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Biotech / Medical : Welcome to the POTP board, the DPP-IV company -- Ignore unavailable to you. Want to Upgrade?

To: rkrw who wrote (89)	1/28/2008 7:06:15 AM
From: rkrw	Respond to of 90

Point about to become Dara. Tiny Dara going public by crawling into another biotechTriangle Business Journal - by Frank Vinluan Steve Wilson Dara’s employees include, from left, Lynn Morris, Controller Ann Rosar, project leader Diana Severyse-Stevens, Chief Scientific Officer John Didsbury, Karen Miller and project leaders Mary Kay Delmedico and Linda Jett. View Larger Related News Biolex files for IPO, eyes $70M [Raleigh/Durham] N.C. State hires head of tech transfer [Raleigh/Durham] Carlisle launches new fund, going for $150M [Raleigh/Durham] Fireline parent faces scrutiny by the Feds [Tampa Bay] Manufacturer adds bite to job market [Tampa Bay] RALEIGH - The Triangle will welcome its newest publicly traded biotechnology company by the end of January, as Raleigh's Dara BioSciences joins with Point Therapeutics, a Massachusetts-based public company, in a reverse merger. Dara will hold a shareholder meeting Jan. 29 to approve the merger. Point stockholders will meet in Boston on Jan. 28. The companies expect to complete the deal by Jan. 30. The company has applied to the Nasdaq Capital Market to trade under the ticker DARA. The merger would pair Dara, a young Triangle company, with once-promising Point, which all but shut down last summer after the U.S. Food and Drug Administration halted phase III trials of its lung cancer drug, talabostat. Neither company has products that are commercially available. Dara focuses on drugs to treat metabolic diseases, such as diabetes, and central nervous system disorders. Dara CEO Richard Franco says the company's management and board of directors had been discussing options for going public over the past year and a half. He says that although Dara considered an initial public offering, the reverse merger offers liquidity for Dara shareholders while also bringing to Dara more drugs for its portfolio. Franco remains upbeat about talabostat's prospects. "We are exploring possibilities of that drug in other areas of cancer," Franco says. He adds that the company will meet with cancer experts in March to discuss how to proceed with the drug. Point's stock has been trading for pennies, and the company has received several notices that it does not meet listing requirements. But last month, the Nasdaq allowed Point to continue to be listed subject to conditions, including completion of the merger. The merger's proposed reverse stock split would be at a ratio of between 1 to 20 and 1 to 50, according to Point's proxy statement. The final ratio will be determined by Point's board of directors at the annual meeting immediately before the merger. Jim Verdonik, a Raleigh lawyer who has advised companies on reverse mergers, says the method of going public is increasingly finding favor with smaller companies. Many smaller investment banks that used to underwrite smaller IPOs have been acquired by larger investment banks. The bigger banks don't want to bother with smaller IPOs. "You used to be able to go public and raise $20 million," Verdonik says. "You can't do that anymore. It's too small." These are uncertain times for a small biotech company to enter the public markets, says Sherrill Neff, founding partner of Quaker BioVentures, a Philadelphia venture capital firm that invests exclusively in life sciences companies. Neff says the subprime mortgage crisis and talk of a recession can dissuade investors. He notes that Pittsboro-based Biolex filed to go public in August but now appears to be waiting to see how market conditions develop. Venture capitalists have been finding liquidity in mergers and acquisitions rather than IPOs, Neff says. Large pharmaceutical companies have cash in reserve and product pipelines to fill. They fill those pipelines by buying up smaller biotech companies. For his part, Franco hopes that Dara's products will fill the pipelines of the large biotech companies through licensing agreements. The merger would mark the second reverse merger for Point. In 2002, then privately held Point merged with HMSR Inc.,a Marlborough, Mass., company. Point peaked at 26 employees in 2006. Last July, Point laid off all but two. No employees or executives from Point will be coming to Dara, whose 10 employees will remain in Raleigh.