What’s Driving M&A Deal Activity?

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April 30, 2024

Michael Smith, Managing Director at STS Capital Partners, Nicholas Rodriguez, Partner at Winston & Strawn, and Jim Cassel, Co-Founder & Chairman of Cassel Salpeter & Co., join Jill Malandrino on Nasdaq TradeTalks to discuss what’s driving M&A deal activity, despite a challenging economic environment and high interest rates?

 

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5 Cell and Gene Therapy Decisions to Watch in 2024

By Ana Mulero
April 22, 2024

In 2023, cell and gene therapy saw an unprecedented surge with seven FDA approvals, and this year, an even greater number of these treatments could reach the market. So far in 2024, the regulator has given the green light to three new CGTs, and at least seven additional cell and gene therapy products are expected to receive approval by year’s end, according to a March report from the Alliance for Regenerative Medicine.

“All signs point to 2024 surpassing 2023 as a landmark year for cell and gene therapy,” David Barrett, CEO of the American Society of Gene & Cell Therapy (ASGCT), told BioSpace.

The first approval this year belonged to Vertex Pharmaceuticals and CRISPR Therapeutics’ Casgevy, which won the FDA’s nod in January for use in transfusion-dependent beta thalassemia. This followed the agency’s December 2023 approval of Casgevy as one of the first two cell-based gene therapies to treat patients with sickle cell disease. It also represented the first FDA approval of a therapy using CRISPR/Cas9 technology. Then, in February, Iovance Biotherapeutics’ Amtagvi was approved as the first one-time cell therapy for a solid tumor and the first tumor-infiltrating lymphocytes therapy, for advanced melanoma patients who have worsened after being treated with certain other therapies failed. Finally, last month, the FDA greenlit Orchard Therapeutics’ Lenmeldy, which entered the U.S. market as the first gene therapy for children with metachromatic leukodystrophy, and the world’s most expensive drug, with a $4.25 million price tag. 

Looking forward, the FDA has upcoming PDUFA dates for several more novel CGTs, including a traditional in vivo gene therapy delivered via viral vector, a couple of gene-corrected cell therapies in which a patient’s cells are modified by gene therapy outside of the body and then reinfused, and a new CAR-T.

Two Q1 reports, from ASGCT and the Alliance for Regenerative Medicine, highlight some of these regulatory actions as potential catalysts for the sector, with approvals poised to propel the CGT space. The ASGCT report includes a list of noteworthy events in Q1 2024, while ARM’s report makes the case that 2024 could be a banner year for cell therapy.

Here, BioSpace reviews five products under regulatory review that were highlighted by both organizations.

Pfizer’s Beqvez

Indication: Hemophilia B

Therapy type: In vivo gene therapy

Action date: April 27

Later this month, the FDA will rule on Pfizer’s gene therapy for hemophilia B, Beqvez. This engineered version of the factor IX coagulation gene carried by an adeno-associated virus is administered via a single infusion.

Beqvez has been approved by Health Canada to treat adults with hemophilia B based on positive data from the Phase III BENEGENE-2 study, which showed a significant reduction in bleeding rate and infusion frequency.

The Big Picture

An FDA approval would put Pfizer in competition with CSL Behring, whose gene therapy Hemgenix, which is also administered via a single intravenous infusion, became the first FDA-approved gene therapy for hemophilia B in November 2022. Pricing details for Beqvez are not yet available, but Hemgenix costs $3.5 million per dose. Chris Boshoff, Pfizer’s chief oncology officer, told BioSpace the company aims to leverage its experience to ensure smooth market entry and efficient delivery to eligible patients.

Abeona Therapeutics’ pz-cel

Indication: Recessive dystrophic epidermolysis bullosa

Therapy type: Gene-corrected cell therapy

Action date: May 25

Next up is Abeona Therapeutics’ pz-cel, which delivers a functional collagen-producing COL7A1 gene into a patient’s own skin cells using a retroviral vector, for the treatment of patients with recessive dystrophic epidermolysis bullosa (RDEB). RDEB, a rare connective tissue disorder, causes severe skin wounds, pain and life-threatening complications stemming from compromised immunity due to a deficiency in the COL7A1 gene, preventing the production of functional type VII collagen.

In November 2023, the FDA granted priority review to pz-cel based on clinical data from the Phase III VIITAL study and long-term results from a Phase I/IIa study, which demonstrated sustained wound healing and pain reduction.

The Big Picture

Ira Leiderman, managing director of healthcare at Cassel Salpeter, underscored the importance of evaluating therapeutic options against the rarity and impact of the disease. A positive decision on Abeona’s pz-cel will help address the high unmet need of RDEB patients and may lead to transformative interventions in this challenging rare genetic disorder, Leiderman told BioSpace.

If approved, pz-cel would follow Krystal Biotech’s Vyjuvek, the first gene therapy approved for recessive or dominant DEB in May 2023. Abeona said in March it is actively preparing for the potential U.S. launch of pz-cel, including discussions with treatment sites and payer engagement.

Rocket Pharmaceuticals’ Kresladi

Indication: Leukocyte adhesion deficiency-1

Therapy type: Ex-vivo vector gene therapy

Action date: June 30

While Rocket Pharmaceuticals initially anticipated a decision on its gene therapy for leukocyte adhesion deficiency-I (LAD-I) by March, the FDA requested more review time and extended the deadline to June 30.

