Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) and Histogen Inc., a
privately-held regenerative medicine company with a novel
biological platform that replaces and regenerates tissues in the
body, today announced the companies have entered into a definitive
agreement under which Histogen will merge with a wholly-owned
subsidiary of Conatus in an all-stock transaction. The combined
company will operate under the name Histogen, Inc., is expected to
trade on the Nasdaq Capital Market under a new ticker symbol still
to be determined and will focus on advancement of its patented
technology for dermatological and orthopedic indications.
“After completing a comprehensive review of multiple strategic
alternatives, we determined that the proposed merger with Histogen
would provide the best opportunity for Conatus shareholders moving
forward,” said Steven J. Mento, Ph.D., President, Chief Executive
Officer and co-founder of Conatus. “We believe that Histogen’s
clinical-stage dermatological and orthopedic product development
programs, under the continued guidance of the established Histogen
senior management team, offer significant potential to drive future
value for the combined company.”
Histogen has built a pipeline of novel product candidates with
demonstrated clinical activity that target high value markets. Its
lead product candidate, HST 001 or Hair Stimulating Complex (HSC),
is a minimally-invasive treatment to promote new hair growth in
patients with male pattern hair loss, addressing an underserved
multi-billion-dollar global market. In addition, Histogen is
developing HST 002, a human-derived collagen and extracellular
matrix dermal filler, and HST 003, an extracellular matrix scaffold
for the treatment of articular cartilage defects. Histogen expects
all three product candidates to reach clinical and regulatory
inflection points in 2020.
“This merger is transformative for Histogen as we look to
advance our novel regenerative medicine pipeline,” said Richard
Pascoe, Chairman and CEO of Histogen. “We believe the target
product profile of our product candidates combined with their
market potential provides an opportunity for Histogen to become a
leader in the aesthetics and orthopedic medicine markets.”
Histogen currently anticipates meeting the following upcoming
development milestones:
- File an Investigational New Drug Application Amendment in Q2
2020 and initiate a Phase 1b/2a study of HST 001 for the treatment
of male pattern baldness in Q2 2020.
- File an Investigational Device Exemption in Q2 2020 and
initiate a Phase 1 study of HST 002 as a dermal filler in Q2
2020.
- File an Investigational New Drug Application in Q3 2020 and
initiate a Phase 1 study of HST 003 for the treatment of articular
cartilage defects in the knee in Q3 2020.
- Announce top-line results from Phase 1 study of HST 002 for the
treatment of nasolabial folds in Q3 2020.
- Announce top-line results from Phase 1b/2a study of HST 001 for
the treatment of male pattern baldness in Q4 2020.
Histogen’s pipeline is derived from a single patented
manufacturing process that yields multiple biologic products from a
single bioreactor. Histogen’s first aesthetic application, a
naturally secreted cell conditioned media ingredient for topical
skin care products, is marketed by leading global biopharmaceutical
company Allergan plc within its SkinMedica A+ brand.
About the Proposed MergerUnder the terms
of the merger agreement, pending stockholder approval of the
transaction, Histogen will merge with a wholly-owned subsidiary of
Conatus and Histogen stockholders will receive newly issued shares
of Conatus common stock. The exchange ratio used to determine the
number of shares of Conatus common stock issuable to Histogen
stockholders pursuant to the merger was determined using a
pre-transaction valuation of $100 million for Histogen’s business,
based on its latest priced investment round and clinical pipeline
advancement, and $35.135 million for Conatus’ business, an
approximately 155% premium to the 20-day volume weighted average
closing share price of Conatus prior to the signing date on the
Nasdaq Capital Market. As a result, current Conatus stockholders
will collectively own approximately 26%, and Histogen stockholders
will collectively own approximately 74%, of the combined company on
a fully-diluted basis, after taking into account Histogen’s and
Conatus’ outstanding options and warrants at the time of closing,
irrespective of the exercise prices of such options and warrants,
with such ratio subject to adjustment based on each company’s net
cash balance at closing.
The combined company, led by Histogen’s current management team,
is expected to be named Histogen Inc. and be headquartered in San
Diego, CA. After closing, the combined company is expected to trade
on the Nasdaq Capital Market under a new ticker symbol. At closing,
the combined company’s board of directors is anticipated to consist
of eight members, including six members of Histogen’s current board
and two members of Conatus’ current board. The merger agreement has
been unanimously approved by the board of directors of each
company, who have also recommended to their respective company’s
stockholders that they approve the merger agreement, the merger
and, with respect to Conatus’s stockholders, a reverse stock split.
The transaction is expected to close by the end of the second
quarter of 2020, subject to approvals by the stockholders of
Histogen and Conatus, a reverse stock split being implemented by
Conatus, the continued listing of the combined company on Nasdaq
and other customary closing conditions.
Canaccord Genuity LLC is acting as financial advisor to Histogen
in the transaction. Conatus’ financial advisor in the transaction
is Oppenheimer & Co., Inc. Sheppard Mullin Richter &
Hampton LLP is serving as legal counsel to Histogen and Latham and
Watkins LLP is serving as legal counsel to Conatus.
A more complete description of the terms of and conditions of
the transaction can be found in Conatus’ Form 8-K to be filed on
January 28, 2020, with the SEC and in the Merger Agreement, which
is filed as an exhibit to that Form 8-K.
Conference Call DetailsThe companies will host
a conference call and webcast at 4:30 p.m. ET on January 28, 2020,
to discuss the transaction, as well as the merged company’s
development pipeline. To access the live conference call please
dial (877) 407-9120 U.S. toll-free or (412) 902-1009 international,
or join via the webcast link available at
www.conatuspharma.com/investors. Following the live webcast, a
replay will remain available on Conatus’ website for 30 days.
