NitroMed and Archemix to Merge
Last month, when Lexington, MA-based biotech company NitroMed announced it was selling off all the assets related to its only drug product, CEO Kenneth M. Bate said the company would concentrate on “combining, through one or more strategic transactions, with companies that have significant unrealized value or growth potential.”
Apparently it didn’t take long for Bate to find that partner: the publicly traded NitroMed (NASDAQ:NTMD) today announced it plans to merge with Archemix, a private Cambridge biotech company exploring new ways to treat cancer, inflammatory conditions, and other illnesses with short pieces of RNA or DNA known as aptamers. Completion of the deal would mean that Archemix—which pulled a planned IPO when the market for such offerings went sour early this year–had found an alternative path to the public market.
Ryan took a look at Archemix last month, just a few days before NitroMed’s asset sale announcement, when the company signed a licensing and options deal with Eli Lilly (NYSE:LLY) that gave the Indianapolis-based drugmaker options to evaluate Archemix’s technology and gain exclusive licenses to aptamers for up to two disease targets. Archemix itself has not yet received FDA approval for any of its treatments, but is focused initially on developing drugs to treat blood disorders.
Under the all-stock deal announced today, the merged company will retain the Archemix name and will be based in Archemix’s current offices, but NitroMed’s Bate will become president and CEO. Archemix shareholders will own about 70 percent of the new company, while NitroMed’s stockholder will hold 30 percent. The firm plans to apply to relist its shares of the combined company on NASDAQ, under the symbol “ARCH,” the symbol Archemix planned to use when it filed for an IPO worth up to $69 million in July of 2007.
Assuming the previously announced sale of NitroMed’s assets goes through, “it is estimated that cash and cash equivalents for the combined company will be approximately $50-60 million at closing,” according to the statement.