Eirion Therapeutics Closes $40M Series A Investment and Licensing Deal with Shanghai Haohai Biological Technology
Eirion Therapeutics is an aesthetic dermatology company headquartered in Woburn, Massachusetts with a pipeline focusing on treatments for wrinkles, primary axillary hyperhidrosis, androgenic alopecia, and hair greying.
Eirion Therapeutics, Inc. closed a $40 million Series A investment and licensing deal with Shanghai Haohai Biological Technology Ltd.
The deal will result in a $32 million Series A Preferred Stock investment into Eirion along with exclusive licenses that will be for all of Eirion's products for the territory of China in exchange for an upfront payment in the amount of $8 million. The deal is structured in segments over the next approximately 18 months.
Eirion Therapeutics, Inc. is an aesthetic dermatology company headquartered in Woburn, Massachusetts with a pipeline focusing on treatments for wrinkles, primary axillary hyperhidrosis, androgenic alopecia, and hair greying, and Haohai is a leading Chinese aesthetic medicine company headquartered in Shanghai and is publicly traded on the Hong Kong (6826.HK) and Shanghai (688366.SS) stock exchanges. Haohai's dermal filler products include Hyalumatrix, Matrifill and Janlane.
"This transaction allows Haohai to bring Eirion's very innovative product candidates into China. As a leading aesthetic company with products ranging from dermal fillers to electro-optic equipment in China, Eirion's highly complementary products have the potential to catapult Haohai to becoming a dominant player in Chinese aesthetic field," says Haohai's Chairman Dr. Yongtai Hou in a news release.
Haohai is investing $31 million and a US investor is co-investing $1 million in Eirion that in aggregate will obtain a minority stake in the company. Eirion has been funded previously through approximately $11 million of convertible notes which will convert into Series A Preferred Stock in connection with Haohai's investment.
"We are thrilled to partner with Haohai, an established aesthetics leader in China, a country poised to become the largest aesthetic market in the world. Together, we look forward to accelerating innovation in the global marketplace," adds Jon Edelson, MD, Eirion's Chairman, CEO, and President.
The companies have signed two product licenses that have the potential in aggregate to provide Eirion approximately $43 million in development fees, $444 million in sales milestones, with product royalty rates ranging from high single digits to the low twenties. One license is for Eirion's neuromodulator-based product candidates, ET-01 (topical) and AI-09 (injectable) for aesthetic indications; and a second license is for Eirion's small molecule product candidates, ET-02 (topical) and ET-03 (oral), which are intended for the treatment of hair loss and hair greying.
Under the terms of the licenses, the products will be manufactured in the US by Eirion and developed and commercialized by Haohai in China.
"This transaction gives Eirion an even greater platform and set of resources to realize and expand the opportunities that they have identified," says Kenneth Beer, MD, a clinical investigator and dermatologist in private practice in Florida.
Eirion has invented a proprietary approach to topical neuromodulator treatment: before the application of the topical neuromodulator, the skin will be pre-conditioned by a device that will create temporary micropores that aid in the absorption of the neuromodulator into the skin. The topical neuromodulator itself employs a patented nanoemulsion delivery system. The treatment in total is intended to avoid the pain and potential bleeding, bruising and needle misplacement that can associated with the current hypodermic needle administration used for all commercial neuromodulators today.
Eirion's lead product ET-01 is a Phase 2 topical neuromodulator product candidate being developed for the treatment of lateral canthal lines and primary axillary hyperhidrosis. In its Phase 2 clinical trials to date using its drug-device combination, Eirion has observed the potential for ET-01 to treat wrinkles, with results that are statistically significant, showing improvements measured at muscular contraction when the crow's feet wrinkles appear at their worst on the face. Eirion has also observed promising effects and duration of effects of a single application of ET-01 in the physician's office when compared to the effects of a single injection observed in published studies of a commercially available neuromodulator. Eirion plans to begin a Phase 2b study this year to further study the efficacy and safety of ET-01.
Eirion is also developing a next generation ready-to-use liquid injectable neuromodulator product called AI-09 for the treatment of glabellar lines. Eventually, AI-09 may be developed for other aesthetic and medical indications. AI-09 will be provided as a ready-to-use, liquid formulation, which contrasts favorably to currently commercialized neuromodulator products that all require reconstitution with saline in the physician's office before use. As well, in contrast to current injectable products, AI-09 does not contain human albumin, which carries a risk of disease transmission.
Both ET-01 and AI-09 have been shown to be stable at room temperature for at least 3 months, which is also an advantage over current products that require shipping to and storage at the physician's office in frozen conditions. Eirion plans to file an IND for AI-09 later this year.
Eirion's pre-clinical product candidates ET-02 and ET-03, which contain the same small molecule, employ a brand-new mechanism of action which corrects an aging defect in the hair follicle stem cells that Eirion has discovered causes androgenic alopecia (and hair greying. Eirion believes that ET-02 and ET-03 can either prevent the defect from occurring or reverse the defect which would result in either new hair growth in those who have lost hair or the return of hair color for those how have turned grey.
In controlled non-clinical studies of human scalp tissue affected by androgenic alopecia, ET-02 demonstrated approximately twice the hair growth compared to a control treatment over approximately 4 months, which was statistically significant, and amounted to approximately three times the hair growth per centimeter over that which was observed in minoxidil clinical trials that were 12 months in duration. Eirion plans to launch its first clinical trial of ET-02 next year.