Three months after a phase 2 fail for its COVID-19 antiviral sent Pardes Biosciences on the hunt for strategic alternatives, the biotech has been bailed out via an acquisition by its key shareholders.
Pardes has only been publicly listed since December 2021, courtesy of a merger with a special purpose acquisition company launched by VC firm Foresite Capital. While its stock debuted at $16.37, the biotech has been on a downward trajectory ever since, closing at $1.85 on Friday.
The offer of between $2.02 and $2.19 a share comes in slightly above the current shrunken share price. The deal also includes a non-tradeable contingent value right to receive 80% of the net proceeds from licensing or selling any of Pardes' programs within five years of the sale closing, according to a Monday press release.
The mysterious new buyer, MediPacific, is in fact controlled by Foresite and James Tananbaum, M.D., a founding partner of Foresite and a member of Pardes' board of directors.
The deal is expected to close in the third quarter of this year and will see Pardes merge with a subsidiary of MediPacific. For the sale to go through, Pardes will need to have at least $125 million in cash at the time. As of the end of March, the company had $172 million in the bank, which it had expected to last into spring 2024.
Pardes was left with few options in April when its antiviral pomotrelvir was unable to prove its superiority to placebo for clearing SARS-CoV-2 from patients in a phase 2 trial. The “unexpected results” forced the company to suspend work on the drug and “pursue alternative strategic opportunities for the company,” CEO Thomas Wiggans said at the time.
The disappointing readout marked a rapid reversal for the company, whose executives had previously appeared upbeat when reporting fourth-quarter 2022 financials. Wiggans himself had seemed bullish about pomotrelvir’s prospects as a standalone, oral antiviral treatment for COVID-19.