AmpliPhi Biosciences Corporation, a clinical-stage biotechnology company focused on the development of precisely targeted bacteriophage therapeutics for antibiotic-resistant infections, and C3J Therapeutics, Inc., a private clinical stage biotechnology company focused on the development of novel targeted antimicrobials, today announced that the companies have entered into a definitive agreement under which a wholly owned subsidiary of AmpliPhi will merge with C3J in an all-stock transaction, subject to shareholder approval. The consummation of the merger transaction will result in a combined company that has a diverse clinical-stage pipeline, including a Phase 1/2-ready natural phage candidate targeting bacteremia, as well as a synthetic phage candidate targeting respiratory infections poised to enter Phase 1 development later this year. In addition, the combined company will have an extensive natural phage library and the capability to develop synthetic phage against a wide range of microbial agents.
Certain existing C3J shareholders have committed to invest $10 million in the combined company, subject to customary conditions. The financing will help fund the further development of the combined company’s preclinical and clinical programs and is expected to close immediately following with the completion of the merger. The combined company’s total cash balance following the closing of the merger and contemplated financing is expected to be approximately $18 million.
“We are delighted with the prospect of consummating this merger with AmpliPhi,” said Todd R. Patrick, President and Chief Executive Officer of C3J. “We believe the depth of knowledge that AmpliPhi has developed through human dosing of natural phage therapeutics complements C3J’s capabilities as a leader in the development of synthetic phage through its proprietary phage engineering platform. Synthetic phage offers enhanced antimicrobial properties that improve pharmacology, limit the emergence of phage-resistant bacteria and create potential opportunities for IP protection for best-in-class therapeutics. I believe this merger will create a leading company in the development of targeted bacteriophage therapeutics at a time when key regulatory bodies, including the U.S. Food and Drug Administration and the World Health Organization recognize the imminent threat posed by increased antimicrobial resistance.”
Paul Grint, Chief Executive Officer of AmpliPhi, remarked, “We are committed to advancing this new class of therapeutics, and this merger with C3J will combine complementary assets and capabilities that we believe are in the best long-term interests of each company’s shareholders while addressing the significant unmet needs of patients struggling with multi-drug resistant bacterial infections.”
About the Proposed Transaction
Under the terms of the merger agreement, on a pro-forma basis and after closing of the merger but prior to the closing of the financing, the current C3J securityholders will own approximately 70% of the combined company, while current AmpliPhi securityholders will own approximately 30% of the combined company (on a fully diluted basis but using the treasury stock method and in each case excluding out of the money options and warrants). The pre-financing ownership split was determined by the exchange ratio in the merger agreement, which was based on a $28 million valuation for C3J and a $12 million valuation for AmpliPhi, a premium to the 30-day volume weighted average share price of AmpliPhi. On a proforma basis, after giving effect to the contemplated $10 million financing, current C3J securityholders will own approximately 76% of the combined company and current AmpliPhi securityholders will own approximately 24% of the combined company (on a fully diluted basis but using the treasury stock method and in each case excluding out of the money options and warrants).
The transaction has been unanimously approved by the boards of directors of both companies, and is expected to close in the first quarter of 2019, subject to approval by AmpliPhi shareholders. The transaction is also subject to customary conditions, including the execution of stock purchase agreements by certain existing C3J shareholders who have agreed to invest an additional $10 million into the combined company, subject to customary closing conditions. The investment is expected to close immediately following with the closing of the merger.
Mr. Patrick of C3J will be the Chief Executive Officer of the combined company and Dr. Brian Varnum of C3J will be appointed President and Chief Development Officer. Steve Martin, AmpliPhi’s Chief Financial Officer, will continue to act as the CFO of the combined company. Dr. Grint has agreed to act as a clinical consultant for the combined company. Prior to closing, AmpliPhi will seek stockholder approval to conduct a reverse split of its outstanding shares to satisfy listing requirements of the NYSE American. The combined company is expected to trade on the NYSE American under a new ticker symbol.
Ladenburg Thalmann & Co. Inc. is acting as financial advisor to AmpliPhi and Cooley LLP is acting as legal counsel to AmpliPhi. LifeSci Capital LLC is acting as financial advisor to C3J and Thompson Hine LLP is acting as legal counsel to C3J.
Conference Call Details
The companies plan to hold a joint conference call on Monday, January 14, 2019 at 4:30 pm ET / 1:30 pm PT to discuss the merger details.
The dial-in number in the U.S./Canada is 1-866-652-5200; for international participants, the number is 1-412-317-6060. For all callers, please refer to Conference ID 10127534.
Live webcast link: https://event.webcasts.com/starthere.jsp?ei=1226834&tp_key=f4991910f3
A replay of the conference call will be available for seven business days beginning about two hours after the conclusion of the live call, by calling 1-877-344-7529 toll-free (from U.S./Canada); 1-412-317-0088 (international callers). For all callers, please refer to Conference ID 10127534.
Date: January 7, 2019
Source: AmpliPhi Biosciences