Adial on Thursday announced that it has bought privately held Azora Therapeutics.
- The main goal of the deal is to bring Azora’s lead drug candidate, called AT177, into Adial’s pipeline.
- Adial expects to begin the first human clinical trial for the experimental drug in mid-2027.
- The firm is also raising up to $64 million in total through private financing as part of the deal.
Shares of Adial Pharmaceuticals, Inc. (ADIL) jumped as much as 110% after the company announced the acquisition of privately held Azora Therapeutics, Inc., a biopharmaceutical company developing treatments for inflammatory diseases, in a transaction accompanied by up to $64 million in gross proceeds from a concurrent private placement financing.
The stock is now on track for its best day since September 2020, if gains hold.
The main goal of the deal is to bring Azora’s lead drug candidate, called AT177, into Adial’s pipeline. AT177 is an experimental once-daily pill designed to treat ulcerative colitis by working directly in the colon to reduce inflammation, while limiting effects on the rest of the body.
The drug is currently in the final stages of lab and animal testing needed before it can be tested in humans. Adial expects to begin the first human clinical trial in mid-2027.
The transaction marks a shift for Adial, which focuses on addiction treatments.
Terms Of The Deal
Under the deal, Azora’s shareholders will receive Adial stock. After the transaction closes, former Azora shareholders will own about 51% of the combined company, current Adial shareholders about 8%, and new investors putting money into the financing about 41%. The deal has already been approved by both companies’ boards and by Azora’s shareholders. Adial will still need approval from its own shareholders for certain parts of the deal, which it plans to seek soon.
Adial is also raising up to $64 million in total through private financing as part of the deal. Approximately $32 million will be invested immediately, while the remaining $32 million will be released once the company successfully begins its first human clinical trial of AT177. Proceeds will be used primarily to fund development of AT177 and initiate early-stage clinical studies, the company said.
How Did ADIL Retail Traders React?
On Stocktwits, retail sentiment around ADIL stock jumped from ‘neutral’ to ‘bearish’ over the past 24 hours, while message volume stayed at ‘normal’ levels.
A Stocktwits user termed the news “perfect” and expressed optimism for the stock rallying on Friday as well.
Another, however, expressed doubts about the deal.
According to data from Koyfin, both analysts covering ADIL rate it ‘Buy’ or higher. The stock has a 12-month average price target of $25, which represents a potential upside of over 1000% from the stock’s last close.
ADIL stock has fallen 39% over the year.
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