Dive Brief:
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Austin, TX-based Savara Inc. will take over Mast Therapeutics in a reverse merger that gives Savara an additional pipeline asset and a path to a listing on the New York Stock Exchange, the companies announced Jan. 7.
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Mast shuttered development on its lead drug, a treatment for sickle cell disease and heart failure, after a Phase 3 study missed its primary goal in September. With only $30 million in the bank and its lead program in the dustbin, Mast quickly began searching for partnerships later that month.
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Stockholders of Savara will own 76% of the combined company and receive newly issued shares to replace their existing Savara stock. Pending shareholder approval, the new company will trade under a new ticker on NYSE.
Dive Insight:
In a joint conference call Jan. 9 with Mast, Savara Chairman and CEO Rob Neville described the merger as “transformative” for his company, marking its second transaction in several months to expand Savara's pipeline of inhaled therapies.
In June, Savara acquired the assets of Serendex Pharmaceuticals, adding Molgradex, Serendex's experimental respiratory treatment, to its pipeline. Together with its own inhaled antibiotic Aerovanc, Savara aims to build a complementary pipeline of orphan respiratory drugs.
On the call, Neville said Mast's AIR001 program could potentially add “significant value to our pipeline with a modest capital outlay in 2017.” The "favorable risk profile of [Savara's] product candidates combined with [Mast Therapeutics'] market potential provides a unique opportunity for Savara to become the next breakout company in orphan pulmonary diseases," he said.
Merging with Mast adds another inhaled drug, AIR001, that is designed to treat heart failure with preserved ejection fraction.
Mast traded in penny-stock territory for all of 2016, but its fortunes took an even deeper dive after the company announced disappointing results from a Phase 3 clinical study of its lead product, vepoloxamer.
The all-stock deal between Mast and Savara is expected to close by second quarter 2017, pending Mast and Savara stockholders' approval. The exchange ratio for new shares in the combined company valued Mast at $36.5 million, not much higher than the $20.5 million Mast had in the bank as of September 30.