Tobira pulls off a $40M Wall Street end-around with sights set on NASH

After striking out in a solo IPO attempt, Tobira Therapeutics ($TBRA) has executed a reverse merger with the stalled Regado Biosciences, raising $40 million to target a pervasive liver disease.

Through the deal, Tobira pocketed $27 million in a stock sale, which, combined with $13 million in debt since converted to common stock, pads the $33 million in net cash left in Regado's coffers. Hitting Wall Street on Tuesday, Tobira effected a 9-for-one reverse stock split, giving it 17.4 million outstanding shares.

The merger gives Tobira a roughly $70 million R&D war chest as it moves forward with cenicriviroc, or CVC, a treatment for non-alcoholic steatohepatitis (NASH) now in Phase IIb. NASH is a liver-scarring disease that affects millions of people but has no approved therapies, and its commercial prospects have spurred a frenzy of activity in R&D around the industry.

"Our lead development program of CVC in NASH is fully funded into the second half of 2017, more than one year past the expected primary endpoint in the second quarter of 2016," Tobira CEO Laurent Fisher said in a statement, adding that the merger gives his company enough cash to advance the drug in non-alcoholic fatty liver disease and study it as part of a combination therapy.

Last year, Tobira had planned to raise $69 million in an IPO but called off the effort in August when the market turned sour. And Regado, for its part, ran into serious safety issues with its Phase III anticoagulant, watching its share value plummet just months after the biotech pulled off a downsized IPO. The reverse merger, the companies said, was an ideal end for both parties.

Meanwhile, the potential of success in NASH has drawn a bevy of players into the field, led by Intercept Pharmaceuticals ($ICPT), whose obeticholic acid is on its way into Phase III after posting some promising midstage efficacy data and picking up the FDA's coveted breakthrough therapy designation. Gilead Sciences ($GILD) splashed into the field with a $470 million deal for a Phase II NASH treatment, and the hepatitis C experts at Enanta Pharmaceuticals ($ENTA) are entering the space as well.

- read the statement