Axsome acquires Avenue's subsidiary for epilepsy drug development

Axsome Therapeutics (NASDAQ: AXSM) acquired Baergic Bio, a subsidiary of Avenue Therapeutics (OTC: ATXI), gaining global rights to BAER-101, an oral GABA receptor modulator originally licensed from AstraZeneca. The drug, to be renamed AXS-17, will be evaluated as a potential epilepsy treatment.

Under the acquisition terms, Baergic shareholders received $0.3 million upfront and are eligible for up to $82 million in development, regulatory, and sales milestones. Additional compensation includes tiered mid-to-high single-digit royalties on global net sales. Avenue expects to receive approximately 74% of future payments and royalties.

The milestone structure includes $2.5 million for the first indication's development and regulatory events, $1.5 million for each subsequent indication, and up to $79 million in sales-based milestones. Axsome obtained worldwide commercial, development, and manufacturing rights along with existing nonclinical and clinical data.

BAER-101 has been tested in clinical studies involving over 700 patients, according to the companies. The drug demonstrated effects in multiple preclinical seizure models, which forms the basis for Axsome's epilepsy development plans.

The transaction was completed through Axsome's acquisition of 100% equity interests in Baergic and a concurrent amendment to the license agreement between Baergic and AstraZeneca. Avenue Therapeutics focuses on developing therapies for neurologic diseases and was founded by Fortress Biotech (NASDAQ: FBIO).

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