Article from the Baltimore Business Journal on ther merger:
biz.yahoo.com
bizjournals.com (can't find the article on this site yet)
PharmAthene merges to become public company
Tuesday March 14, 1:06 pm ET
PharmAthene Inc. is merging with SIGA Technologies Inc., a publicly held company, in hopes of becoming a leader in the emerging biodefense market.
As a result of what's known as a reverse merger -- in which a privately held company enters the public market by merging into a smaller public firm -- the combined company will operate under the PharmAthene name, both companies said Tuesday, and will trade on the Nasdaq.
David P. Wright, CEO of PharmAthene, will lead the company. SIGA shareholders will own 32 percent of the combined company, with shareholders in privately held PharmAthene owning the remaining 68 percent.
The deal is expected to close during the second or third quarter, executives said, pending shareholder approval, regulatory approval and other closing conditions. PharmAthene has also agreed to provide SIGA with up to $3 million in financing.
PharmAthene is one of Greater Baltimore's closely watched life sciences companies, backed with $78 million in venture capital -- and under pressure to make its business model work, CEO Wright and company investors said in a recent Baltimore Business Journal story
The federal government, the chief customer for PharmAthene and its competitors making biodefense drugs, has been slow to award multimillion-dollar contracts to fuel new product development.
The awards are critical because big pharmaceutical companies don't see enough of a market in biodefense to channel resources into developing new treatments. A wave of startups has emerged looking to capitalize on the government's Project Bioshield, a 10-year, $6 billion program launched by the Bush administration in 2003 to develop and produce new vaccines and treatments.
Wright said in late January that PharmAthene would need to pull together another financing round during the first half of this year; uncertainty surrounding the government contracts was forcing the company to put on hold plans to pump $8 million into manufacturing.
Operating as a public company -- something Wright has experience with following high-level executive stints with MedImmune and Guilford Pharmaceuticals -- gives PharmAthene access to the capital needed to commercialize drugs, a time-consuming and expensive endeavor.
Wright said in a statement that the deal "will combine PharmAthene's strong development and commercialization capabilities with SIGA's outstanding research capabilities to create an expanded biodefense platform with multiple procurement-stage products and near-term revenue opportunities."
PharmAthene's executive team and about 20 employees reside at the Chesapeake Innovation Center, the homeland security incubator. About 50 more employees are based in Canada. The company's research traces its roots to Harvard University Medical School.
SIGA employs 40 at its New York headquarters and at a research facility in Oregon. PharmAthene spokeswoman Stacey Jurchison said the company doesn't anticipate layoffs, since most of SIGA's employees work in research and development.
SIGA (NASDAQ: SIGA - News) is a small biotech player -- its market capitalization is $27 million -- but one with a promising research pipeline targeting smallpox and hemorrhagic fever viruses. Its smallpox drug is expected to begin human testing later this month, executives said.
PharmAthene's lead drug is Valortim, a monoclonal antibody used to treat anthrax infection. PharmAthene acquired Nexia Biotechnologies, a Canadian company developing a chemical nerve agent treatment, last March in an $18 million deal.
Published March 14, 2006 by the Baltimore Business Journal |
