$20M Committed PIPE Financing to Close With Merger
RESEARCH TRIANGLE PARK, N.C. and SAN DIEGO, April 23, 2013 (GLOBE
NEWSWIRE) -- Tranzyme Pharma (Nasdaq:TZYM) ("Tranzyme"), a
biopharmaceutical company focused on discovering, developing and
commercializing novel, mechanism-based therapeutics, and Ocera
Therapeutics, Inc. ("Ocera"), a privately held biopharmaceutical company
developing novel therapeutics for liver diseases, today announced that
they have entered into a definitive agreement under which Ocera will
merge with a subsidiary of Tranzyme in an all-stock transaction. The
merger is expected to create a NASDAQ-listed company focused on the
development of novel therapeutics for patients with acute and chronic
decompensated liver disease, an area of high unmet medical need. Upon
closing, the company will be named "Ocera Therapeutics, Inc." (the
"Company").
Concurrently with the execution of the merger agreement, the Ocera
investor syndicate committed to a $20 million PIPE financing for the
Company, which will close with the merger. All of Ocera's largest
preferred stock investors, including Domain Associates, Thomas McNerney
& Partners, Sofinnova Ventures and InterWest Partners, have
committed to participate in the PIPE financing.
"Following an extensive and thorough review of strategic alternatives,
we believe the proposed merger with Ocera offers the best value for our
stockholders", said Vipin K. Garg, PhD, Tranzyme's President and Chief
Executive Officer. "We expect the merger will benefit from the
substantial synergies of the combined management team's extensive
experience in drug development, specifically in hepatology, which will
help accelerate the transition and allow for efficient execution of the
development plan."
Linda Grais, MD, President and Chief Executive Officer of Ocera,
stated, "The merger and concurrent financing will allow the Company to
continue to advance Ocera's lead clinical program, OCR-002, a
differentiated product candidate for orphan liver diseases currently in
Phase 2 development. This product candidate addresses a significant
unmet need in the treatment of acute hepatic encephalopathy, and we look
forward to the initiation of our Phase 2b trial later this year and
additional Phase 2a data in 2014."
OCR-002 has received Orphan Drug designation in the United States and
Europe and has been granted fast track status by the U.S. Food and Drug
Administration. We estimate that there are up to one million patients
with cirrhosis in the United States, and approximately 150,000
hospitalizations occur annually due to complications of encephalopathy,
costing the healthcare system approximately $7 billion every year. For
more information about clinical trials related to OCR-002, please visit:
www.clinicaltrials.gov.
Details of the Proposed Transaction
On a pro forma basis, prior to the financing transaction discussed
below, based upon the number of shares of Tranzyme common stock to be
issued in the merger, current Tranzyme shareholders will own
approximately 27.4% of the Company and current Ocera shareholders will
own approximately 72.6% of the Company. The final number of shares will
be subject to adjustments at closing based on each company's cash levels
and other matters at closing. The transaction has been unanimously
approved by the board of directors of both companies. The merger is
expected to close in the third quarter of 2013, subject to approval by a
majority of Tranzyme stockholders, review by the Securities and
Exchange Commission and customary closing conditions as detailed in the
merger agreement.
Concurrently with the execution of the merger agreement, Tranzyme
entered into a securities purchase agreement pursuant to which certain
investors agreed to purchase, and it agreed to sell, $20 million worth
of its common stock at a price to be determined based on the weighted
average trading price of Tranzyme's closing price for the 10 days prior
to the closing of the merger. The securities purchase agreement is
conditioned on closing of the merger transaction and customary closing
conditions as detailed in the securities purchase agreement, and
contains customary representations, warranties, covenants and
indemnities.
In connection with the merger, Tranzyme plans to effect a reverse stock
split intended to increase its trading price to above the minimum
requirements of Nasdaq for allowing the company to remain listed
following the transaction. Whether Tranzyme will remain listed following
the transaction depends on whether Tranzyme will satisfy all of the
applicable Nasdaq requirements.
Stifel served as financial advisor, Goodwin Procter LLP served as legal
counsel to Tranzyme and Skadden, Arps, Slate, Meagher & Flom LLP
served as legal counsel to the special committee and the board of
directors of Tranzyme with respect to the transaction. Reed Smith LLP
served as legal counsel to Ocera with respect to the transaction.
Management and Organization
Following the merger, the Company will be headed by Linda Grais, MD,
the current President and CEO of Ocera. The corporate headquarters will
be located in San Diego, California. Clinical and regulatory operations
will be led by Franck S. Rousseau, MD, Chief Medical Officer of
Tranzyme, in the existing office in Research Triangle Park, North
Carolina. The board of directors will be comprised of representatives
from both the existing Ocera and Tranzyme companies, including Drs.
