Tuesday November 1, 2016 0 comments
BOULDER -- Miragen Therapeutics and California-based Signal Genetics, Inc. (Nasdaq: SGNL) today announced they have entered into a definitive merger agreement in which the stockholders of miRagen are currently estimated to become holders of approximately 96% of Signal’s outstanding common stock on a fully-diluted basis.
The proposed merger remains subject to certain conditions, including approval by Signal’s and miRagen’s stockholders.
In conjunction with the proposed merger, an investor syndicate comprised of existing miRagen investors and new investors has committed to invest approximately $40 million in miRagen immediately prior to closing of the proposed merger.
The investor syndicate includes Fidelity Management and Research Company, Brace Pharma Capital, Atlas Venture, Boulder Ventures, JAFCO Co., Ltd., MP Healthcare Venture Management, MRL Ventures (a venture fund of Merck, known as MSD outside the United States and Canada), Remeditex Ventures, and others.
The proposed merger will create a clinical-stage, biopharmaceutical company developing proprietary micro RNA-targeted clinical product candidates addressing hematological malignancies and pathological fibrosis and pre-clinical product candidates addressing cardiovascular and neurodegenerative diseases, the companies said.
The total cash balance of the combined company upon the closing of the proposed merger and the financing is expected to exceed $50 million.
“We believe microRNA targeting therapeutics have the potential to address complex diseases with high unmet medical need and miRagen will be well positioned to execute on our programs.” said William S. Marshall, Miragen president and CEO.
“We believe proceeds from the concurrent financing will allow us to advance our lead assets in hematological malignancy and pathological fibrosis into later stage clinical evaluation.”
“We have chosen to combine with miRagen following an extensive review of strategic alternatives and a thorough process because we believe the proposed merger provides Signal stockholders with an opportunity for value appreciation,” said Samuel D. Riccitelli, Signal president and CEO.
Existing stockholders of miRagen, as well as investors in miRagen’s concurrent financing, will receive newly issued shares of Signal common stock in connection with the proposed merger.
On a pro forma and fully-diluted basis for the combined company, following the closing of the proposed merger, (a) current Signal stockholders are expected to own approximately 4%, (b) current miRagen stockholders are expected to own approximately 69% (excluding shares issued to them in the concurrent financing), and (c) the investors participating in the concurrent financing are expected to own approximately 27% (excluding shares previously held by them).
Signal’s ownership percentage includes shares expected to be issued concurrent with the proposed merger upon the conversion of existing Signal debt, which is subject to Signal stockholder approval.
If the proposed merger closes before Jan. 31, 2017, approximately 278,213 shares of Signal common stock would be issued upon the debt conversion.
The proposed merger has been unanimously approved by the boards of directors of both companies.