Severe LAD-I, a rare genetic disorder affecting children, is caused by mutations in the ITGB2 gene that lead to life-threatening infections. Without regular bone marrow transplants, survival beyond childhood is rare. Kresladi contains patient-derived hematopoietic stem cells genetically modified with a lentiviral vector to carry functional copies of the ITGB2 gene, crucial for leukocyte adhesion and infection-fighting.

In November 2023, the FDA accepted Rocket’s BLA for Kresladi with priority review, following positive efficacy and safety data from a global Phase I/II study, in which all nine LAD-I patients were alive 12 to 24 months post-infusion. Significant reductions in infection rates were observed compared to pre-treatment levels, along with the resolution of LAD-I–related skin lesions and restoration of wound healing capabilities.

Kresladi also holds the FDA’s Regenerative Medicine Advanced Therapy, Rare Pediatric, Fast Track and Orphan Drug designations.

The Big Picture

This marks Rocket’s inaugural product filing and is a notable advancement for patients, offering an alternative to bone marrow transplant, which carries significant risks and may not be readily accessible. Rocket is enhancing its commercial infrastructure in preparation for a potential product launch, including center initiation, channel strategies, education and payer engagement.

Rocket CEO Gaurav Shah told BioSpace the FDA is reallocating reviewers to focus on rare diseases and complex biologics, necessitating changes and a transition period. Shah noted that the delayed decision, based on the FDA’s request for clarity on chemistry, manufacturing and controls information submitted by Rocket, is common among CGTs and does not raise significant concerns beyond ensuring the regulator has sufficient resources for the approval process.

Adaptimmune’s afami-cel

Indication: Advanced synovial sarcoma

Therapy type: T cell receptor therapy

Action date: August 4

 

Adaptimmune is gearing up for the potential launch of its inaugural product in the sarcoma franchise, afami-cel, intended for treating advanced synovial sarcoma, with a PDUFA date set for August 4. Afami-cel received FDA priority review in January.

Synovial sarcoma, which makes up 5% to 10% of soft tissue sarcomas, typically affects individuals under 30, with a five-year survival rate of 20% for metastatic cases. Recurrence is frequent, necessitating multiple lines of therapy and potential exhaustion of treatment options. Afami-cel is a single-dose engineered T cell receptor therapy targeting MAGE-A4-posititive tumor cells. The therapy’s clinical data from the SPEARHEAD-1 trial revealed that about 39% of patients experienced clinical responses, with a median response duration of around 12 months. Median overall survival was about 17 months, contrasting with historical data of less than 12 months for those who received two or more prior lines of therapy. Some 70% of responders to afami-cel were alive two years post-treatment.

The FDA granted afami-cel Orphan Drug Designation for the treatment of soft tissue sarcomas and Regenerative Medicine Advanced Therapy designation.

The Big Picture

If approved, afami-cel would become the first approved engineered T cell therapy for this type of cancer. In November 2023, the Investigational New Drug (IND) for another T cell therapy, lete-cel, was transferred from GSK to Adaptimmune for the pivotal IGNYTE-ESO clinical trial, following an interim analysis showing a 40% response rate in synovial sarcoma or myxoid/round cell liposarcoma patients.

Adaptimmune CEO Adrian Rawcliffe said that the clinical results from the pivotal trial position lete-cel as a complement to afami-cel, potentially allowing the company’s sarcoma franchise to significantly expand its reach. He noted that leveraging the same commercial infrastructure intended for afami-cel could facilitate the efficient delivery of lete-cel to the market. Afami-cel would become the first engineered T cell therapy for a solid tumor. The franchise, including both afami-cel and lete-cel, “is projected to deliver up to $400 million in U.S. peak year sales,” Rawcliffe said in March.

Autolus Therapeutics’ obe-cel

Indication: B cell acute lymphoblastic leukemia

Therapy type: CAR-T cell therapy

Action date: November 16

In accepting Autolus Therapeutics’ BLA for its lead next-generation CAR-T therapy obe-cel for relapsed/refractory adult acute lymphoblastic leukemia (ALL) in January, the FDA set a PDUFA target action date of November 16.

Obe-cel, an investigational CD19 CAR-T cell therapy, is designed to enhance clinical activity and safety compared to existing therapies by incorporating a fast target binding off-rate, minimizing T cell activation. In December 2022, Autolus hailed the Phase II FELIX trial as a success, as interim analysis showcased an overall remission rate of 70% for obe-cel in leukemia patients. CAR-T cell concentration peaked and persisted at 75% in peripheral blood after a median of 166.5 days post-infusion. The trial also demonstrated positive safety findings. 

Obe-cel holds the FDA’s Orphan Drug and Regenerative Medicine Advanced Therapy status. Earlier this month, the company;’s obe-cel marketing application was accepted by the European Medicines Agency.

The Big Picture

The potential approval of a second cell therapy for solid tumors this year suggests breakthroughs in treating these cancers may be near, Stephen Majors, a spokesperson for the ARM, told BioSpace. There is an “increasing focus on solid tumors,” a previously elusive area for cell and gene therapy, he said.

A recent $250 million deal granted BioNTech access to obe-cel, with the partner to aid in the launch and development program expansion and receive royalties based on net sales. Autolus expects obe-cel peak sales to exceed $300 million.

