Innovate Biopharmaceuticals, a Raleigh-based firm, is going public in a reverse merger with a California-based company in a deal that values Innovate at $60 million.
The deal, announced earlier this week, is being made with Monster Digital, which currently trades on the Nasdaq under the symbol MSDI. Monster develops products for use in high-performance consumer electronics, mobile products and computing applications. Once the deal is closed, the companies plan to spin off Monster Digital.
Innovate investors would end up owning 91 percent of the shares in the merged venture.
At close, the merged company will be renamed Innovate Biopharmaceuticals. A new stock symbol will be adopted, the companies added.
“After significantly expanding our pipeline with the addition of the only late-stage drug for celiac disease, I believe the next logical step in our corporate development is having our stock quoted in a public market,” explained Innovate CEO Christopher Prior.
“We believe that the greater access to capital and overall visibility afforded by operating as a publicly-traded organization should play a role in our ability to advance our clinical pipeline, as well as continue to in-license and develop drugs for autoimmune/inflammation diseases.”
The companies hope to secure Monster shareholder approval in the third quarter.
“Our Board of Directors and management believe that a merger with Innovate is the best option for our company,” said Monster Digital CEO David Clarke. “Upon a definitive merger agreement being signed and prior to the closing, we anticipate that the Monster Digital operating business will be sold or spun off into a separate company.”
Innovate is currently developing three clinical stage assets:
- INN-202 entering phase 3 for the treatment of Celiac Disease (CeD) with fast track designation
- INN-108 entering phase 2 for Inflammatory Bowel Disorders, mild to moderate Ulcerative Colitis (UC) and a GI orphan disease in a convenient liquid formulation
- INN-329 entering phase 3 for Magnetic Resonance Cholangiopancreatography (MRCP)
Innovate recently raised $1 million in capital.
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