AzurRx BioPharma, Inc. announced that it will rename itself as “First Wave BioPharma, Inc.” after the acquisition of a small biotech company, First Wave Bio, Inc.

The company acquired First Wave Bio in a stock and cash transaction valued at $229 million, which also includes potential milestone payments. The acquisition will be completed through a reverse triangular merger, according to the terms of the agreement.

Per an Investopedia article, in a reverse triangular merger, the acquiring company creates a new subsidiary company that purchases the target company. After purchase, the subsidiary is then absorbed by the target company.

The company’s stock has plunged 48.5% so far this year in comparison with the industry’s 0.8% decline.

Image Source: Zacks Investment Research

Please note that First Wave Bio is a clinical-stage biotechnology company that specializes in the development of inflammatory bowel disease (“IBD”) therapies. It owns proprietary formulations of niclosamide - a small molecule drug that features anti-viral and anti-inflammatory properties designed to address multiple existing gastrointestinal (“GI”) conditions.

Per the company, the acquisition will not only expand its existing GI pipeline but also add new pipeline candidates for IBD. Following the acquisition, AzurRx’s pipeline will include three new treatments for IBD indications - ulcerative proctitis (UP) and ulcerative proctosigmoiditis (UPS), ulcerative colitis (UC), and Crohn’s disease (CD).

Following the name change, the company’s common stock will continue to trade in the NASDAQ under the ticker name “FWBI” effective Sep 23, 2021. Please note that there will be no change in its management team.

At the onset of 2021, AzurRx in-licensed exclusive global rights from First Wave Bio to develop two niclosamide therapeutic indications, one for COVID-19-related GI infections and another for immune checkpoint inhibitor-associated colitis and diarrhea in advanced-stage cancer patients.

Arena Pharmaceuticals  is also evaluating its most advanced candidate, etrasimod, in late-stage studies for UC and CD. Also, Theravance Biopharma (TBPH Quick QuoteTBPH - Free Report) /Johnson and Johnson’s (JNJ Quick QuoteJNJ - Free Report) izencitinib is being evaluated in UC and CD in separate clinical studies.

AZURRX BIOPHARM Price

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Zacks Rank

AzurRx currently carries a Zacks Rank #4 (Sell).

 You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.