Biotechnology company Sonnet BioTherapeutics has agreed to acquire all outstanding shares of Relief Therapeutics under a binding share exchange agreement with Relief Therapeutics Holding.

Under the terms of the deal, Relief Therapeutics will receive 7,111,947 of Sonnet’s common shares.

The acquisition will provide Sonnet rights to develop atexakin alfa (SON-080), a low-dosage formulation of interleukin-6 (IL-6), which is a cytokine of 185 amino acids having pleiotropic functions in various tissues and organs.

Atexakin was licensed by Relief Therapeutics in August 2015 from Merck’s wholly-owned subsidiary Ares Trading. The therapeutic completed Phase I / II clinical trials in thrombocytopenic cancer.

Sonnet intends to fund the development of the product in chemotherapy-induced peripheral neuropathy (CIPN), with plans to expand its use to treat other diseases, including diabetic neuropathy.

Sonnet BioTherapeutics chairman Pankaj Mohan said: “After carefully reviewing the preclinical and clinical data, we believe atexakin can be a safe and effective treatment for CIPN, where there is currently no approved disease-modifying therapies.

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“Owing to the size of the patient population and corresponding high unmet medical need, we see atexakin as having blockbuster commercial potential.”

Sonnet also announced that an undisclosed investor provided the company with access of up to $100m in a common stock purchase agreement for supporting its public operations.

Sonnet BioTherapeutics chief financial officer Jay Cross said: “This common stock purchase agreement affords Sonnet access to capital, if needed, at a low cost, while preserving the flexibility to pursue other avenues of financing.

“With the agreement in place, we believe we will be in a unique position to focus on the successful execution of our R&D strategy.”

The acquisition of Relief Therapeutics is subject to customary closing conditions.

Immediately following the completion of the transaction, Sonnet intends to assume the development of SON-080, along with its in-house drug candidates.