Renovacor, Inc. (“Renovacor” or the “Company”), an early-stage biotechnology company developing AAV-based gene therapies for devastating cardiovascular and central nervous system (CNS) diseases resulting from BAG3 gene dysfunction, and Chardan Healthcare Acquisition 2 Corp. (NYSE: CHAQ) (“CHAQ”), a special purpose acquisition company or SPAC, sponsored by affiliates of Chardan Capital Markets (“Chardan”), announced today they have entered into a definitive business combination agreement. Upon closing of the transaction, CHAQ will be renamed Renovacor, Inc. and its common stock is expected to be listed on NYSE under the ticker symbol “RCOR” (the “Combined Company”).
The Combined Company is expected to receive gross proceeds of up to $116 million, funded by approximately $86 million held in CHAQ’s trust account (assuming no redemptions are effected) and a common stock PIPE of $30 million at $10.00 per share. A group of premier investors has committed to participate in the transaction through a common stock PIPE and sponsor support agreements, including Chardan Healthcare Investments (an affiliate of Chardan), RTW Investments LP, Surveyor Capital (a Citadel company), Affinity Asset Advisors, Altium Capital, Ikarian Capital, Sio Capital Management, South Ocean Capital Management, and certain existing Renovacor stockholders including Acorn Bioventures, Longview Ventures (an affiliate of Broadview Ventures) and Innogest Capital.
Proceeds from the business combination and PIPE are expected to provide Renovacor with resources to advance its lead rare disease gene therapy program into phase I/II clinical development and establish a pipeline of preclinical research programs to be progressed towards IND-enabling studies.
The Combined Company will be led by President and Chief Executive Officer Magdalene Cook, M.D. The boards of directors of both Renovacor and CHAQ have unanimously approved the proposed transaction. Completion of the transaction, which is expected in the second quarter of 2021, is subject to the approval of CHAQ’s stockholders and the satisfaction or waiver of certain other customary closing conditions.
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Renovacor’s lead program is an adeno-associated virus (AAV)-based gene therapy targeting BAG3-associated dilated cardiomyopathy (“BAG3 DCM”), a disease with high unmet medical need and an average age of onset of 38 years and less than 50% survival 5 years after disease onset. Renovacor anticipates submitting an IND for BAG3 DCM in mid-2022 and beginning the phase I/II clinical trial shortly thereafter. The Company is concurrently advancing other preclinical pipeline programs targeting additional BAG3-associated diseases, initially focused on cardiovascular and CNS therapeutic areas.
“Renovacor is focused on bringing one of the first genetically driven precision medicines to cardiovascular disease, starting with patients suffering from dilated cardiomyopathy due to BAG3 gene mutation,” said Magdalene Cook, M.D., CEO of Renovacor “We appreciate the strong support from new, leading life science investors as well as certain of our existing stockholders committed to the business combination and our mission to deliver unique therapies with life-changing potential to patients.”
Jonas Grossman, President and Chief Executive Officer of CHAQ, stated: “Our aim in creating CHAQ was to partner with a novel and disruptive biotechnology company that would meaningfully benefit from a public listing, putting the capital to productive use through groundbreaking clinical work to help patients in need, and whose assets and platform technology could yield significant growth and robust long-term returns for our stockholders. We firmly believe Renovacor meets all of our selection criteria and is led by an exceptional leadership team.”
Gbola Amusa, M.D., C.F.A, Executive Chairman and Chief Science Officer of CHAQ, added, “We believe that cardiovascular disease is the next disease area to emerge for gene therapies. Given the strength of Renovacor’s science, which builds on more than a decade of foundational research by the Company’s founder, Arthur M. Feldman, MD, Ph.D., we believe Renovacor is well-positioned with a first-of-its-kind gene replacement for a devastating cardiovascular disease.” Dr. Feldman, a Laura H. Carnell Professor of Medicine at the Lewis Katz School of Medicine at Temple University, noted that Renovacor’s AAV-based approach, if successful, has the potential to provide clinical benefit to tens of thousands of BAG3 DCM subjects across the United States and Europe.
“We are committed to Renovacor’s future development and believe the business combination, new investors, and financing will position Renovacor well to advance the BAG3 DCM program into phase I/II clinical trial and build out the research and development pipeline to explore other BAG3-associated cardiovascular and CNS indications,” said Thomas Needham of Broadview Ventures and a member of the Renovacor Board of Directors. Isaac Manke, Ph.D., of Acorn Bioventures added: “We aim to support advanced therapeutics companies that have the potential to provide single-administration curative therapies in disease areas with few effective treatment options. We believe Renovacor is founded on strong science that has the potential to translate to clinical benefits in a number of disease areas with meaningful market opportunities.”
Chardan is acting as the M&A advisor and Placement Agent for CHAQ. Latham & Watkins LLP is the legal counsel for CHAQ. Troutman Pepper Hamilton Sanders LLP and Morgan Lewis & Bockius LLP are the legal counsels for Renovator.
Source: Biospace