First Wave BioPharma, Inc. FWBI shares are skyrocketing Wednesday after the company entered a non-binding term sheet to sell its Niclosamide program for the treatment of inflammatory bowel diseases, or IBD.
The IBD program that treats ulcerative colitis and related conditions was sold to an undisclosed biopharmaceutical company, the company said in a press release.
The non-binding term sheet includes a "low seven-figure upfront payment" to First Wave BioPharma for rights to Niclosamide, as well as economics related to future milestones and royalties.
The proposed transaction will enable First Wave BioPharma to focus its development resources on its three late-stage clinical programs: Capeserod (a selective 5-HT4 receptor partial agonist licensed from Sanofi SNY), Adrulipase (a recombinant lipase enzyme for the treatment of exocrine pancreatic insufficiency) and, Latiglutenase (a Phase 3-ready oral biotherapeutic for celiac disease).
"We plan to rapidly advance these programs in 2024 given the significant potential of each to address GI conditions for which no effective therapies currently exist," said James Sapirstein, President and CEO of First Wave BioPharma.
Niclosamide is a prescription, non-systemic, small-molecule drug listed as an essential medicine by the World Health Organization (WHO). Niclosamide was approved by the U.S. Food and Drug Administration (FDA) in 1982 for the treatment of intestinal tapeworm infections and has been safely used on millions of patients.
"We made the strategic decision to streamline our development pipeline and are pleased to have entered a non-binding term sheet for Niclosamide, which has the potential to infuse First Wave with additional, non-dilutive capital," Sapirstein added.
The transaction is expected to close in the first half of 2024.
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Price Action: FWBI shares are trading higher by 143% to $8.950 premarket on the last check Wednesday.
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