Regado Biosciences, a spin-out from Duke University, is to merge with San Francisco-based Tobira Therapeutics.
The move signifies an end to the decline of Regado. Launched in 2001, the firm went public in 2013, raising $43m at $4 per share – $1 below the company’s targeted $5 per share. Shares crashed 60% on 3 July 2014 when the company had to halt its clinical trials into a heart surgery drug that widen coronary arteries amongst fears that the drug may trigger allergic reactions as a side effect.
In August last year, the firm was forced to terminate the trial altogether, with the subsequent reaction of shares in the company plummeting towards $1. Shortly after, the company was forced to drop 60% of its workforce.
Under the terms of the deal, Regado’s current investors will own a third of the new venture. Regado will be rebranded as Tobira, and current Tobira management will take over running the company. Tobira’s backers will put $22m into the merger, giving the new combined firm $60m in cash. Tobira will also become a public company, and will be using funds to develop its drug targeting liver disease.
Michael Metzger, CEO at Regado, said: “Following an extensive and thorough review of strategic alternatives, we believe the proposed merger with Tobira provides the opportunity for substantial returns for Regado shareholders. The merged company will derive a significant advantage from the extensive clinical, commercial and transactional expertise of the combined board and management teams. We are optimistic that the strength of the leadership team, coupled with the cash Regado will contribute to the merger, will enable CVC to reach significant value inflections in the near term.”