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Millendo Therapeutics Goes Public With OvaScience Reverse Merger

Xconomy Detroit/Ann Arbor — 

[Corrected 2:30 p.m. See below.] Millendo Therapeutics, an Ann Arbor, MI-based biotech company developing drugs to treat endocrine diseases, is now a public company and has $30 million of new cash to continue work on its treatments for rare disorders.

Millendo announced this morning that it plans to merge with OvaScience (Nasdaq: OVAS), which was developing treatments focused on infertility and founded in 2013. The combined business will focus on Millendo’s treatments, however, and Millendo’s current shareholders will own 80 percent of the new business, which will be called Millendo Therapeutics and trade under the ticker MLND on the Nasdaq Capital Market. OvaScience shareholders will own the other 20 percent. Shares of OvaScience have traded below $1 each since March.

Along with the reverse merger—when a private company merges or purchases a public company, and subsequently begins trading on the public market—the combined business is set to receive $30 million from an investor syndicate that includes New Enterprise Associates, Frazier Healthcare Partners, Roche Venture Fund, Innobio managed by Bpifrance, Osage University Partners, Altitude Life Science Ventures, Adams Street Partners, and Longwood Fund. The company expects to have $70 million after the merger and financing, according to a news release.

Millendo plans to focus on the development of two drugs for rare diseases. One, livoletide (AZP-531), targets Prader-Willi syndrome, a condition that can cause an insatiable desire to eat and cause life-threatening obesity. It’s in Phase 2 development. Only human growth hormone has been approved for the condition, and it doesn’t stifle the hunger. Meanwhile, other drugs in development have either been shelved or delayed. Rhythm Pharmaceuticals isn’t planning a Phase 3 trial to follow up the completion of a Phase 2 study for its treatment for the condition, after the results showed it had only a modest effect on hyperphagia—the insatiable hunger—and patients experienced no weight loss, according to a securities filing. Boston-based Rhythm licensed another preclinical drug for the condition from Takeda. The company may study the new drug in combination with its old one, according to a spokesman. [Updated to correct that Rhythm licensed the drug from Takeda and to add additional context.]

Millendo is also studying a treatment it calls nevanimibe (ATR-101) in Phase 2 trials for two conditions related to the overproduction of steroids by the adrenal cortex. The drug aims to reduce the production. The company had been studying a non-hormonal therapy known as MLE4901 for the treatment of polycystic ovary syndrome, which can affect a woman’s hormone production and menstruation cycle, but it terminated the study in 2017 because the risk-benefit profile no longer indicated continued development, according to ClinicalTrials.gov