Date: 2016-07-22
Type of information: Company acquisition
Acquired company: Synta Pharmaceuticals (USA - MA)
Acquiring company: Madrigal Pharmaceuticals (USA - PA)
Amount:
Terms: * On July 22, 2016, Madrigal Pharmaceuticals, a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapeutic candidates for the treatment of cardiovascular, metabolic and liver diseases, announced the completion of its merger with Synta Pharmaceuticals , effective as of July 22, 2016. Prior to the closing of the merger, Synta completed a one-for-35 reverse stock split. As a result of the reverse stock split, every 35 shares of Synta common stock outstanding immediately prior to the merger were combined and reclassified into one share of Synta common stock. No fractional shares are being issued in connection with the reverse stock split. Instead, cash, based on the closing price of Synta common stock on The NASDAQ Capital Market on July 21, 2016, will be issued in lieu of fractions of shares. The holders of shares of Madrigal common stock outstanding immediately prior to the merger received 0.1593 shares of Synta common stock in exchange for each share of Madrigal common stock in the merger. The exchange ratio reflects the one-for-35 reverse stock split. Following the reverse stock split and the merger, the combined company has approximately 11.3 million shares outstanding. In connection with the merger, Synta changed its name to Madrigal Pharmaceuticals, Inc. The combined company will commence trading on a post-reverse stock split basis upon the opening of trading on July 25, 2016 on the NASDAQ Global Market under the symbol “MDGL.” The combined company will operate under the leadership of Paul A. Friedman, M.D., Chief Executive Officer of Madrigal; Rebecca Taub, M.D., Chief Medical Officer, Executive Vice President, Research & Development and Director of Madrigal; and Marc R. Schneebaum, Chief Financial Officer of Madrigal. The board of directors of the combined company is comprised of six representatives: five directors designated by Madrigal, Dr. Friedman, Dr. Taub, Fred Craves, Ph.D., Kenneth Bate and David Milligan, Ph.D., and one director designated by Synta, Keith Gollust. A seventh director designee has not been determined and it is anticipated that such position will be designated by the Synta and Madrigal designees identified above. Dr. Friedman is the new chairman of the board. Madrigal’s corporate headquarters is located in Fort Washington, Pennsylvania. * On April 14, 2016, Synta Pharmaceuticals and Madrigal Pharmaceuticals announced that they have entered into a definitive merger agreement under which Madrigal will merge with a wholly-owned subsidiary of Synta in an all-stock transaction. The Merger will create a company focused on the development of novel small-molecule drugs addressing major unmet needs in cardiovascular-metabolic diseases and non-alcoholic steatohepatitis (NASH). Madrigal’s lead compound, MGL-3196, is a Phase 2-ready once-daily, oral, liver-directed selective thyroid hormone receptor-ß (THR-ß) agonist for the treatment of NASH and heterozygous and homozygous familial hypercholesterolemia (HeFH, HoFH). Upon closing of the transaction, the combined company will be named Madrigal Pharmaceuticals, and Paul A. Friedman, M.D. will become Chairman and Chief Executive Officer. Under the terms of the merger agreement, Synta will acquire all outstanding shares of Madrigal in exchange for approximately 253.9 million newly issued shares of Synta common stock. Upon completion of the proposed acquisition, it is anticipated that existing Synta shareholders will own 36.0% of the combined company and Madrigal shareholders will own 64.0% of the combined company. The transaction has been approved by the boards of directors of both companies and the shareholders of Madrigal. The merger is expected to close by the end of the third quarter of 2016, subject to customary closing conditions, including approval of the merger by the shareholders of Synta. An investor syndicate that includes Bay City Capital, Fred Craves, Ph.D., Founder of Bay City Capital, and SQN LLC, a corporation held by Dr. Friedman and Rebecca Taub, M.D., has committed to invest up to $9 million in Madrigal prior to the closing of the Merger. The combined company intends to use these proceeds, in addition to Synta’s cash balance at the closing of the merger, to fund the development of MGL-3196 through Phase 2 clinical studies in NASH, HeFH and HoFH.
Details: The new Madrigal Pharmaceuticals company has more than $40 million in cash to advance its research and development efforts, including the clinical development of MGL-3196, Madrigal’s lead product candidate. MGL-3196 is a Phase 2-ready once-daily, oral, liver-directed selective thyroid hormone receptor-ß (THR-ß) agonist for the treatment of NASH and heterozygous and homozygous familial hypercholesterolemia (HeFH, HoFH). It was designed to specifically target receptors in the liver involved in metabolism and cholesterol regulation, and avoid side effects associated with thyroid hormone receptor activation outside the liver, including those mediated by THR-? receptors. In two week studies in humans MGL-3196 has been shown to reduce lipids: 30% for LDL cholesterol; 28% for non- high density lipoprotein (HDL) cholesterol; 24% for Apolipoprotein B, and up to 60% reduction in triglycerides. NASH in humans is a condition in which thyroid receptor-ß activity is diminished. MGL-3196 reduces lipotoxicity associated with NASH and in NASH preclinical models, MGL-3196 potently reduces hepatic triglycerides and markers of inflammation and fibrosis. MGL-3196, in-licensed from Roche Pharmaceuticals, has completed single, multi-ascending dose and drug interaction studies in humans in which the compound demonstrated a favorable safety profile at all doses tested.
Related: Cardiovascular diseases Metabolic diseases Liver diseases
