- Cancer biotech Tocagen will merge with the privately held Forte Biosciences, bringing its decade-plus run as an independent company to a close some four months after it laid off two-thirds of its workforce in a restructuring.
- The combined company, which will use Forte's name and trade on the Nasdaq Capital Market under a new stock ticker, will advance Forte's experimental skin disease therapy into Phase 2 study this year.
- Shareholders in Tocagen will own just over a quarter of the new company, which will be headquartered in Torrance, California, and led by Forte's current CEO Paul Wagner.
Through a stock-for-stock transaction with Forte, Tocagen shareholders will retain some ownership in the combined company, and Tocagen can designate two of the new Forte's eight board members.
A group of Forte's investors, which include the prominent venture capital firm OrbiMed, will invest $14 million, giving the combined company a starting cash balance of roughly $25 million.
That money will be used to start a randomized Phase 2 study of Forte's lead drug candidate, FB-401, which is being developed for atopic dermatitis and other inflammatory skin diseases.
On a conference call Thursday, neither chief executive made much mention of Tocagen's clinical research in brain cancer and other solid tumors.
Last September, a Phase 3 study of Tocagen's then-lead drug candidates Toca 511 and Toca FC missed all of its primary and secondary goals, showing no benefit in treating an aggressive type of brain tumor.
Tocagen presented fuller data from the study in late November, when it also announced it would begin evaluating its options.
One Phase 1 study of the drug combination was previously set to begin this year, and is currently listed as "not yet recruiting" on clinicaltrials.gov.
Tocagen was founded in 2007 and went public in a 2017 offering that brought in $87 million. As of Nov. 30, 2019, the company had accumulated a deficit of nearly $269 million.