By combining operations, Theraclone and PharmAthene will have expertise in antibody drug development and vaccines. Theraclone has two antibody candidates in clinical trials—one for cytomegalovirus and another for influenza. PharmAthene has two anthrax-related product candidates in clinical trials, although the company has been dogged by litigation over a contract with Siga Technologies. Richman, PharmAthene’s CEO, said in a statement that merging with Theraclone should help get the company over that hurdle. PharmAthene told investors it had about $12.9 million of cash in the bank at the end of March in its most recent quarterly report.
“As a stronger company, with expanded access to non-dilutive funding, we expect to be solidly financed through resolution of the SIGA litigation,” Richman said.
“By combining PharmAthene’s strong vaccine and biologics development capabilities and government contracting experience, with our clinical antibody candidates and novel discovery platform we are establishing a premier biologics organization with multiple product candidates possessing significant near-and longer-term revenue potential in high-value commercial markets,” Stocks said in a statement.
PharmAthene has about 50 employees, and Theraclone has 34, according to a spokeswoman for Theraclone. The companies expect the merger to pass a regulatory review by the end of the year.
[Update] The merged company will stick with the name PharmAthene, and continue being traded on the NYSE MKT exchange, Richman said on a conference call this morning with investors. Officials from PharmAthene and Theraclone declined to discuss what financial valuation is being placed on Theraclone as part of the deal, although more details will be forthcoming in merger proxy filings sent to shareholders.
Merger makes sense. Increases toolkit for long term corporate mission.
Bad news for SIGA as it further releases the now nearly vanished hope that PIP would go under before they could successfully conclude their litigation with SIGA. Classic story. SIGA was in the wrong and knew it, put together a story and figured they could outlast the weak PIP by dragging litigation on forever. Strategy worked for a while. But fact story is pretty one-sided against SIGA. Coming in very late, I looked over the facts, saw that clearly PIP would win and bet heavily accordingly. Ironically all the shorts had driven the PIP price down so far that it de-risked the investment further and markedly increased upside. All good. It is not often that you can look at an investment where the outcome is so clear-cut likely to be predictable.
The effect of the merger is such as to lead me to think about sticking with PIP after the suit finally settles out in their favor as the future looks bright. Lots of bad guys with WMD out there so the market will be theirs. Merger gives them the tools to develop better stuff and potentially to diversify to therapeutics. Interesting.
Upon the completion of acquisition/merger with Theraclone , there will be approximately
$28 million cash/US Govt aact. receivables on hand---should last for more than a year
without any new equity financing---hopefully Siga litigation will be resolved by then---