Date: 2014-10-30
Type of information: Company acquisition
Acquired company: Transcept Pharmaceuticals (USA - CA)
Acquiring company: Paratek Pharmaceuticals (USA - MA)
Amount:
Terms: * On October 30, 2014, Paratek Pharmaceuticals and Transcept Pharmaceuticals announced the two companies have completed their merger effective as of October 30, 2014. Immediately prior to the merger, Paratek received gross proceeds of $93 million in new investment from a combination of certain current and new investors in Paratek, including Abingworth LLP, Aisling Capital, The Baupost Group, HBM Healthcare Investments, Interwest Ventures, Omega Funds, Roumell Asset Management and other highly regarded institutional investors. Together with approximately $14 million in available, pre-merger cash on Transcept's balance sheet, the combined company has approximately $108 million in cash available before the payment of transaction and other fees. Prior to the merger, Transcept effected a 12-1 reverse stock split of its outstanding common stock. As a result of the reverse stock split, every 12 shares of Transcept common stock outstanding immediately prior to the merger were combined and reclassified into one share of Transcept common stock. No fractional shares are being issued in connection with the reverse stock split. Instead, cash, based on the closing price of Transcept common stock on The NASDAQ Global Market on October 30, 2014, will be issued in lieu of fractions of shares. The holders of shares of Paratek common stock outstanding immediately prior to the merger received 0.0675 shares of Transcept common stock in exchange for each share of Paratek common stock in the merger. The exchange ratio reflects the 12-1 reverse stock split. Following the $93 million financing, the reverse stock split and the merger, the combined company has approximately 14.4 million shares outstanding. Also in connection with the merger, Transcept changed its name to Paratek Pharmaceuticals, Inc. The combined company will commence trading as of October 31, 2014 on The NASDAQ Global Market under the symbol "PRTK". * On July 1, 2014, Transcept Pharmaceuticals and Paratek Pharmaceuticals announced that they have entered into a definitive merger agreement under which the stockholders of Paratek will become the majority owners of Transcept and the operations of Transcept and Paratek will be combined. As part of the proposed transaction, new investors (including The Baupost Group, Abingworth LLP, and other institutional investors); certain Transcept stockholders (including InterWest Ventures and Roumell Asset Management); and certain Paratek stockholders (including Omega Funds, HBM Healthcare Investments and Aisling Capital) will invest approximately $93 million in the combined organization. Paratek stockholders will receive newly issued shares of common stock of Transcept in connection with the merger contemplated by the merger agreement. Transcept will issue approximately 167.5 million new shares of its common stock to Paratek stockholders under the exchange ratio formula defined in the merger agreement. Upon the closing of the merger, existing Paratek equity holders are expected to own approximately 37.9 percent of Transcept, the persons investing in Paratek as of immediately prior to the closing of the merger are expected to own approximately 51.7 percent of Transcept, and existing Transcept equity holders are expected to own approximately 10.4 percent of Transcept, each on a fully-diluted basis. The exchange ratio is defined in the merger agreement and is subject to potential adjustments. The executive officers of Transcept will resign from their positions with Transcept upon the closing of the merger, and the executive officers of Paratek will assume their respective positions in Transcept. Paratek Pharmaceuticals, Inc. announced that Michael F. Bigham, Partner at Abingworth LLP, has been appointed as Chairman of the Board of Directors and Chief Executive Officer. In addition, Dr. Evan Loh, Chief Medical Officer (CMO) at Paratek, has been promoted to President and CMO and will continue to serve on the Board of Directors. Following the closing of the merger, the Board of Directors of Transcept is expected to consist of a total of seven members, two of whom will be designated by Transcept prior to the closing of the merger, and five of whom will similarly be designated by Paratek (and which will include the Chief Executive Officer of the combined organization). The boards of directors of both Transcept and Paratek have unanimously approved the proposed transaction, which is subject to customary closing conditions, including approval by the stockholders of each of Transcept and Paratek. Transcept stockholders holding approximately 43 percent of its outstanding common stock have agreed to vote in favor of the transaction, and a majority of Paratek stockholders, have also agreed to vote in favor of the transaction. Subject to regulatory approvals and customary closing conditions, the transaction is currently expected to close during the second half of 2014. If the transaction is consummated, Transcept\'s name will be changed to Paratek Pharmaceuticals, Inc., and Transcept intends to apply to change its ticker symbol on The NASDAQ Global Market to \"PRTK\". Transcept was advised in the transaction by Leerink Partners, LLC and Paratek was advised by Ladenburg Thalmann & Co. Latham & Watkins LLP served as legal counsel to Transcept and Pepper Hamilton LLP served as legal counsel to Paratek. Cooley LLP and Ropes & Gray LLP served as legal counsels to certain investors.
Details: This merger wll result in NASDAQ-listed biopharmaceutical company whose lead asset is a novel Phase 3-ready, oral and intravenous antibiotic drug candidate designed to address the treatment needs of patients with serious community-acquired bacterial infections. Paratek\'s lead product candidate, omadacycline, is a novel tetracycline-derived, broad-spectrum antibiotic being developed in both oral tablet and intravenous formulations for use as a first-line monotherapy antibiotic for acute bacterial skin and skin structure infections (ABSSSI), community-acquired bacterial pneumonia (CABP), urinary tract infections (UTI) and other serious community-acquired bacterial infections, particularly when antibiotic resistance is of concern to prescribing physicians. Omadacycline has received Qualified Infectious Disease Product (QIDP) designation by the FDA for both the oral and intravenous formulations in all three of these infectious disease categories. Omadacycline has Special Protocol Assessment agreements with the FDA for the phase 3 trials planned in ABSSSI and CABP. Paratek\'s second product candidate, WC 3035, is a novel tetracycline-derived compound, with dual narrow-spectrum antibacterial and potent anti-inflammatory activity, for the treatment of acne and rosacea in the community setting. Paratek has licensed rights to WC 3035 for the treatment of acne and rosacea in the United States to a subsidiary of Actavis (formerly Warner Chilcott), while retaining rights in the rest of the world. Actavis is responsible for the clinical development of WC 3035 for the treatment of acne in the United States. A phase 3 program in moderate-severe acne is expected to be initiated in the second half of 2014 for WC 3035. Transcept Pharmaceuticals\' remaining product development candidate is TO-2070, a novel rapidly absorbed treatment for acute migraine incorporating dihydroergotamine (DHE) as the active drug, which Transcept has developed through the completion of preclinical safety studies but has not initiated a Phase 1 human pharmacokinetic study. Transcept developed Intermezzo® from concept to its approval by the FDA in 2011. Purdue holds commercialization and development rights for Intermezzo in the United States.
Related: Infectious diseases Neurosciences
