(News Bulletin 247) – The investment fund Akkadian Partners pleaded on Wednesday for an alternative strategy for Erytech, considering that the proposed merger with Pherecydes underestimated the value of biotech.

Akkadian believes that the proposal to establish a merger parity of one Erytech share for one Pherecydes share led to an overvaluation of the value of Pherecydes, which he considers to be in a state of ‘near bankruptcy’.

According to the multi-strategy fund, specializing in the health sector, the valuation retained for Erytech greatly underestimates its potential, which exceeds the mere amount of its cash.

In a press release, Akkadian suggests instead relaunching the registration procedures for the acute lymphoblastic leukemia (ALL) program in Europe.

It also evokes the path of certain partnership opportunities in the field of orphan diseases and in the field of cancer, namely areas of expertise.

Akkadian also advises the company to seek a company generating a gross operating surplus (EBITDA) of three to five million euros, valued at 8 to 12 times its EBITDA, an acquisition which would have the advantage, according to him, to allow the use of Erytech’s tax loss carryforwards.

If such a strategy proves impossible to put in place, Akkadian would recommend seeking a buyer in cash or shares likely to be interested in buying the company outright.

Akkadian manages holdings in several pharmaceutical and biotechnology companies in the United States and Europe, notably on behalf of ‘family offices’ and very wealthy individuals.

For the record, the fund has taken legal action to obtain the postponement of the general meeting scheduled for June 23 in order to ratify the proposed merger between Erytech and Pherecydes.

According to Erytech, Akkadian would be a shareholder with 5% of its capital.

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