[Updated: 11:40 am] Theraclone Sciences is likely headed for the public markets, but not through the IPO route.
Seattle-based Theraclone, the developer of targeted antibody drugs, said today it has agreed to a merger with Annapolis, MD-based PharmAthene (NYSE MKT: PIP). The combined company will be headquartered in Seattle and led by CEO Cliff Stocks, while PharmAthene CEO Eric Richman will serve on the board, Theraclone said in a statement today. The combined company plans to maintain operations in Annapolis as well, according to a spokeswoman for Theraclone.
No financial details were included in today’s statement on the deal, but PharmAthene’s market valuation was more than $80 million before today, and PharmAthene plans to issue shares so that Theraclone investors own 50 percent of the combined company. The deal is subject to shareholder and regulatory approval.
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.