Echo Therapeutics is being acquired by a Massachusetts firm in a stock deal worth some $14 million that forms one larger company focused on means of delivering drugs through the skin.
Sontra Medical (OTCBB: SONT) agreed to acquire all shares of Echo stock in exchange for $6.25 million in Sontra shares. Sontra stock traded at $2.50 in Monday morning trading after the deal was announced. Echo shareholders will hold some 35 percent of the merged operation.
The new company will be called Echo Therapeutics and run by Patrick Mooney and Shawn Singh of Echo. Mooney, who has been chief executive officer at Echo, will serve as CEO of the merged company, and Sing will serve as interim president.
Harry Mitchell of Sontra will be the chief operating officer and chief financial offer.
The new Echo’s administrative headquarters will be located in Philadelphia. Research and development facilities will be maintained in Durham and Franklin, Mass.
Both Echo and Sontra are focused on transdermal products as a means of delivering drug through the skin.
"This merger is a timely combination of two late-stage and powerful transdermal drug penetration technologies," Mooney said in a statement. "Together, we are now ideally positioned to leverage and monetize both technologies through a continuing stream of strategic drug development and marketing partnerships. Our long-term strategic relationship with Cato Research, a highly-respected global contract research organization, will enable the combined company to maximize the output of its two core technology platforms and minimize the clinical development and regulatory risks."
The combined company will have one product that has already received Food and Drug Administration approval. Another product is being reviewed by the FDA, and seven more are under development. The FDA product, SonoPrep, is a skin permeation system utilizing ultrasound.
Mooney joined Echo in September of 2006. Singh is chairman of the board at Echo.
Among the investors in Echo is Cato BioVentures, which has offices in the Triangle, Massachusetts, Silicon Valley and San Francisco.