Autolus could face competition from Gilead Sciences subsidiary Kite, which in 2021 gained FDA approval for its CAR-T therapy Tecartus, the first such treatment for ALL, achieving a 65% complete remission rate.

Ana Mulero is a freelance writer based in Puerto Rico. She can be reached at anacmulero@outlook.com and @anitamulero on X.

 

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Distressed Scooter Giant Bird Global Sold to Third Lane Mobility for $145 Million

By Bob Clair

Bird Global Inc., one of the largest scooter rental businesses in North America, was sold to its debtholders in a bankruptcy-led process.

Bird, which went public via SPAC in 2019, had failed to reach profitability and burned more than $650 million of cash from 2020 through 2022. In total, the company dispatched more than $1.1 billion in venture funding.

“They were very successful in raising capital for a substantial period of time, but the markets have not been as forgiving for growth companies as they were a few years ago,” said James Cassel, chairman and co-founder of Miami-based investment bank Cassel Salpeter & Co., Bird’s financial advisor.

After reaching a peak valuation of $2.5 billion in its Series D, the business was delisted in September 2023 and entered into Chapter 11 bankruptcy in December—prompted by debtors’ desire for a Section 363 sale.

First lien holders were led by MidCap Financial, an affiliate of Apollo Global Management, while second lien holders were led by Obelysk Inc. The group provided up to $33 million in new money first lien DIP financing at a 15% interest rate (6% cash, 9% payment-in-kind), along with $6 million in new money second lien notes at an 18% PIK interest rate.

Speaking to Transacted, Cassel described a broad sale process with a mix of sponsor and strategic interest.

“We went to 137 potential purchasers, 81 that we identified as strategic parties,” Cassel said. “We talked to anybody and everybody. People like Lime and Uber and Citi Bike, as well as private equity firms that buy distressed businesses. We went to all the players, both domestic and foreign.”

Christopher Rankin, Bird’s Chief Restructuring Officer, confirmed there was interest from strategics, though declined to share how far competitors progressed in the bidding process.

When asked, Lime, the Uber-backed industry leader, said via spokesman Russell Murphy only that “we are not going to comment on Bird’s situation.”

In the absence of a competitive offer, Bird was purchased by stalking horse bidder Third Lane Mobility, an entity formed by a consortium of the company’s first and second lien holders.

“The stalking horse bidders were a related party, so that adds a fair amount of complexity to make sure the proper process was run and that we went to the proper parties. We got the cooperation of management, which, on the one hand, may be conflicted because they are part of the buyer, but on the other hand, they are part of the seller,” Cassel said.

MidCap Financial did not respond to requests for comment.

Bird’s outcome is the latest setback for the challenged scooter and bike rental industry. Once a hotbed of venture activity, unprofitable operators have shut down or consolidated in recent years – Bird itself had bought rival Spin and platform partner Bird Canada as recently as late 2023.

Cassel said he expects further consolidation, particularly among the large number of smaller regional players.

Along with scale, Cassel notes that micromobility M&A “can be a way to get into certain markets or a way to obtain certain contracts.”

As for Bird, Rankin said he doesn’t expect new owner Third Lane to be acquisitive anytime soon.

“I don’t think they’ll be making acquisitions. It’s up to them, but I don’t expect that,” Rankin said.

Bob Clair

Bob Clair is a reporter at Transacted covering private equity and investment banking. He has covered breaking M&A news for several years and is a general assignment freelance reporter for The New York Times, where he shared in a 2021 Pulitzer Prize win.

 

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Flying cars are coming! Here’s how they could change the way you travel.

Christopher Elliott

Special to USA TODAY

April 9, 2024

If you’d told me a few weeks ago that flying cars will change the way we travel, I probably would have laughed at you. 

But when Elon Musk hinted there might be a flying Tesla soon, the internet started buzzing with flying-car news. And now people are talking.

“There’s absolutely a sense that the time has come,” said aviation industry investment banker Joey Smith at Cassel Salpeter & Co. “Numerous well-funded companies are racing to build a viable production vehicle, and they could take to the skies as early as next year.”

Check out Elliott Confidential, the newsletter the travel industry doesn’t want you to read. Each issue is filled with breaking news, deep insights, and exclusive strategies for becoming a better traveler. But don’t tell anyone!

What’s more, attitudes toward Advanced Air Mobility (AAM) – that’s a fancy term for flying cars and other personal flying vehicles – have shifted. A new study suggests Americans, and particularly younger urban consumers, are warming to the idea of flying to their next destination. Even so, the definition of a flying car is a little hard to pin down. I’ll explain in a minute.

Don’t expect to open your apartment window and see a scene out of a sci-fi movie like “Minority Report” anytime soon. (You know, lanes of flying vehicles lining the sky.) It’ll be a slow rollout, but it has the potential to change the way we travel like we haven’t seen since the introduction of the jet engine.

What kind of flying vehicles are out there?

Personal flying vehicles defy simple classification, which may be part of their allure. There are STOLs and VTOLs, quadcopters, octocopters and hexacopters. Some are electric, some are gas-powered. 

Don’t be confused by all the acronyms. I think it’s OK to just call them flying cars.

Right now, the ones generating the most noise are electric vertical takeoff and landing vehicles (eVTOLs). These aircraft take off and land like a helicopter. For example, Joby’s air taxi service in Manhattan plans to use its eVTOL, which looks like an oversized drone, to shuttle passengers from New York to John F. Kennedy International Airport next year.

