ARCA biopharma and cash-rich Nuvelo are merging in a deal that is designed to create a late-stage cardiovascular company. After the deal is complete, ARCA shareholders will own 67 percent of the common stock in the combined operation and the cash on hand should fund operations through 2009. Richard Brewer, the CEO of ARCA, will retain that title for the merged operation.
Analysts were quick to note that Nuvelo's chief attraction is the amount of cash that it has on hand. At the end of June the biotech reported $76 million of cash and negotiables on hand. But its blood-clot drug alfimeprase failed earlier this year. That left Nuvelo looking attractive primarily for its balance sheet, rather than its drug prospects.
"We believe this combination brings both immediate and longer-term value to our stockholders," said Dr. Ted W. Love, chairman and chief executive of Nuvelo. "After thorough review of numerous options, we chose to merge with ARCA because it enables us to transform ourselves into a late-stage company with multiple significant milestones and a near-term commercialization opportunity, backed by a promising cardiovascular pipeline."
- take a look at Nuvelo's release
- check out the report from the San Jose Business Journal