholders have
committed to invest $10 million in the combined company, subject to customary conditions. The financing will help fund the further
development of the combined company's preclinical and clinical programs and is expected to close immediately following with
the completion of the merger. The combined company's total cash balance following the closing of the merger and contemplated
financing is expected to be approximately $18 million.
"We are delighted with the prospect
of consummating this merger with AmpliPhi," said Todd R. Patrick, President and Chief Executive Officer of C3J. "We
believe the depth of knowledge that AmpliPhi has developed through human dosing of natural phage therapeutics complements C3J's
capabilities as a leader in the development of synthetic phage through its proprietary phage engineering platform. Synthetic phage
offers enhanced antimicrobial properties that improve pharmacology, limit the emergence of phage-resistant bacteria and create
potential opportunities for IP protection for best-in-class therapeutics. I believe this merger will create a leading company in
the development of targeted bacteriophage therapeutics at a time when key regulatory bodies, including the U.S. Food and Drug Administration
(FDA) and the World Health Organization (WHO) recognize the imminent threat posed by increased antimicrobial resistance."
Paul Grint, Chief Executive Officer of
AmpliPhi, remarked, "We are committed to advancing this new class of therapeutics, and this merger with C3J will combine
complementary assets and capabilities that we believe are in the best long-term interests of each company's shareholders
while addressing the significant unmet needs of patients struggling with multi-drug resistant bacterial infections."
About the Proposed Transaction
Under the terms of the merger agreement,
on a pro-forma basis and after closing of the merger but prior to the closing of the financing, the current C3J securityholders
will own approximately 70% of the combined company, while current AmpliPhi securityholders will own approximately 30% of the combined
company (on a fully diluted basis but using the treasury stock method and in each case excluding out of the money options and warrants).
The pre-financing ownership split was determined by the exchange ratio in the merger agreement, which was based on a $28 million
valuation for C3J and a $12 million valuation for AmpliPhi, a premium to the 30-day volume weighted average share price of AmpliPhi.
On a proforma basis, after giving effect to the contemplated $10 million financing, current C3J securityholders will own approximately
76% of the combined company and current AmpliPhi securityholders will own approximately 24% of the combined company (on a fully
diluted basis but using the treasury stock method and in each case excluding out of the money options and warrants).
The transaction has been unanimously approved
by the boards of directors of both companies, and is expected to close in the first quarter of 2019, subject to approval by AmpliPhi
shareholders. The transaction is also subject to customary conditions, including the execution of stock purchase agreements by
certain existing C3J shareholders who have agreed to invest an additional $10 million into the combined company, subject to customary
closing conditions. The investment is expected to close immediately following with the closing of the merger.
Mr. Patrick of C3J will be the Chief Executive
Officer of the combined company and Dr. Brian Varnum of C3J will be appointed President and Chief Development Officer. Steve Martin,
AmpliPhi's Chief Financial Officer, will continue to act as the CFO of the combined company. Dr. Grint has agreed to act
as a clinical consultant for the combined company. Prior to closing, AmpliPhi will seek stockholder approval to conduct a reverse
split of its outstanding shares to satisfy listing requirements of the NYSE American. The combined company is expected to trade
on the NYSE American under a new ticker symbol.
Ladenburg Thalmann & Co. Inc. is acting
as financial advisor to AmpliPhi and Cooley LLP is acting as legal counsel to AmpliPhi. LifeSci Capital LLC is acting as financial
advisor to C3J and Thompson Hine LLP is acting as legal counsel to C3J.
Conference Call Details
The companies plan to hold a joint conference
call on Monday, January 14, 2019 at 4:30 pm ET / 1:30 pm PT to discuss the merger details.
The dial-in number in the U.S./Canada is 1-866-652-5200; for
international participants, the number is 1-412-317-6060. For all callers, please refer to Conference ID 10127534.
Live webcast link: https://event.webcasts.com/starthere.jsp?ei=1226834&tp_key=f4991910f3
A replay of the conference call will be
available for seven business days beginning about two hours after the conclusion of the live call, by calling 1-877-344-7529 toll-free
(from U.S./Canada); 1-412-317-0088 (international callers). For all callers, please refer to Conference ID 10127534.
About AmpliPhi Biosciences
AmpliPhi Biosciences Corporation is a
clinical-stage biotechnology company focused on precisely targeted bacteriophage therapeutics for antibiotic-resistant infections
using its proprietary bacteriophage-based technology. AmpliPhi's lead product candidates, AB-SA01 and AB-PA01, target Staphylococcus
aureus and Pseudomonas aeruginosa, respectively, including multidrug-resistant strains, which are included on the WHO's
2017 Priority Pathogens List. Phage therapeutics are uniquely positioned to address the threat of antibiotic-resistance as they
can be precisely targeted to kill select bacteria, have a differentiated mechanism of action, can penetrate and disrupt biofilms
(a common bacterial defense mechanism against antibiotics), are potentially synergistic with antibiotics and have been shown to
restore antibiotic sensitivity to drug-resistant bacteria. For more information visit www.ampliphibio.com.
About C3J Therapeutics, Inc.
C3J Therapeutics is a clinical-stage biotechnology
company focused on improving human health through the development of novel targeted antimicrobials that treat infectious diseases
and address microbial dysbiosis associated with human disease. C3J Therapeutics is based in Los Angeles, California, with a 35,000
square foot facility housing R&D and manufacturing. C3J has a partnered synthetic bacteriophage program with a U.S. based
global pharmaceutical company. More information is available at www.c3jtherapeutics.com.
Important Information for Investors
This communication may be deemed to be
solicitation material in respect of the proposed transaction between AmpliPhi Biosciences Corporation and C3J Therapeutics, Inc.
In connection with the proposed transaction between AmpliPhi and C3J, AmpliPhi will file a proxy statement with the Securities
and Exchange Commission (the "SEC"). This communication is not a substitute for the proxy statement or any other documents
that AmpliPhi may file with the SEC or send to AmpliPhi shareholders in connection with the proposed transaction. Before making
any voting decision, investors and securityholders are urged to read the proxy statement and all other relevant documents filed
or that will be filed with the SEC in connection with the proposed transaction as they become available because they will contain
important information about the proposed transaction and related matters.
You may obtain free copies of the proxy
statement and all other documents filed or that will be filed with the SEC regarding the proposed transaction at the website maintained
by the SEC www.sec.gov. Once filed, the proxy statement will be available free of charge on AmpliPhi's website at www.ampliphibio.com
or by contacting AmpliPhi's Investor Relations by email at investor.ampliphibio.com or by phone at 858-829-0829 or by mail
at Investor Relations, AmpliPhi Biosciences Corporation, 3579 Valley Centre Drive, Suite 100, San Diego, CA 92130.
Participants in Solicitation
AmpliPhi, C3J and their respective directors and executive officers