Corautus Genetics and VIA Pharmaceuticals Announce Merger Agreement
Thursday February 8, 8:00 am ET
Focus is on Compounds that Target Inflammation in the Blood Vessel Wall
ATLANTA and SAN FRANCISCO, Feb. 8 /PRNewswire-FirstCall/ -- Corautus Genetics Inc. (Nasdaq: VEGF - News) and VIA Pharmaceuticals, Inc., a privately-held drug development company headquartered in San Francisco, California, today announced they have signed a definitive merger agreement. The merger is expected to create a drug development company focused on compounds that target inflammation in the blood vessel wall as an innovative approach to the treatment of cardiovascular disease.
The combined company's lead product candidate will be VIA-2291, a small- molecule drug that targets inflammation in the blood vessel wall, believed to be a key disease process in atherosclerosis. VIA filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) in the first quarter of 2006 and is currently conducting two Phase II clinical trials of VIA-2291 treating vascular inflammation in patients undergoing Carotid Endarterectomy and patients at risk for recurrent cardiovascular events following Acute Coronary Syndrome.
Richard Otto, Chief Executive Officer of Corautus, said "The Corautus team has spent the past several months reviewing strategic opportunities. The novel therapeutic development program underway at VIA addresses a large cardiovascular patient population. In addition, the substantial support of Bay City Capital, VIA's principal stockholder, and the experience of the VIA management team were key strengths as we evaluated this merger. We are pleased to be making this announcement and to combine our assets with VIA's exciting clinical development plans to develop novel therapeutic treatments for cardiovascular diseases."
Lawrence Cohen, Ph.D., Chief Executive Officer of VIA, said "We are very pleased to combine with Corautus and view this as the beginning of an exciting new chapter in the growth of VIA as an innovative and dynamic biopharmaceutical development company. The proposed transaction will strengthen our financial position and bring significant new shareholders to our strong existing investor, Bay City Capital. VIA is working closely with Corautus and its existing stockholders to maximize the value of our combined companies."
Details of the Proposed Transaction
The merger agreement has been approved by the Boards of Directors of Corautus and VIA. Under the terms of the Agreement, Corautus will issue, and VIA stockholders will receive, shares of Corautus common stock in exchange for their shares of VIA stock. It is expected that VIA stockholders will own approximately 76.4% and existing Corautus stockholders will own approximately 23.6% of the combined company on a pro forma, fully-diluted basis based on the delivery of $12 million of net cash at closing (the actual percentages to be determined based on Corautus's net cash at closing). The merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the U.S. Internal Revenue Code of 1986, as amended. The transaction is subject to Corautus maintaining certain minimum cash levels, as well as certain other customary conditions, including obtaining stockholder approval. Corautus stockholders holding approximately 34% of the outstanding voting stock of Corautus and Bay City Capital holding approximately 89% of the outstanding voting stock of VIA have entered into voting agreements whereby they have agreed to vote their shares in favor of the merger. Prior to closing, VIA intends to apply to have the combined company's common stock approved for initial listing on the NASDAQ Capital Market under the symbol "VIAP". The transaction is expected to close in the second quarter of 2007.
Following the closing of the transaction, Lawrence Cohen, Ph.D., Chief Executive Officer and President of VIA will become Chief Executive Officer and President of the combined company. James G. Stewart, Senior Vice President, Chief Financial Officer of VIA will become the combined company's Chief Financial Officer. Oye Olukotun, MD, MPH, FACC, Chief Medical Officer of VIA will become Chief Medical Officer of the combined company. The combined company's board of directors is expected to consist of seven directors, consisting of three current directors of VIA, one current director of Corautus and three directors to be named by VIA prior to closing the merger.
Morgan Keegan & Co., Inc. served as financial advisor to Corautus. Lazard Freres & Co. LLC served as financial advisor to VIA. |