About HistogenHistogen is a regenerative
medicine company focused on developing patented technologies that
replace and regenerates tissues in the body. The Company’s
innovative technology platform utilizes cell conditioned media and
extracellular matrix materials produced by hypoxia-induced
multipotent cells to develop therapeutic products that address
underserved, multi-billion US dollar global markets. For more
information, please visit www.histogen.com.
About Conatus PharmaceuticalsConatus is a
biotechnology company that has been focused on the development of
novel medicines to treat chronic diseases with significant unmet
need. For additional information, please visit
www.conatuspharma.com.
Forward-Looking StatementsCertain statements
herein constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and are
intended to be covered by the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements may be
identified by words such as “believes,” “will,” “would,” “expects,”
“project,” “may,” “could,” “developments,” “launching,”
“opportunities,” “anticipates,” “estimates,” “intends,” “plans,”
“targets” and similar expressions. These forward-looking statements
include, but are not limited to, statements concerning: the
expected structure, timing and completion of the proposed merger;
future product development plans and projected timelines for the
initiation and completion of preclinical and clinical trials; the
potential for the results of ongoing preclinical or clinical trials
and the efficacy of Histogen’s drug candidates; the potential
market opportunities and value of drug candidates; other statements
regarding future product development and regulatory strategies,
including with respect to specific indications; any statements
regarding the combined company’s future financial performance,
results of operations or sufficiency of capital resources to fund
operating requirements; any statements relating to future Nasdaq
listing; the executive and board structure of the combined company;
and any other statements that are not statements of historical
fact. These statements are based upon the current beliefs and
expectations of each company’s management and are subject to
significant risks and uncertainties.
Actual results may differ materially from those set forth in the
forward-looking statements as a result of numerous factors. The
following factors, among others, could cause actual results to
differ materially from the anticipated results expressed in the
forward-looking statements: the risk that the conditions to the
closing of the proposed merger are not satisfied, including the
failure to timely obtain stockholder approval for the transaction,
if at all; uncertainties as to the timing of the consummation of
the proposed merger; risks related to each company’s ability to
manage its operating expenses and its expenses associated with the
proposed merger pending closing; the risk that as a result of
adjustments to the exchange ratio, Conatus stockholders and
Histogen stockholders could own more or less of the combined
company than is currently anticipated; risks related to the market
price of Conatus’ common stock relative to the exchange ratio; the
businesses of Histogen and Conatus may not be combined
successfully, or such combination may take longer than expected;
the combined company’s need for, and the availability of,
substantial capital in the future to fund its operations and
research and development activities; the combined company’s ability
to continue to successfully progress research and development
efforts and to create effective, commercially-viable products; and
the success of the combined company’s product candidates in
completing pre-clinical or clinical testing and being granted
regulatory approval to be sold and marketed in the United States or
elsewhere. Additional factors that could cause actual results to
differ materially from those expressed in the forward-looking
statements are discussed in Conatus’ reports (such as the Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed with the Securities and Exchange
Commission (the “SEC”) and available at the SEC’s Internet website
(www.sec.gov). All subsequent written and oral forward-looking
statements concerning the proposed transaction or other matters
attributable to Histogen or Conatus or any person acting on their
behalf are expressly qualified in their entirety by the cautionary
statements above. Except as required by law, neither Conatus nor
Histogen undertakes any obligation to update any forward-looking
statement to reflect circumstances or events that occur after the
date the forward-looking statement is made.
Additional Information and Where to Find
ItConatus will file a report on Form 8-K with the SEC
regarding the proposed transaction with Histogen Inc. All parties
desiring details regarding the merger are urged to review the Form
8-K and exhibits attached thereto, which are available at the SEC’s
website at www.sec.gov.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. This communication may be deemed to be
solicitation material in respect of the proposed merger. In
connection with the proposed merger, Conatus expects to file a
registration statement on Form S-4 with the SEC that will
include a proxy statement of Conatus and that will also constitute
a prospectus of Conatus, which proxy statement/prospectus will be
mailed or otherwise disseminated to Conatus stockholders when it
becomes available. Conatus also plans to file other relevant
documents with the SEC regarding the proposed merger transaction.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER TRANSACTION.
In addition to receiving the proxy statement by mail,
stockholders also will be able to obtain these documents, as well
as other filings containing information about Conatus, the proposed
merger and related matters, without charge, from the SEC’s website
at www.sec.gov. In addition, these documents can be obtained,
without charge, by sending an e-mail to info@conatuspharma.com,
along with complete contact details and a mailing address or by
contacting Conatus at (858) 376-2600.
Participants in SolicitationConatus and certain
of its directors, executive officers and other members of
management and employees may, under SEC rules, be deemed to be
participants in the solicitation of proxies from stockholders with
respect to the merger. Information regarding the persons or
entities who may be considered participants in the solicitation of
proxies will be set forth in the proxy statement and Form S-4
relating to the merger when it is filed with the SEC. Information
regarding the directors and executive officers of Conatus is set
forth in the proxy statement for Conatus’ 2019 Annual Meeting of
Stockholders, which was filed with the SEC on April 27, 2019.
Additional information regarding the interests of such potential
participants will be included in the proxy statement and Form S-4
and the other relevant documents filed with the SEC when they
become available.
CONTACT: Keith MarshallConatus Pharmaceuticals
Inc.(858) 376-2600IR@conatuspharma.com
CONTACT: Eileen BrandtHistogen,
Inc. (858) 526-3106ebrandt@histogen.com
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