My categorization is a little unconventional, but here’s how I see it: There are really just two types of flying cars. The first are cars that can drive on the road and fly, just like the ones in “Back to the Future.” 

One of the most high-profile of these is the Model A being developed by Alef Aeronautics. It’s an eVTOL that looks like a sports car. But once it takes off, the passenger cabin pivots and the vehicle flies sideways, which looks a little jarring but very cool.

The second type of flying vehicle doesn’t even bother with the road. For example, the Lilium Jet is a fixed-wing aircraft and an eVTOL. But you won’t see it on the highway unless it’s making an emergency landing – so technically, it’s not a flying car.

Like I said, these flying vehicles aren’t easy to categorize. And it hasn’t really mattered until now because you could find them only in aviation magazines and science fiction movies. But now there are serious discussions about flying cars, and developers have started taking orders. The future is almost here.

Flying cars aren’t cleared for takeoff – yet

Don’t get too excited. A few things still have to be worked out, experts say. For example, eVTOL manufacturers have struggled with several challenges. It’s not just how to design lightweight aircraft made from the right composite materials and with adequate battery life. It’s also piloting the flying car. Issues such as autonomous flight capability and pilot training have proven to be big barriers. 

There are also regulatory roadblocks. The Federal Aviation Administration, which has oversight of these new vehicles, has adopted a “crawl-walk-run” approach. And it’s still in “crawl” mode. Last year, it laid down some rules for flying cars. Among them: They have to use existing heliports and they must have a human pilot. But there are no special traffic lanes in the sky for these vehicles yet.

The U.K. is also preparing for flying cars. In March, the government said it envisioned eVTOLs taking to the skies within four years

Observers are skeptical of the proposed timeline. Charles Leocha, president of the consumer group Travelers United, has worked on regulations for low-level unmanned aerial vehicles for the last decade. He said the wheels are turning slowly.

“The FAA is at least a decade away from allowing or approving any kind of flying car,” he said.

All of that has made people reluctant to order a flying car – if they can afford one. Most vehicles can cost $150,000 to as much as $10 million.

“Prospective buyers are likely to hold off until regulatory barriers are dismantled,” said Francesco Cerroni, a mobility expert at the design firm Buro Happold.

Where to find personal flying vehicles now

If you want to see a flying vehicle for yourself, here’s where to find them (outside of the movie theater):

  • Lift Aircraft, which manufactures a single-seat eVTOL called Hexa, is offering test flights on its single-seat Hexas this spring. It’s scheduled to be in Lakeland Linder International Airport in Florida in April and Austin in May.
  • Early next year, you’ll be able to hail an air taxi from Abu Dhabi and Dubai on a four-passenger Midnight aircraft. The eVTOL, operated by UAE-based Falcon Aviation, will cover the 81-mile trip in just 30 minutes. By road, the drive can take a few hours in traffic.
  • There’s even a flying car driving school. Netherlands auto manufacturer PAL-V will show you the ins and outs of flying a car. They even have a flying car showroom in Munich where you can buy your own gyroplane/car combination. (It’ll cost you about $550,000.)

Bottom line: Flying cars remain rare. But change is on the horizon.

How flying cars could change the way we travel

High prices and continued doubts about the viability of zipping around town like George Jetson haven’t stopped people from thinking about the future. Experts seem to agree that safe VTOLs with FAA approval could change travel forever.

“It would reduce congestion by removing some traffic on the road and create a new aviation sector, with new jobs,” said Raj Rajkumar, professor of computer engineering at Carnegie Mellon University.

Flying cars could dramatically cut the drive time between destinations typically served by short-haul commercial flights. So instead of catching a shuttle flight from Washington to New York, you’d just fly there in your own car in a fraction of the time it used to take to drive.

But that’s just the beginning. As these vehicles become faster and more affordable, they hold the promise of competing with commercial aviation. Imagine flying your family car from the suburbs of an East Coast city to Florida for your next vacation in less time than it would take you to go to the airport, get through security, wait for your departure, fly, land, collect your luggage and rent an earthbound car?

The thought of ditching airlines, with their awful customer service and addictive loyalty programs, may be the greatest promise of the AAV revolution.

If you’d asked me a few weeks ago if such a future was possible, I would have been very skeptical. Now, I’m just a little skeptical.

This is the second of a two-part series on the future of air travel.

Christopher Elliott is an author, consumer advocate, and journalist. He founded Elliott Advocacy, a nonprofit organization that helps solve consumer problems. He publishes Elliott Confidential, a travel newsletter, and the Elliott Report, a news site about customer service. If you need help with a consumer problem, you can reach him here or email him at chris@elliott.org.

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QEP Completes Sale Of Australia/New Zealand Business

March 04, 2024 08:28 ET | Source: Q.E.P. Co., Inc.

BOCA RATON, Fla., March. 04, 2024 (GLOBE NEWSWIRE) — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today announced that it has completed the previously announced sale of its Australia and New Zealand business (the “ANZ Business”) to QEP Australasia Pty. Ltd. led by Bruce Maclaren and Tony Lei, in a transaction valued at AUD 14.05 million.

Bruce Maclaren has served as the Managing Director of the ANZ Business for 20 years including a period of three years as CEO European Operations for QEP based in the UK. Tony Lei has also been involved with QEP for over 20 years as a valued supplier to the ANZ Business and QEP’s other businesses around the world.

