Mast Therapeutics Inc. has agreed to acquire Aires Pharmaceuticals Inc. at a steep discount, in an all-stock deal worth about $5.2 million.

The companies are both based in San Diego. Mast (NYSE: MSTX) said the acquisition will help with its development of circulatory disorder drugs.

Aires, which develops drugs for pulmonary disorders, has completed several venture financing rounds, including a $20 million Series B round in 2010.

“We are paying significantly less than that to acquire the program,” Mast CEO Brian Culley said in a statement.

Drug giant Novartis AG partnered with Aires in 2010 and had the option to acquire the company, but chose not to.

Mast Therapeutics opened at 85 cents per share and had a market capitalization of about $87.5 million on Feb. 10, when the deal was announced. Because of this, the Aires acquisition — for 6 million shares of stock — appears to be worth about $5.2 million.

Mast expects to invest $2 million in developing AIR001, Aires’ lead drug candidate, over the next year. However, Aires is expected to invest $3 million in net cash at the closing of the merger, so growing the product will not require additional investment from Mast, Culley said.

The last news from Aires, a privately held company, was that in May 2012 lower doses of AIR001 were tolerated in a phase 1 trial, higher doses caused moderate to severe dizziness and near-fainting.

The acquisition is expected to close later this month.