RESEARCH TRIANGLE PARK – Morrisville-based NightHawk Biosciences is changing direction – and business strategy.
The company has announced the divestiture of its biodefense subsidiary, Elusys Therapeutics, and other related assets to become a pure play large molecule biomanufacturing contract development and manufacturing organization (CDMO). That means growing and expanding its new Scorpius Biomanufacturing business.
The realignment will include eliminating most of NightHawk’s current research and development expenses, the company said.
“Given the strength of our CDMO operations at Scorpius, we have made the strategic decision to refocus our efforts around those activities that hold the potential to generate meaningful cash flow, while substantially reducing non-core costs associated with overhead,” said NightHawk CEO Jeff Wolf. “There is a significant shortage of clinical-scale biologic manufacturing capacity within the industry as a result of growing demand for large molecule CDMO services. We believe we are extremely well positioned to capitalize on these trends…”
NightHawk said it expects Scorpius’ first full year of operation in 2023 to generate more than $20 million in revenue, much of which will be realized in 2024. The San Antonio, Texas-based business offers a broad array of analytical testing, process development and manufacturing services to pharmaceutical and biotech companies.
Meanwhile, Wolf is establishing a private company to acquire Elusys’ assets, which he also will run. As part of the transaction, the new business will assume Elusys’ contracted financial commitments, estimated at more than $40 million. In addition, it will provide an upfront payment to NightHawk of $500,000, a note for $2.25 million that is convertible into NightHawk common stock, and royalties of 3% of all Elusys’ gross sales until June 30, 2031.
NightHawk said the divestiture of Elusys and cuts to its R&D budget should reduce the company’s annual operating expenses by more than $13 million, while eliminating the need to raise additional capital to support Elusys’ programs.
NightHawk was created in 2022 from predecessor company Heat Biologics, a 2008 University of Miami spinout. The North Carolina Biotechnology Center was instrumental in encouraging company CEO Wolf to relocate the fledging business to the state in 2011 and in supporting it when it arrived.
NCBiotech provided Heat’s first source of funding – a $225,000 Strategic Growth Loan – and made temporary office space available in the Center’s Landing Pad. It also granted a $3,000 industrial intern award in 2012 to support the company’s initial public stock offering. The business moved to its current Morrisville location in 2019.
Throughout his career, Wolf has specialized in building new life-sciences companies from the ground up and playing an active role in supporting their growth. Included among the businesses he has cofounded are Avigen, TyRx Pharma, and Elusys.
(C) N.C. Biotech Center