Executive Chairman of QEP, Lewis Gould, stated, “The closing of this transaction is another significant step to realign our global footprint to drive long-term stockholder value. The proceeds from this and other recent divestitures have been used to substantially eliminate the Company’s debt and provides us with a healthy cash position as we begin the new fiscal year. We are grateful to Bruce and Tony for their many contributions to QEP and look forward to contributing to their growth in the future.”

QEP’s President & Chief Executive Officer, Leonard Gould, commented, “This latest move further underscores our commitment to enhancing focus on our local customers. Simplifying the business removes friction allowing for increased ‘speed to market’ via new product innovations, all while maintaining our best-in-class service levels.”

In connection with this transaction, the Company has entered into Amendment No. 6 (the “Amendment”) to the Fifth Amended and Restated Loan and Security Agreement, Waiver, Consent and Release dated February 15, 2021 with its lending institution, Bank of America, N.A. The Amendment waives certain covenants and restrictions relating to this sale of assets, agrees to release all liens covering the purchased assets, and consents to this transaction. The Amendment also provides the Company with additional flexibility with respect to certain financial covenants as well as permitted acquisitions and distributions.

As part of its consideration in approving the transaction, QEP’s Board of Directors appointed a Special Committee of independent and disinterested directors, to consider and recommend the transaction for approval by the Board of Directors. In recommending the transaction to the Board of Directors for approval, the Special Committee considered the financial advice from its financial advisor, Cassel Salpeter & Co. LLC, a third party investment banking firm.

About QEP

Founded in 1979, Q.E.P. Co., Inc. is a leading designer, manufacturer and distributor of a broad range of best-in-class flooring installation solutions for commercial and home improvement projects worldwide. QEP offers a comprehensive line of specialty installation tools, adhesives, and underlayment. QEP sells its products throughout the world to home improvement retail centers, and professional specialty distribution outlets, under brand names including QEP®, LASH®, ROBERTS®, Capitol®, Premix- Marbletite® (PMM), Brutus®, Homelux®, PRCI®, and Tomecanic®.

QEP is headquartered in Boca Raton, Florida with offices in Canada, Europe, Asia, Australia and New Zealand. Please visit our website
at www.qepcorporate.com.

Forward-Looking Statements

All statements contained in this press release, other than statements of historical facts, may constitute forward-looking statements within the meaning of the federal securities laws. These statements can be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning. Forward-looking statements include, but are not limited to, statements regarding the Company’s business following the sale. Any forward-looking statements contained herein are based on current expectations and beliefs, and are subject to a number of risks and uncertainties, including those listed in the Company’s annual report, as such risk factors may be amended, supplemented or superseded from time to time by other reports and disclosures made by the Company. Forward- looking statements may also be adversely affected by general market factors, competitive product development, product availability, federal and state regulations and legislation, manufacturing issues that may arise, patent positions and litigation, among other factors. The forward-looking statements contained in this press release speak only as of the date the statements were made, and the Company does not undertake any obligation to update forward-looking statements, except as required by law.

CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550

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QEP Agrees To Sell Australia/New Zealand Business

February 13, 2024 11:00 ET | Source: Q.E.P. Co., Inc.

BOCA RATON, Fla., Feb. 13, 2024 (GLOBE NEWSWIRE) — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today announced it has entered into a definitive agreement to sell substantially all of the assets of its operating subsidiaries in Australia and New Zealand (the “ANZ Business”) to QEP Australasia Pty. Ltd. led by Bruce Maclaren and Tony Lei, in a transaction valued at approximately AUD 14.05 million. The transaction is expected to close by the end of the Company’s fiscal year on February 29, 2024, subject to certain closing conditions.

Bruce Maclaren has served as the Managing Director of QEP’s ANZ Business for 20 years including a period of three years as CEO European Operations for QEP based in the UK. Tony Lei has also been involved with QEP for over 20 years as a valued supplier to the ANZ Business and QEP’s other businesses around the world.

QEP’s Board of Directors appointed a Special Committee of independent and disinterested directors, to consider this transaction for approval by the Board of Directors. Cassel Salpeter & Co. LLC, a third party investment banking firm, is serving as financial advisor to the Special Committee for the transaction.

About QEP

Founded in 1979, Q.E.P. Co., Inc. is a leading designer, manufacturer and distributor of a broad range of best-in-class flooring installation solutions for commercial and home improvement projects worldwide. QEP offers a comprehensive line of specialty installation tools, adhesives, and underlayment. QEP sells its products throughout the world to home improvement retail centers, and professional specialty distribution outlets, under brand names including QEP®, LASH®, ROBERTS®, Capitol®, Premix- Marbletite® (PMM), Brutus®, Homelux®, PRCI®, and Tomecanic®.

QEP is headquartered in Boca Raton, Florida with offices in Canada, Europe, Asia, Australia and New Zealand. Please visit our website
at www.qepcorporate.com.

Forward-Looking Statements

All statements contained in this press release, other than statements of historical facts, may constitute forward-looking statements within the meaning of the federal securities laws. These statements can be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning. Forward-looking statements include, but are not limited to, statements regarding the Company’s business following the sale. Any forward-looking statements contained herein are based on current expectations and beliefs, and are subject to a number of risks and uncertainties, including those listed in the Company’s annual report, as such risk factors may be amended, supplemented or superseded from time to time by other reports and disclosures made by the Company. Forward- looking statements may also be adversely affected by general market factors, competitive product development, product availability, federal and state regulations and legislation, manufacturing issues that may arise, patent positions and litigation, among other factors. The forward-looking statements contained in this press release speak only as of the date the statements were made, and the Company does not undertake any obligation to update forward-looking statements, except as required by law.

