ADXS - Ayala rises 16% on all-stock merger with Advaxis to focus on cancer drugs

Ayala Pharmaceuticals ( NASDAQ: AYLA ) and Advaxis ( OTCQX:ADXS ) are merging in an all stock transaction to focus on the development of cancer therapies.

Under the agreement, each outstanding common share of Ayala will be converted into the right to receive common  shares of Advaxis based on an exchange ratio. After the merger is completed, Ayala stockholders will own ~62.5% of the combined company, while the remaining ~37.5% will be held by Advaxis.

The companies said Ayala will be delisted from Nasdaq and the combined company's common stock is expected to begin trading on the OTCQX at the effective time of the merger.

Advaxis noted that it has plans to list the combined company on Nasdaq but no assurances can be made.

The new company will focus on developing and commercializing Ayala's lead program AL102 to treat desmoid tumors and Advaxis' drug candidate ADXS-504 for prostate cancer.

The executive officers of the combined company will include  Advaxis current President and CEO Kenneth Berlin as president, CEO and director; Andres Gutierrez, current chief medical officer of Advaxis; and Igor Gitelman, interim CFO of Advaxis.

The companies said Ayala's Founder and CEO Roni Mamluk, and CFO Yossi Maimon will resign from their positions and will help with the transition.

Ayala's Chief Medical Officer Gary Gordon will also resign but is expected to continue in an advisory role for some time, the companies added.

The board is expected to consist of seven members: two designated by Advaxis, four by Ayala, and Berlin.

The merger is subject to certain conditions, which includes approval by Ayala stockholders.

AYLA +16.29% to $1.06 premarket Oct. 19

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