Sorrento Therapeutics has entered into a merger agreement to acquire gene-encoded therapeutics firm SmartPharm for an aggregate of up to $19.4m shares of Sorrento common stock.

SmartPharm is developing non-viral DNA and RNA gene delivery platforms for Covid-19 and rare diseases said to have the potential for application in antibody-based therapies.

Last month, the companies signed a letter of intent for the transaction.

The companies also previously agreed on a research and development alliance to encode and express in-vivo Sorrento’s SARS-CoV-2 neutralising monoclonal antibodies using SmartPharm’s Gene Mab plasmid nanoparticle platform.

Sorrento used the Gene Mab technology to identify STI-2020dna, an antibody encoded DNA plasmid candidate obtained from the company’s STI-1499 (COVI-GUARD).

The antibody candidate has been matured and optimised for DNA plasmid delivery to produce antibodies in-vivo against SARS-CoV-2 and its highly contagious D614G variant, said Sorrento.

Currently, STI-2020dna is in preclinical in-vivo studies and expected to generate long-lasting anti-viral protection with a single intramuscular injection.

Sorrento Therapeutics CEO Henry Ji said: “We are very encouraged by the preclinical data generated thus far by our STI-2020dna plasmid candidate against Covid-19.

“STI-2020dna has the potential to produce potent antibodies in the human body in-vivo which may provide an attractive alternative to vaccines that might not be effective against the emerging and highly contagious variants of the virus.”

In May, Sorrento reported that its Covid-19 therapeutic antibody candidate, STI-1499, can completely block the viral infection in-vitro during preclinical studies.

SmartPharm Therapeutics CEO Jose Trevejo said: “From the first emergence of this deadly coronavirus, Sorrento has dedicated their resources to the development of multiple countermeasures to Covid-19, including potent antibody candidates.

“This merger should help accelerate our gene-encoded antibody platform technology (Gene Mab) with the ultimate goal of helping patients affected by this global pandemic as well as other diseases.”

Subject to customary closing conditions, the merger should close early next month.