CONTACT:
Q.E.P. Co., Inc.
Enos Brown
Executive Vice President and
Chief Financial Officer
561-994-5550

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Add-On Deals Will Drive 2024 Middle Market M&A

By Demitri Diakantonis
Jan. 15, 2024

Despite dealflow being down by over 30 percent year on year, there was a glimmer of hope as the year concluded. Deal volume was up by 33 percent in November and December compared to 2022, according to LSEG. While no one is calling for a return to the record levels of 2021, many experts say the middle market has historically been resilient and should perform well in 2024. Here’s why.

“We see deals getting done in the lower middle-market,” says Cassel Salpeter & Co. Chairman and co-founder James Cassel. “If you’re doing lower mid-market M&A, a lot of times it’s an add-on acquisition. I think we’re going to see another good year in lower mid-market M&A in terms of add-on acquisitions.”

Cassel sees this particularly happening in the technology, healthcare and manufacturing sectors. For example, earlier this month, Gryphon-backed Vision Innovation Partners, a mid-Atlantic eye care platform with nearly 70 locations, bought Bucks-Mont Eye Associates PC in Sellersville, Pa.

On the technology side, Comply365 LLC, a portfolio company of Liberty Hall Capital Partners and an enterprise SaaS and mobile services company for content management and document distribution, has merged with Vistair Limited earlier this month, an operational data management company for aviation technical publications, safety and regulatory content.

The technology and healthcare sectors were the top two sector performers in the middle market last year, according to LSEG, with 156 and 124 deals completed worth about $38.5 billion and $28.7 billion, respectively.

Overall, there were 801 mid-market deals worth $240 billion completed in 2023 compared to 1,198 deals valued at approximately $350.2 billion completed in 2022. The LSEG numbers are based on North American deals worth between $100 million and $1 billion.

In the league tables,  JP Morgan, Goldman Sachs and RBC Capital Markets were the top three in 2023 in market share and number of deals advised. Houlihan Lokey (NYSE: HLI) moved from 14th place in 2022 to seventh in 2023. The firm recently acquired direct placement Triago.

Bankers are optimistic of what’s to come in 2024. “Expect the unexpected in 2024,” says says Thomas Smale, the CEO of investment bank FE International. “We’ll see more strategic, technology-focused deals and a keen interest in sectors like healthcare and AI. PE is gearing up for a comeback, but with a twist. The focus will shift to selective, high-potential investments.”

“I’m optimistic about 2024,” Cassel adds.

See the full list of December’s biggest middle-market deals here.

 

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Biotech Gets Creative to Avoid Bankruptcy in 2024

By Ana Mulero
Jan. 10, 2024

A total of 41 companies declared bankruptcy in 2023, according to SEC filings, an all-time high. And this is far from the only indicator of the industry’s poor financial conditions. The biotech industry is grappling with its worst bear market in recent memory, marked by challenges in obtaining fresh capital and cost-cutting measures such as layoffs.

In such a dreary funding climate, experts spoke with BioSpace about a paradigm shift in financial strategies, with increased use of royalty financing, spun-out assets and venture debt, among other nontraditional sources of cash.

There is a need to reevaluate conventional deals where companies sell common stock at market price or at a slight discount because “if you don’t and don’t get realistic, you’re going out of business; you’re going to run out of money,” said Ira Leiderman, managing director of healthcare at investment banking firm Cassel Salpeter & Co.

Growth in Royalty Financing

One of the alternatives that companies are increasingly turning to is royalty financing—funding based on future revenue-sharing agreements. Royalty financing looks attractive to companies, generally speaking, because these are non-diluted sources that do not affect their equity value, experts explained to BioSpace. In contrast, venture capital funding, angel investors, IPOs, convertible notes, stock options and warrants, rights offerings and secondary offerings all typically dilute equity.

Royalty financing has “carved out its place in the market,” said Brad Sitko, chief investment officer at XOMA, because “you’re selling economics,” not shares.

Historically, royalty financing has been dominated by three firms—Royalty Pharma, HealthCare Royalty Partners and Blackstone. They made up an average of 70% to 80% of the royalty dollars over the last couple of years, said Cody Powers, a partner and principal of portfolio and pipeline at management consulting services company ZS Associates. But now, more and more companies are adopting royalty financing. “There are more players now, and even more people are trying to get in,” Powers told BioSpace.

There are risks, however. If the company gives up too much upfront in a royalty deal and receives too little of a product’s revenue down the line, it can have serious financial consequences. “But given the choice between developing nothing and developing something, a lot of companies right now are just saying, ‘We’ll just deal with lower profitability,’” said Powers, adding that “it’s hard to imagine” the royalty financing space would not continue growing moving forward.

Ravi Samavedam, chief innovation officer at quality and compliance solutions company Azzur Group, also noted a growing trend among early-phase startups constrained by limited capital: offering future royalties in exchange for a firm’s services. This allows them to conserve funds for scientific endeavors, with the expectation of one day making payments based on the revenue generated by their assets.

