BioCryst & Idera Announce Merger to Combine Capabilities

BioCryst Pharmaceuticals, Inc. and Idera Pharmaceuticals, Inc. recently announced they have signed a definitive merger agreement to form a new enterprise focused on the development and commercialization of medicines to serve more patients suffering from rare diseases. The combined company will be renamed upon closing and will be led by Vincent Milano, CEO of Idera, who will also serve as a member of the Board. BioCryst Chairman, Robert Ingram, will be Chairman of the Board of the combined company and BioCryst CEO Jon P. Stonehouse will serve as a member of the Board of Directors.

“Both of our companies have aspired to become successful providers of therapeutics for patients suffering from rare life-threatening diseases. Both share a culture that puts patients first and keeps their interests at the very core of what we do, and how we do it,” stated Vincent Milano. “By merging our unique talents, experiences, and assets, we instantly strengthen our ability to become a significant force for patients suffering from a broad range of rare diseases. We will also gain operational synergies and strengthen our financial position. The new company will have a robust late-stage pipeline with two Phase 3 candidates and two Phase 2 candidates, with several important catalysts for these programs anticipated in 2018. We will also have a deep early-stage pipeline that will continue to expand via our combined drug discovery capabilities and clinical expertise. We are extremely excited about our combined rare disease portfolio. We believe we will be well positioned to bring that portfolio to market with our proven commercial leadership team and business development opportunities.”

“Bringing these two companies together accelerates the strategic initiatives of both organizations and immediately forms a substantial and differentiated biotech company serving patients in the rare disease community,” stated Jon P. Stonehouse, BioCryst’s President and Chief Executive Officer. “Combining our respective pipelines, infrastructures and financial resources should enable the new company to grow faster, deliver for patients more rapidly and ultimately create sustainable shareholder value well beyond what either would achieve separately.”

The combination of two companies is expected to capitalize on the collective skills sets, internal expertise and combined assets to create a comprehensive, sustainable rare disease-focused biotechnology leader highlighted by:

-A robust development pipeline, including 4 late stage programs that provide near-term commercial and partnering opportunities: BCX7353 – Phase 3 program for the prophylactic treatment of Hereditary Angioedema (HAE) in a capsule formulation with FDA orphan drug designation, IMO-2125 – Phase 3 program for the treatment of PD1-refractory melanoma in combination with ipilimumab with FDA orphan drug designation, IMO-8400 – Phase 2 program for dermatomyositis, BCX7353 – Phase 2 program for the acute treatment of HAE in a liquid formulation

-Proven leadership across commercial, development, scientific and clinical functions, providing a combination of management and scientific talent that marries the necessary ingredients for a successful, sustainable biotech company.

-Synergistic discovery engines highlighted by two distinct research technologies and expertise which expands the number of rare disease therapeutic targets and candidates.

-Financial strength with approximately $243 million net cash balance (unaudited proforma cash balance as of December 31, 2017), with opportunities to add further non-dilutive capital to fund internal clinical development efforts, commercial launch efforts, and continued business development activities.

Under the terms of the merger agreement, each share of BioCryst common stock will be exchanged for 0.50 shares of the new company stock and each share of Idera common stock will be exchanged for 0.20 shares of the new company stock. The exchange ratio reflects an “at market” combination based upon the approximate 30-day average volume weighted trading prices for each company. On a proforma, fully diluted basis, giving effect to all dilutive stock options, units and warrants, BioCryst stockholders will own 51.6 percent of the stock of the combined company and Idera stockholders will own 48.4 percent. The stock issuance in the merger is expected to be tax-free to stockholders.
The merger agreement has been unanimously approved by the boards of directors of both companies. The transaction is subject to approval by the stockholders of both companies, as well as regulatory approvals and satisfaction of other customary closing conditions. A significant stockholder of each company has agreed to enter into a voting and support agreement and has agreed to vote in favor of the transaction. This stockholder owns approximately 9% of Idera shares outstanding and approximately 14% of BioCryst shares outstanding. The transaction is expected to be completed by the end of the second quarter of 2018.

The combined company, which will be renamed post-closing, will be headquartered in Exton, PA, at the current Idera headquarters, with a consolidated research center in Birmingham, AL. In addition to Mr. Milano’s role as CEO of the combined company, Dan Soland will join the combined company and will serve in the role of Chief Operating Officer.

J.P. Morgan Securities LLC acted as exclusive financial advisor to BioCryst and Skadden, Arps, Slate, Meagher & Flom, LLP acted as BioCryst’s legal counsel in connection with the transaction. Goldman Sachs & Co. LLC acted as exclusive financial advisor to Idera and Latham & Watkins, LLP acted as Idera’s legal counsel in connection with the transaction.

BioCryst Pharmaceuticals designs, optimizes and develops novel small molecule drugs that block key enzymes involved in rare diseases. BioCryst has several ongoing development programs: BCX7353 and other second generation oral inhibitors of plasma kallikrein for hereditary angioedema, and galidesivir, a broad spectrum viral RNA polymerase inhibitor that is a potential treatment for filoviruses. RAPIVAB (peramivir injection), a viral neuraminidase inhibitor for the treatment of influenza, is BioCryst’s first approved product and has received regulatory approval in the U.S., Canada, Japan, Taiwan and Korea. Post-marketing commitments for RAPIVAB are ongoing, as well as activities to support regulatory approvals in other territories.

Harnessing the approach of the earliest researchers in immunotherapy and the company’s vast experience in developing proprietary immunology platforms, Idera’s lead development program is focused on priming the immune system to play a more powerful role in fighting cancer, ultimately increasing the number of people who can benefit from immunotherapy. Idera continues to invest in research and development, and is committed to working with investigators and partners who share the common goal of addressing the unmet needs of patients suffering from rare, life-threatening diseases.