– Combined Company Well-Funded to Generate Data
from Multiple Phase 2 Studies –
– Paul A. Friedman, M.D. Named Chairman and
Chief Executive Officer of Combined Company –
– Companies to Host Conference Call and Webcast
Today, April 14, at 8:30 AM ET –
Synta Pharmaceuticals Corp. (“Synta”) (NASDAQ:SNTA) and Madrigal
Pharmaceuticals, Inc., a privately-held company (“Madrigal”), today
announced that they have entered into a definitive merger agreement
(the “Merger”) under which Madrigal will merge with a wholly-owned
subsidiary of Synta in an all-stock transaction. The Merger will
create a company focused on the development of novel small-molecule
drugs addressing major unmet needs in cardiovascular-metabolic
diseases and non-alcoholic steatohepatitis (NASH). Madrigal’s lead
compound, MGL-3196, is a Phase 2-ready once-daily, oral,
liver-directed selective thyroid hormone receptor-ß (THR-ß) agonist
for the treatment of NASH and heterozygous and homozygous familial
hypercholesterolemia (HeFH, HoFH). Upon closing of the transaction,
the combined company will be named Madrigal Pharmaceuticals, and
Paul A. Friedman, M.D. will become Chairman and Chief Executive
Officer.
Under the terms of the merger agreement, Synta will acquire all
outstanding shares of Madrigal in exchange for approximately 253.9
million newly issued shares of Synta common stock. Upon completion
of the proposed acquisition, it is anticipated that existing Synta
shareholders will own 36.0% of the combined company and Madrigal
shareholders will own 64.0% of the combined company. The
transaction has been approved by the boards of directors of both
companies and the shareholders of Madrigal. The merger is expected
to close by the end of the third quarter of 2016, subject to
customary closing conditions, including approval of the merger by
the shareholders of Synta.
An investor syndicate that includes Bay City Capital, Fred
Craves, Ph.D., Founder of Bay City Capital, and SQN LLC, a
corporation held by Dr. Friedman and Rebecca Taub, M.D., has
committed to invest up to $9 million in Madrigal prior to the
closing of the Merger. The combined company intends to use these
proceeds, in addition to Synta’s cash balance at the closing of the
merger, to fund the development of MGL-3196 through Phase 2
clinical studies in NASH, HeFH and HoFH.
“Following an extensive review of strategic alternatives,
Synta’s Board of Directors believes that a merger with Madrigal
Pharmaceuticals offers shareholders the most compelling opportunity
for enhancing long-term value,” said Keith R. Gollust, Chairman of
Synta. “Madrigal’s lead compound, MGL-3196, is a selective THR-ß
agonist with a unique lipid lowering profile that has been
validated through early clinical and preclinical studies. The
combined company will be well capitalized with a lead program that
offers both a potentially substantial commercial opportunity in
NASH, and an efficient clinical development plan with commercial
potential in genetic lipid disorders.”
“MGL-3196 is designed to specifically target thyroid hormone
beta receptors in the liver involved in metabolism and cholesterol
regulation, and avoid side effects associated with thyroid hormone
receptor activation outside the liver,” said Dr. Taub, Founder and
Chief Executive Officer of Madrigal. “As a result, and because of
MGL-3196’s observed high liver uptake and high ß-selectivity, it
has a favorable safety profile and did not show adverse findings
observed in chronic animal toxicology studies with a prior thyroid
agonist. Madrigal has designed Phase 2 clinical programs to
establish proof of concepts in both NASH and FH with data readouts
for each program anticipated throughout 2017.”
MTS Health Partners, L.P. and ROTH Capital Partners, LLC served
as financial advisors, and Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. served as legal counsel to Synta and Stradling Yocca
Carlson & Rauth, P.C. served as legal counsel to Madrigal with
respect to the transaction.
Management and Organization
Effective with the signing of the merger agreement, Dr. Friedman
has stepped down from Synta’s Board of Directors and will join
Madrigal as an executive. Pursuant to the merger agreement, Dr.
