Regado Biosciences, Inc. (RGDO) announced that it has entered into a definitive merger agreement with privately-held Tobira Therapeutics, Inc.
As per the agreement, Tobira will merge with a wholly-owned subsidiary of Regado in an all-stock transaction, and form a company focused on the development of novel treatments for liver and inflammatory diseases.
Details of the Merger
Regado will be renamed Tobira Therapeutics, Inc. post merger, headed by Tobira's chief executive officer, Laurent Fischer.
Regado shareholders will own approximately 32% of the combined company while Tobira shareholders will own approximately 68% of the combined company. The transaction has been approved by the board of directors of both companies and is expected to close in the second quarter of 2015.
Headquartered in South San Francisco, CA, the board of directors of the combined company will have nine representatives, three from Regado and six from Tobira.
Pipeline Update
Tobira’s lead candidate cenicriviroc (CVC) enjoys Fast Track Designation in the U.S. The candidate is being evaluated in a phase IIb trial (CENTAUR) for non-alcoholic steatohepatitis (NASH).
Meanwhile, a Tobira investor syndicate will be investing up to $22 million in the combined company, which is expected to fund the CVC development program through the completion of the phase IIb program. The resultant company is expected to have a cash balance of $60 million.Top-line data from the CENTAUR study is expected in the second quarter of 2016.
Our Take
Regado was on the lookout for strategic alternatives after the company announced the termination of a phase III study (REGULATE-PCI) on lead candidate Revolixys in Aug 2014 due to safety concerns. Revolixys was being developed for use in patients with a wide variety of acute coronary syndromes, undergoing a percutaneous coronary intervention.
Hence, the proposed merger with Tobira makes sense as both the companies will be able to share their knowledge and expertise. Moreover, Regado’s cash contribution will fund the CVC development program.
Regado Biosciences currently carries a Zacks Rank #1 (Strong Buy). Other favourably-placed stocks in the health care sector include Biodel, Inc. (BIOD), AMAG Pharmaceuticals, Inc. (AMAG) and Alexion Pharmaceuticals, Inc. (ALXN). All three carry a Zacks Rank #1 (Strong Buy).
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