Renovacor reaches reverse merger deal

Renovacor, a US-based gene therapy developer spun out of Temple University, agreed to a reverse merger with special purpose acquisition company Chardan Healthcare Acquisition 2 Corp on Tuesday.
The deal includes $30m of private investment in public equity (Pipe) at $10 a share and, together with approximately $86m held in Chardan’s trust account from its IPO, the combined business will have access to gross proceeds of around $116m.
The Pipe financing is sponsored by Chardan Healthcare Investments, an affiliate of Chardan, RTW Investments, Surveyor Capital, Affinity Asset Advisors, Altium Capital, Ikarian Capital, Sio Capital Management, South Ocean Capital Management, Acorn Bioventures, Longview Ventures and Innogest Capital.
The merger is expected to close in the second quarter of 2021, following which Chardan will rename to Renovacor and trade on the New York Stock Exchange using the ticker symbol RCOR.
Renovacor is working on adeno-associated virus-based gene therapies for cardiovascular and central nervous system diseases.
Its lead asset is aimed at a condition called BAG3-associated dilated cardiomyopathy, which manifests in patients aged 38 on average. Patients face a less than 50% survival rate five years after onset.
Proceeds from the reverse merger will allow Renovacor to advance the programme into phase 1/2 development and establish a pipeline of preclinical candidates. Magdalene Cook will lead the combined business as president and chief executive.
Cook, Thomas Needham of Broadview Ventures and three individuals designated by Renovacor’s board will join Jonas Grossman, CEO of Chardan, and Gbola Amusa, executive chairman and chief science officer of Chardan, to make up the combined business’ board of directors.
Renovacor secured $11m in a series A round co-led by Novartis Venture Fund, the corporate venturing vehicle for drugmaker Novartis, Broadview and BioAdvance in 2019. New Leaf Venture Partners and Innogest Capital also took part in that round.