EXCLUSIVE: eFFECTOR, Locust Walk Acquisition CEOs On SPAC Deal, Drug Pipeline

Clinical-stage biopharmaceutical company eFFECTOR Therapeutics is set to go public via the special purpose acquisition company Locust Walk Acquisition Corp LWAC with an enterprise value of $419 million.

Steve Worland, the president and CEO of eFFECTOR, and Chris Ehrlich, CEO of Locust Walk Acquisition Corp., appeared on Benzinga's YouTube show "SPACs Attack" for an exclusive interview Wednesday.

eFFECTOR Programs: eFFECTOR focuses on using a new class of oncology drugs known as selective translation regulation inhibitors to treat cancer.

eFFECTOR has a global partnership with Pfizer Inc PFE for the development of inhibitors of eIF4E, which is the company's earliest stage program, Worland told Benzinga.

Tomivosertib, which targets non-small cell lung cancer, is in late-stage Phase 2 trials and is the furthest along of eFFECTOR's programs, he said, adding that its other asset, Zotatifin, has shown effectiveness against COVID-19 and is close to completing Phase 1 trials.

eFFECTOR is prepared to take its programs all the way to market without the help of other companies, but the company is open to partnerships that make sense for its strategic plan, Worland said.

Generating Value: eFFECTOR has a lot of opportunities for leverage through its multiple assets, and strategic partnerships will likely be an important part of generating value, Ehrlich told Benzinga.

Each asset that eFFECTOR has can be used as a platform to potentially treat multiple types of tumors, he said, adding that such potential increases the value of the programs. 

The company's assets, the intellectual property protecting the assets and the positive feedback from the FDA should create a clear path for "real value creation in the short-term," Ehrlich added.

SPAC Deal Notes: eFFECTOR looked at the traditional IPO route, but ultimately decided to go public via a SPAC because of the SPAC route's shorter time frame to market, increased deal certainty and the expertise that Ehrlich could bring to the company's board, Worland told Benzinga.

The merger is expected to be completed in the third quarter of 2021. Pending shareholder approval, the combined company will be named eFFECTOR Therapeutics and is expected to be listed on Nasdaq under the ticker symbol “EFTR." 

After the SPAC merger is completed, the company expects to have over $200 million in cash.

Related Link: EXCLUSIVE: eFFECTOR Therapeutics Announces SPAC Deal To Advance Cancer-Fighting Pipeline

LWAC Price Action: Locust Walk Acquisition Corp has traded as high as $10.05 and as low as $9.55 since its IPO in January.

At last check Wednesday, the stock was flat at $9.98.