Yet Leiderman cautions that licensing deals, including royalty financing, can take too long to help the company stay afloat. “Doing a licensing deal takes six to nine months minimum,” he said. “If you’re relying on that to pay the rent and make payroll, it’s pretty dangerous.” So, in some cases, companies may want to consider other options, he added.

Alternative Funding Strategies

Recent layoffs have depleted companies’ expertise, leading to a trend of transferring less mature programs to other entities through licensing agreements or partnerships, Samavedam told BioSpace. Besides royalty funding, companies can consider mergers and reverse mergers, or sharing the license with another firm to co-market therapies in specific geographic locations.

Another funding option is venture debt. Instead of selling ownership stakes in exchange for capital, companies access non-dilutive financing through VC loans. This, however, can be challenging for biotechs without a clear repayment plan, according to Sitko.

Grant financing is yet another avenue, but its unpredictability make it an unreliable solution for many companies, Sitko said.

Lain Anderson, managing director and partner at strategy consulting firm L.E.K. Consulting, also brought up the hub-and-spoke model, which he called “an emerging trend.” This approach involves dividing a portfolio into distinct entities and fundraising for them separately, he said. It caters to investors who may prefer to invest in specific assets, seeking transparency about the allocation of their funds within the portfolio.

In general, Sitko said the right advice to companies is to use the fishing analogy and have as many lines in the water as possible. “You don’t know what is going to turn over and be the positive financing event you’re seeking and will allow you to continue.”

Keep Valuations Reasonable

Whether pursuing traditional or alternative investments, appropriate company valuations are important, experts told BioSpace. A company’s valuation directly influences the terms on which it can secure funding, and many companies these days make the mistake of overvaluing their worth, said James Cassel, chairman and co-founder of Cassel Salpeter.

“It may be that the seller has to give some consideration to taking earn-outs, milestone payments and other types of structures because what they really need is the buyers coming into the finance process moving forward, and some people are unrealistic about this until it’s too late,” Cassel told BioSpace. “No one has gone out of business from dilution, and it’s better in many cases to keep a smaller part of your company funded than own 100% of your company that goes out of business.”

Ana Mulero is a freelance writer based in Puerto Rico. She can be reached at anacmulero@outlook.com and @anitamulero on X.

 

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Athersys Adds to Surge of Biotechs Filing for Bankruptcy, Sells to Healios

By Kate Goodwin
Jan. 9, 2024

Continuing the surge of biotech bankruptcies, Athersys filed for Chapter 11 on January 5, according to an SEC filing.

All assets of the regenerative medicine and cell therapy company are being divested to its research partner, Healio, to the tune of $2 million in the form of a credit bid.

The bankruptcy filing was not a surprise. After reporting disappointing results from its MultiStem pivotal trial in October 2023, the company said it was exploring options but, if unable to obtain adequate financing, would have to file for protection under bankruptcy laws to “conduct an orderly wind down of operations.” Athersys ended the third quarter of 2023 with only $1 million in cash, despite cost reduction efforts which included layoffs earlier in the year. Even a $10.4 million raise from investors and licensing partners in November was not enough to stave off Chapter 11.

Healios will now take the reins on Athersys’ MultiStem program, which has been in development since 1994. The off-the-shelf therapy developed from adult stem cells was being studied in ischemic stroke—a program which was already partnered with Healios—traumatic injury and acute respiratory distress syndrome. The treatment was attractive as a stem cell option because it could be given to patients without prior immune suppression or tissue matching.

Last year was a particularly tough one for biotech, presenting a record high number of bankruptcies, BioSpace found, with 41 biotech and pharma companies filing for bankruptcy. By comparison, 20 companies filed in 2022 and only nine in 2021.

Experts identified the primary drivers for the surge as the post-COVID-19 economy, a shift toward data-driven financing activity, rising inflation rates and the rapid rate of innovation leading to increased competition in the space.

“It’s a terrible market to get financing,” Ira Leiderman, managing director of the healthcare practice at Cassel Salpeter & Co., told BioSpace previously. “Companies are not getting financed, and they have no choice but to break the glass and push the bankruptcy button.”

Kate Goodwin is a freelance life science writer based in Des Moines, Iowa. She can be reached at kate.goodwin@biospace.com and on LinkedIn.   

 

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Bird Enters into Comprehensive Restructuring Support Agreement with First- and Second-Lien Lenders to Strengthen Financial Position

NEWS PROVIDED BY
Bird Global, Inc.
20 Dec, 2023

Bird has sufficient liquidity to meet financial obligations to city partners, vendors, suppliers, and employees during and after the restructuring process, and will operate as usual Agreement has unanimous support of first- and second-lien lenders Apollo Global Management and second-lien lenders to provide $25 million in DIP financing

MIAMI, Dec. 20, 2023 /PRNewswire/ — Bird Global, Inc. (OTCQX: BRDS), (“Bird” or the “Company”) a leader in environmentally friendly electric transportation, today announced its entry into a financial restructuring process aimed at strengthening its balance sheet and better positioning the company for longterm, sustainable growth. Bird will operate as usual during this process, maintaining the same service for its riders and upholding its commitments to partner cities, fleet managers, and employees.

“This announcement represents a significant milestone in Bird’s transformation, which began with the appointment of new leadership early this year,” said Bird Interim CEO Michael Washinushi. “We are making progress toward profitability and aim to accelerate that progress by rightsizing our capital structure through this restructuring. We remain focused on our mission to make cities more livable by using micromobility to reduce car usage, traffic, and carbon emissions.”

