Privately held Eiger BioPharmaceuticals has signed a deal to merge with failed gene therapy biotech Celladon ($CLDN), looking to make its way onto Wall Street and press forward with a handful of treatments for rare disease.
Under the deal, Eiger's shareholders would take control of Celladon, a once-promising company that plunged into penny-stock territory after the failure of its cardiac treatment. Eiger's backers have put an initial $6 million into the company to support its plan, and they've promised another $33.5 million if and when the merger closes, which the company expects to happen in the first half of next year.
If Celladon shareholders sign off on the deal, the combined company will do business under Eiger's name and move forward with more than $60 million in cash, the company said.
Eiger is angling for access to the public markets to support its pipeline of therapies for orphan diseases. Leading the way is lonafarnib, a Phase II treatment for hepatitis delta virus, followed by a drug for a rare form of hypoglycemia, and a therapy that has shown promise in pulmonary arterial hypertension and lymphedema, the company said.
As for Celladon, the biotech hit the skids in April when Mydicar, its gene therapy for heart failure, failed its primary and secondary goals in a late-stage trial. The company gradually laid off most of its workforce while winding down R&D, accepting the resignation of CEO Krisztina Zsebo and recruiting an outside firm to help it find some strategic alternatives.
If the merger deal goes through, all of Celladon's directors and officers would resign. Current Eiger CEO David Cory would lead the combined company, which would appoint a 7-member board thereafter.
- read the announcement