Friedman, the former Chief Executive Officer of Incyte
Pharmaceuticals, will become Chairman and Chief Executive Officer
of the combined company. Dr. Taub will assume the newly created
role of Chief Medical Officer, Executive Vice President, Research
& Development, following the closing of the Merger.
Additionally, Marc Schneebaum, the current Chief Financial Officer
of Synta, will continue as the Chief Financial Officer of the
combined company. The board of directors of the combined company
will be comprised of seven directors, including five directors of
Madrigal: Dr. Friedman (Chairman); Dr. Taub; Fred Craves, Ph.D.;
and two additional directors who will be designated, and one
current director of Synta: Keith Gollust. There will also be one
additional independent director to be agreed upon by Synta and
Madrigal. The corporate headquarters will be located in the
Philadelphia area.
About MGL-3196
MGL-3196 is an orally administered, small-molecule ß-selective
THR agonist being developed for non-alcoholic steatohepatitis
(NASH) and heterozygous and homozygous familial
hypercholesterolemia (FH) to lower LDL cholesterol, triglyceride
levels and Lp(a). It was designed to specifically target receptors
in the liver involved in metabolism and cholesterol regulation, and
avoid side effects associated with thyroid hormone receptor
activation outside the liver, including those mediated by THR-α
receptors. MGL-3196 is a potent regulator of hepatic triglyceride
metabolism and cholesterol metabolism. In two week studies in
humans MGL-3196 has been shown to reduce lipids: 30% for LDL
cholesterol; 28% for non- high density lipoprotein (HDL)
cholesterol; 24% for Apolipoprotein B, and up to 60% reduction in
triglycerides. NASH in humans is a condition in which thyroid
receptor-ß activity is diminished. MGL-3196 reduces lipotoxicity
associated with NASH and in NASH preclinical models, MGL-3196
potently reduces hepatic triglycerides and markers of inflammation
and fibrosis. MGL-3196, in-licensed from Roche Pharmaceuticals, has
completed single, multi-ascending dose and drug interaction studies
in humans in which the compound demonstrated a favorable safety
profile at all doses tested.
Conference Call and Webcast
Synta and Madrigal will host a conference call and webcast slide
presentation at 8:30 AM ET today to discuss the Merger. The
conference call and presentation can be accessed by logging on to
the “Investors” section of the Synta Pharmaceuticals website,
www.syntapharma.com, prior to the event.
The conference call can also be accessed by dialing (855)
451-4851 (U.S.) or (503) 343-6064 (International). The conference
ID number for the live call is 91034442. For those unable to
join the live call, a replay will be available from 11:30 AM ET on
April 14 through 11:59 PM ET on April 28. To access the replay,
please dial (855) 859-2056 (U.S.) or (404) 537-3406 (International)
and refer to conference ID 91034442.
About Synta Pharmaceuticals Corp.
Synta Pharmaceuticals Corp. is a company that has been
historically focused on research, development and commercialization
of novel oncology medicines that have the potential to change the
lives of cancer patients. In October 2015, Synta terminated its
GALAXY-2 trial of its lead candidate ganetespib and subsequently
discontinued a substantial portion of its research and development
activities relating to ganetespib and its oncology pipeline. The
Company continues to conduct limited activities with respect to
ganetespib, including support for two ongoing
investigator-sponsored clinical trials in ovarian cancer and
sarcoma, and drug candidates from its HDC program, including
STA-12-8666.
Important Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. A definitive proxy statement and a proxy card
will be filed with the SEC and will be mailed to Synta’s
stockholders seeking any required stockholder approvals in
connection with the proposed transactions. BEFORE MAKING ANY VOTING
OR INVESTMENT DECISION, INVESTORS AND STOCKHOLDERS ARE URGED TO
READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT SYNTA MAY FILE WITH
THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders
may obtain, free of charge, copies of the definitive proxy
statement and any other documents filed by Synta with the SEC in
connection with the proposed transactions at the SEC's website
(http://www.sec.gov), at Synta’s website, or by directing written
request to: Synta Pharmaceuticals Corp., 45 Hartwell Avenue,
Lexington, MA 02421, Attention: Wendy Rieder, Esq.
