Constellation Alpha Capital Corp. (“Constellation”, NASDAQ: CNAC), a publicly-traded special purpose acquisition company, and DermTech Operations, Inc. (formerly known as DermTech, Inc.) (“DermTech”), a global leader in precision dermatology enabled by a non-invasive skin genomics platform, announced today that they have completed their previously announced business combination. The business combination was approved by Constellation’s stockholders on August 27, 2019 with more than 90% of the voted shares in favor of the business combination. Shortly following the completion of the business combination, Constellation changed its name to DermTech, Inc. and effected a one-for-two reverse stock split of its common stock. Beginning on August 30, 2019, Constellation’s common stock and warrants will continue trading on the Nasdaq Capital Market under the ticker symbols “DMTK” and “DMTKW,” respectively.
Constellation’s business combination with DermTech was funded through a combination of Constellation shares, proceeds received from a private sale of Constellation stock at a split-adjusted price of $6.50 per common share, and cash remaining in Constellation’s trust account after giving effect to stockholder redemptions. As a result of the business combination, the combined company (the “Company”) has access to approximately $29 million of gross capital, exceeding the $15 million closing cash requirement previously announced. Participating investors included experienced life sciences investors such as RTW Investments, HLM Venture Partners, Irwin and Gary Jacobs, the founding family of Qualcomm, Inc., and two institutional investors each with over $10 billion in assets under management.
Immediately following the completion of the business combination, all of Constellation’s officers and directors resigned. DermTech’s senior management has been appointed to serve in their current roles at the Company, and all of the members of DermTech’s board have been appointed to the Company’s board. In particular, Dr. John Dobak, CEO of DermTech, will serve as CEO of the Company, and Matthew Posard, Chairman of DermTech’s board, will serve as Chairman of the Company’s board. In addition, Enrico Picozza of HLM Venture Partners has been appointed as a director of the Company’s board.
DermTech’s flagship product, the Pigmented Lesion Assay (PLA), enables non-invasive and early detection of melanoma using genomic analysis. Studies to date have shown that the PLA test enhances the early detection of melanoma with a higher diagnostic performance than biopsy, the pathology standard of care. These studies have also shown that the PLA test reduces unnecessary surgical procedures ten-fold and lowers the cost per melanoma diagnosed by six-fold. There are more cases of skin cancer detected in the U.S. than all other cancers combined. Each year, up to 15 million surgical biopsies are conducted in the U.S. to detect approximately five million cases of melanoma and basal and squamous cell carcinoma. The Company expects a Local Coverage Determination (LCD) from Medicare’s MolDX program, along with product pricing, to be finalized by the end of 2019.
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John Dobak, M.D., CEO of DermTech, commented, “We are extremely pleased to complete this transaction and are grateful for the tremendous work of all parties on both sides to make this happen. We are excited to expand our effort to bring our novel product to patients and providers across the U.S., and to address a significant unmet need in medicine by improving the early detection of melanoma. We believe that approximately 3.5 million pigmented lesions are assessed for melanoma each year by surgical biopsy. Our platform has the potential to greatly enhance this assessment by helping to find melanoma at earlier stages without requiring surgical incisions. We look forward to scaling our commercial effort and using our platform to deliver additional transformative products to the practice of dermatology.”
Rajiv Sarman Shukla, Chairman and CEO of Constellation, commented, “We are excited to bring this opportunity to our shareholders for three reasons. One, the molecular diagnostics sector has meaningfully outperformed the traditional pathology sector over the last two years. Two, in addition to a deep pipeline of new technologies, DermTech has developed PLA, a clinically proven test that is significantly superior to surgical biopsy in terms of patient comfort, specificity and sensitivity. Three, there is a significant near-term value creation opportunity linked with anticipated LCD and product pricing decisions as well as a significant long-term value creation opportunity linked with scale-up of its commercial footprint and sales led by a very experienced and competent Management team.”
Cowen and Company, LLC acted as financial and capital markets advisor. Greenberg Traurig, LLP served as legal advisor to Constellation for the business combination, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. acted as legal advisor to DermTech for the business combination.
Date: September 03, 2019
Source: Business Wire
