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Avalance Biotechnologies Tumbles 14% Following Acquisition Announcement

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Shares of Avalanche Biotechnologies Inc (NASDAQ: AAVL) plunged to a new 52-week low of $5.07 on Monday and was trading lower by more than 14 percent.

Avalanche, a clinical-stage biotechnology company, announced before Monday's open it has entered into a definite agreement to acquire Annapurna Therapeutics, a privately held biopharmaceutical company for approximately 17.6 million newly issued shares of Avalanche's common stock.

Avalanche shareholders will own 62.5 percent of the newly formed entity while Annapurna's investors will own 37.5 percent of the combined company. The new company's stock will continue trading on the NASDAQ exchange under the symbol "AAVL."

Avalanche noted that the combined entity's pipeline will consist of its existing ophthalmic programs and four new gene therapy based programs which are focused on Alpha1-antitrypsin (A1AT) deficiency, cardiomyopathy associated with Friedreich's ataxia, hereditary angioedema and severe allergies.

The company also added that as of December 31, 2015, it holds $258 million in cash which is expected to be sufficient to fund the combined company's programs for at least the next 36 months.

"This transaction creates the opportunity to build a leading gene therapy company with an extensive pipeline and significant scientific, financial and human resources," said Paul B. Cleveland, president and chief executive officer of Avalanche. "I have tremendous respect for Annapurna's commitment to high level research and development and we are looking forward to working together to drive our combined current programs forward. At the same time, we are seeking to expand our pipeline further through additional licenses and acquisitions that complement our expertise in vector development and optimization platforms, process development and manufacturing."

 

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Posted-In: Annapurna Biotechnologies Avalanche Biotechnologies Clinical Stage Biotechnology CompaniesBiotech M&A News Movers General

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