Synta and its directors and executive officers and Madrigal and
its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders
of Synta in connection with the proposed transaction. Information
regarding the special interests of these directors and executive
officers in the merger will be included in the proxy statement
referred to above. Additional information regarding the directors
and executive officers of Synta is also included in Synta’s
Definitive Proxy Statement on Schedule 14A relating to the 2015
Annual Meeting of Stockholders, which was filed with the SEC on
April 30, 2015. This document is available free of charge at the
SEC web site (www.sec.gov), at Synta’s website, or by directing a
written request to Synta as described above.
About Madrigal Pharmaceuticals, Inc.
Madrigal Pharmaceuticals, Inc. is a company focused on the
development of novel compounds for the treatment of
cardiovascular-metabolic diseases and nonalcoholic steatohepatitis
(NASH). The Company’s lead candidate, MGL-3196, is an orally
administered, small-molecule liver-directed ß-selective THR agonist
with high liver uptake for the treatment of NASH and
dyslipidemia/hypercholesterolemia including in heterozygous and
homozygous familial hypercholesterolemia (HeFH, HoFH). For more
information, visit: http://www.madrigalpharma.com.
Cautionary Note Regarding Forward-Looking Statements
Any statements made in this press release relating to future
financial or business performance, conditions, plans, prospects,
trends, or strategies and other financial and business matters,
including without limitation, the potential closing date of the
transaction, the amount of Synta’s net cash at closing, the
anticipated ownership of the combined company, and the prospects
for commercializing any product candidates, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. In addition, when or if used in this press
release, the words “may,” “could,” “should,” “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” “predict” and
similar expressions and their variants, as they relate to Madrigal,
Synta or the management of either company, before or after the
aforementioned merger, may identify forward-looking statements.
Madrigal and Synta caution that these forward-looking statements
are subject to numerous assumptions, risks, and uncertainties,
which change over time. Important factors that may cause actual
results to differ materially from the results discussed in the
forward-looking statements or historical experience include risks
and uncertainties, including the timing and completion of the
merger, the parties’ ability to satisfy the closing conditions of
the Merger Agreement with Madrigal, including the closing condition
that Synta have a minimum net cash amount of $28.5 million, Synta’s
continued listing on NASDAQ, the failure by Madrigal or Synta to
secure and maintain relationships with collaborators, risks
relating to clinical trials; risks relating to the
commercialization, if any, of Madrigal or Synta proposed product
candidates (such as marketing, regulatory, product liability,
supply, competition, and other risks); dependence on the efforts of
third parties; dependence on intellectual property; and risks that
Madrigal or Synta may lack the financial resources and access to
capital to fund proposed operations. Further information on the
factors and risks that could affect Synta’s business, financial
conditions and results of operations are contained in Synta’s
filings with the U.S. Securities and Exchange Commission, which are
available at www.sec.gov. The forward-looking statements represent
the estimate of Madrigal and Synta as of the date hereof only, and
Madrigal and Synta specifically disclaim any duty or obligation to
update forward-looking statements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160414005438/en/
For Synta:Synta Pharmaceuticals Corp.Marc Schneebaum,
781-541-7224mschneebaum@synta.comorArgot PartnersAndrea
Rabney/Susan Kim,
212-600-1902andrea@argotpartners.comsusan@argotpartners.comorMedia:Argot
PartnersEliza Schleifstein,
917-763-8106eliza@argotpartners.comFor Madrigal:Madrigal
Pharmaceuticals, Inc.Rebecca Taub, M.D.becky@madrigalpharma.com
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