Benzinga | Feb 19, 2021 10:50AM EST

Ayala Pharmaceuticals Raises $25M Via Equity To Fund AL102 Development In Connective Tissue Tumors

* Ayala Pharmaceuticals Inc (NASDAQ: AYLA) will raise $25 million via a private placement of around 1.7 million units at $15 per unit from institutional investors, including Redmile Group and SIO Capital Management. Each unit consists of one Ayala share and a warrant to purchase 0.35 shares at an exercise price of $18.10.

* The placement is expected to close by February 23, and Ayala notes that the additional funding will extend its cash runway into 2023.

* The funds will support the development of AL102 into a pivotal Phase 2/3 study for desmoid tumors (aggressive fibromatosis or desmoid-type fibromatosis). It is a rare connective tissue tumor typically in the upper and lower extremities, abdominal wall, head and neck area, mesenteric root, and chest wall.

* The Phase 2/3 RINGSIDE study in adult and adolescent patients with desmoid tumors will start in the first half of 2021, with an initial interim data read-out from part 1 and dose selection expected by mid-2022.

* AL102 is an oral gamma-secretase inhibitor currently being developed for desmoid tumors and in combination with Novartis' B-cell maturation antigen (BCMA)-targeting agents for the treatment of multiple myeloma.

* Jefferies LLC is acting as the exclusive placement agent for the private placement.

* Price Action: AYLA gained 5.03% at $19.01 in market trading hours on last check Friday.