Bay Area's Catalyst Biosciences to Merge With Unlucky Targacept
March 6, 2015
By Mark Terry, BioSpace.com Breaking News Staff
South San Francisco, Calif.-based Catalyst Biosciences, Inc., announced yesterday that it is merging with Winston-Salem, N.C.-based Targacept, Inc. . The newly formed joint company will be named Catalyst Biosciences, Inc. with a NASDAQ symbol expected to be CBIO.
As part of the deal, Catalyst shareholders will own about 65 percent of the new company. Operations will be combined. Targacept stockholders will retain about 35 percent of the new company and will receive a dividend of an aggregate of $37 million in non-interest bearing redeemable convertible notes, as well as about $20 million in cash.
“This transaction with Catalyst reflects the continued commitment of Targacept’s Board of Directors and management team to delivery value to Targacept stockholders, and make a difference in patients’ lives,” said Stephen Hill, president and chief executive officer of Targacept in a statement. “The proposed transaction employs an innovative structure that is designed to optimize stockholder value for both Catalyst and Targacept. Substantial capital is committed to the combined entity, potential additional capital is earmarked for future investment into the combined company if the notes are converted, and a special dividend is provided for existing Targacept stockholders at the closing.”
In mid-2009 Catalyst signed a licensing deal for $521 million with Wyeth on a Factor VIIa to treat uncontrolled bleeding. Since then Wyeth became Pfizer Inc. and the compound, PF-05280602, recently finished a four-year Phase I study.
Targacept came out of research conducted at R.J. Reynolds Tobacco in 2000. Its focus was on the treatment of Alzheimer’s and Parkinson’s disease. Initially Targacept was hired by R.J. Reynolds to come up with safer cigarettes. The company’s drug, TC-1734, was a possible treatment for mild to moderate Alzheimer’s disease. However, in the Phase IIb clinical trial, it failed to show superiority to donepezil, the most common prescription for Alzheimer’s.
Now the combined companies will have a pipeline of protease therapeutics, including PF-05280602, an engineered Factor VIIa for hemophilia, which was developed by Pfizer under license from Catalyst. Four more possible drug candidates for hemophilia B are in the pipeline, as well possible other drug development program related to the Pfizer-sponsored Factor VIIa program.
“This merger establishes a well-capitalized public company with resources to advance our unique protease-based product candidates through multiple future value inflection points,” said Nassim Usman, chief executive officer of Catalyst in a statement. “In addition to our Factor VIIa program we will also have sufficient resources to initiate and complete a planned proof-of-concept study of CB 2679d, a next-generation Factor IX for hemophilia B patients, as well as further development of our novel Factor Xa variant and our anti-complement programs.”
BioSpace Temperature Poll
Last week controversy erupted over the compensation package for Sanofi’s new CEO, Olivier Brandicourt, with several French government officials decrying the amount, calling it "incomprehensible." Brandicourt could walk off with as much as $4.5 million in a “golden handshake” payment in addition to making $4.76 million a year. That base figure is comprised by a fixed annual salary of $1.36 million a year, which is supplemented by a performance-related bonus of between 150 to 250 percent, as well as stock options and performance shares.
So BioSpace wants your opinion, what do you think?