Blakes advising ESSA; Stikeman Elliott representing XOMA Royalty
XenoTherapeutics Inc., a U.S. nonprofit organization focused on advancing xenotransplantation therapies, has announced plans to acquire ESSA Pharma Inc., a Vancouver-based clinical-stage pharmaceutical company, in an all-cash transaction financed and structured by biotechnology royalty aggregator XOMA Royalty Corporation.
The deal marks a significant shift for ESSA, which has previously faced setbacks in its prostate cancer drug development program.
Under the terms of the definitive agreement announced July 14, XenoTherapeutics will acquire all of ESSA’s outstanding shares for approximately US$1.91 per share in cash. The final cash consideration is subject to adjustments based on ESSA’s net cash at the time of closing. Shareholders will also receive a contingent value right (CVR), potentially worth up to US$2.95 million in total, tied to the resolution of outstanding liabilities and delivered within 18 months of closing. Based on current foreign exchange rates, the deal translates to approximately $2.60 per share.
This acquisition, structured as a statutory plan of arrangement under the Canada Business Corporations Act, is expected to close in the second half of 2025, pending regulatory approvals and approval by at least two-thirds of ESSA’s shareholders. The transaction is notable in that it allows ESSA to exit the public markets while returning remaining cash to shareholders, as the company winds down its oncology programs.
ESSA, which had been developing small-molecule therapies for prostate cancer that target the androgen receptor, had struggled to gain traction after the failure of its lead candidate, Masofaniten (EPI-7386). Clinical trial data in recent years failed to meet investor expectations, and the company has since been seeking strategic alternatives. The acquisition offers a resolution to the uncertainty that has clouded ESSA’s future since 2023.
XenoTherapeutics, although lesser-known in the commercial biopharma space, has attracted attention for its work in xenotransplantation—transplanting organs or tissues from non-human sources into humans. The nonprofit has been exploring skin graft treatments for burn victims and is likely to use ESSA’s public listing and residual assets as a platform for future development efforts.
Several prominent legal and financial advisors supported the deal. Leerink Partners acted as financial advisor to ESSA. On the legal front, ESSA was represented by Blake, Cassels & Graydon LLP in Canada and Skadden, Arps, Slate, Meagher & Flom LLP in the United States. XOMA Royalty was advised by Stikeman Elliott LLP (Canada) and Gibson, Dunn & Crutcher LLP (U.S.).