During and after the restructuring process, Mr. Washinushi will continue as Interim CEO, supported by Board Chair John Bitove, President Stewart Lyons, and CFO Joseph Prodan. Last week, Harvey L. Tepner joined the Board of Directors as an Independent Director, and Philip Evershed resigned from the Board of Directors.

The Company’s first- and second-lien lenders have also entered into a comprehensive restructuring support agreement (the “RSA”). To implement the RSA, and access $25 million in new debtor-in-possession financing from MidCap Financial, a division of Apollo Global Management, and the company’s existing second-lien lenders, Bird has commenced a voluntary Chapter 11 bankruptcy proceeding in the U.S. Bankruptcy Court for the Southern District of Florida. The Company will use the court-supervised process to facilitate a sale of its assets, and has entered into a “stalking horse” agreement with the Company’s existing lenders, which effectively sets a floor for Bird’s value. The bid is subject to higher and better offers, and is aimed at maximizing value for all stakeholders. Bird expects to complete the sale process in the next 90-120 days.

Bird Canada and Bird Europe (dba as “Bird Rides Europe B.V.”) are not part of the filing and also continue to operate as normal. Since its inception, Bird riders have traveled over 300 million miles globally, offsetting an estimated 90 million pounds of carbon emissions from avoided car trips, and playing a pivotal role in hundreds of cities’ sustainability goals while making alternative transportation convenient, efficient, and fun.

Bird has filed with the Court a series of customary “First Day Motions” to facilitate a smooth transition into bankruptcy. These filings provide for payment of wages and benefits to employees, and make other provisions to enable Bird to continue operating as usual. Bird expects the Court to approve these requests in short order, which are expected to minimize the impact of the restructuring process on its city partners, riders, employees and other key stakeholders.

Additional information related to the proceedings is available at http://dm.epiq11.com/case/birdglobal/info. Stakeholders with questions may contact the Company’s Claims Agent, Epiq, at bird@epiqglobal.com.

BergerSingerman LLP is serving as legal counsel, Cassel Salpeter & Co. is serving as investment banker, Teneo Capital LLC is serving as financial and restructuring advisor, and Epiq Corporate Restructuring, LLC is serving as claims and noticing agent to the Company.

About Bird

Bird, the largest micromobility operator in North America, is an electric vehicle company dedicated to bringing affordable, environmentally friendly transportation solutions such as e-scooters and e-bikes to communities across the world. Bird and Spin’s cleaner, affordable, and on-demand mobility solutions are available in 350 cities, primarily across Canada, the United States, Europe, the Middle East, and Australia. We take a collaborative, community-first approach to micromobility. Bird and Spin partner closely with the cities in which they operate to provide a reliable and affordable transportation option for people who live and work there.

For more information on Bird, visit www.bird.co and for more information on Spin, visit www.spin.app.

Forward-looking Statements

Certain statements in this press release may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements other than statements of historical fact contained in this press release including, but not limited to, the anticipated impact on the operation of Bird’s business as a result of the restructuring process, Bird’s business strategy and plans, the anticipated timing of the transactions contemplated by the RSA, Bird’s expectations regarding the bankruptcy proceedings and outcome and timing of related motions filed with the Court. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forwardlooking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Bird and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to risks and uncertainties related to, among other things: the bankruptcy process, the ability of Bird and its subsidiaries to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 cases; the ability of Bird and its subsidiaries to consummate a sale and plan within the Company’s currently expected timeline or at all; the effects of the Chapter 11 cases, including increased professional costs, on the liquidity, results of operations and businesses of Bird and its subsidiaries; the ability of Bird and its subsidiaries to operate their respective businesses during the pendency of the Chapter 11 cases; the consummation of the transactions contemplated by the restructuring support agreement (“RSA”), including the ability of the parties to negotiate definitive agreements with respect to the matters covered by the term sheets included in the RSA; the occurrence of events that may give rise to a right of any of the parties to terminate the RSA, and the ability of the parties thereto to satisfy the other conditions of the RSA, including satisfying the milestones specified in the RSA; the ability to maintain relationships with Bird’s suppliers, customers, employees and other third parties as a result of, and following the Company’s emergence upon completion of, the Chapter 11 cases, as well as perceptions of the Company’s increased performance and credit risks associated with its constrained liquidity position and capital structure, which reflects a recently increased risk of additional bankruptcy or insolvency proceedings; the possibility that Bird may be unable to achieve its business and strategic goals even if the RSA and sale is successfully consummated; Bird’s ability to generate sufficient cash to reduce its indebtedness and its potential need and ability to incur further indebtedness; developing, funding and executing Bird’s business plan and ability to continue as a going concern; Bird’s capital structure upon completion of the Chapter 11 cases; the comparability of Bird’s postemergence financial results to its historical results and the projections disclosed in connection with the transactions contemplated by the RSA; and attraction and retention of key personnel in light of the Chapter 11 cases. Other factors may also cause Bird’s actual results to differ materially from those expressed or implied in the forward-looking statements and such factors are discussed in Bird’s filings with the U.S. Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent reports filed by Bird with the SEC. Copies of Bird’s filings with the SEC may be obtained at the “SEC Filings” section of Bird’s website at www.bird.co or on the SEC’s website at www.sec.gov.

 

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