Grais and Rousseau.
Upon completion of the merger, Dr. Vipin K. Garg, Tranzyme's President
and CEO will depart the Company to pursue other interests.
About OCR-002
OCR-002 (ornithine phenylacetate) is an ammonia scavenger designed to
treat hyperammonemia and associated hepatic encephalopathy in patients
with liver cirrhosis, acute liver failure and acute liver injury.
OCR-002, through its dual mechanism of action, directly lowers
circulating blood levels of ammonia by enabling alternate metabolic
pathways in the muscle and kidney in patients with decompensated liver
cirrhosis, and or liver failure from other causes. OCR-002 is being
developed as an injectable formulation for hospitalized patients and as
an oral formulation to treat and prevent recurrences of hepatic
encephalopathy. Hepatic encephalopathy is an often-reversible
neuropsychiatric abnormality observed in patients with liver disease; it
is marked by a worsening of brain function when the liver is no longer
able to remove toxic substances such as ammonia in the blood. Ammonia
accumulation in the blood impairs brain cell function. Signs of hepatic
encephalopathy include impaired cognition, uncontrolled movements and
decreased levels of consciousness leading to coma and death due to brain
swelling.
Planning is underway to initiate a Company-sponsored Phase 2b,
randomized, double-blind, placebo-controlled, efficacy study of OCR-002
as a treatment for acute hepatic encephalopathy in hospitalized patients
with liver cirrhosis. Enrollment is expected to begin in late 2013.
OCR-002 also is the subject of two ongoing, externally-sponsored, Phase
2a studies in patients. Data from these studies are expected in 2014.
Conference Call Wednesday, April 24, 2013 at 8:00am ET
Tranzyme and Ocera will host a joint conference call on Wednesday,
April 24, 2013 at 8:00am ET to discuss the planned merger and its
business overview. To participate in the live call, please dial (877)
670-9784 (U.S. and Canada) or (970) 315-0430 (international), five to
ten minutes prior to the start of the call. A live audio webcast will
also be available in the "Investors" section of the Tranzyme website, www.tranzyme.com.
A replay of the conference call and archived version of the webcast
will be made available once a transcript has been filed with the SEC,
and we expect the replay to remain available until April 30, 2013.
Investors will be able to listen to the replay by dialing (855) 859-2056
(U.S. and Canada) or
(404) 537-3406 (international) with the passcode 38813485 and the
webcast will be archived at www.tranzyme.com.
About Tranzyme Pharma
Tranzyme Pharma is a biopharmaceutical company focused on discovering,
developing and commercializing novel, mechanism-based therapeutics. All
of Tranzyme's drug discovery activities are based on its proprietary
small molecule macrocyclic template chemistry (MATCH™) technology, which
has also been successfully used to generate drug candidates in
partnership with other pharmaceutical companies. MATCH enables the rapid
construct of synthetic libraries of drug-like, macrocyclic compounds in
a predictable and efficient manner. By leveraging MATCH, Tranzyme is
committed to pursuing first-in-class medicines to address areas of
significant unmet medical need and continues to pursue funded drug
discovery partnerships. Additional information on Tranzyme can be found
at www.tranzyme.com.
About Ocera Therapeutics, Inc.
Ocera Therapeutics, based in San Diego, California, is a privately held
biopharmaceutical company focused on the development and
commercialization of proprietary compounds to treat acute and chronic
liver diseases. In addition to OCR-002, Ocera has developed Zysa™
(AST-120) a spherical carbon adsorbent, for the treatment of irritable
bowel syndrome. Ocera has raised over $60 million dollars in venture
financing from funds including Domain Associates, Sofinnova Ventures,
Thomas, McNerney & Partners, Greenspring Associates and InterWest
Partners. Additional information on Ocera can be found at www.ocerainc.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed merger
and other contemplated transactions (including statements relating to
satisfaction of the conditions to and consummation of the proposed
merger, the expected ownership of the combined company, the alternatives
to the proposed merger, and plans with respect to financing for the
combined company) constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act and are usually identified by the use of words
such as "anticipates," "believes," "estimates," "expects," "intends,"
"may," "plans," "projects," "seeks," "should," "will," and variations of
such words or similar expressions. We intend these forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 27A of the Securities
Act
and Section 21E of the Securities Exchange Act and are making this
statement for purposes of complying with those safe harbor provisions.
These forward-looking statements reflect our current views about our
plans, intentions, expectations, strategies and prospects, which are
based on the information currently available to us and on assumptions we
have made. Although we believe that our plans, intentions,
expectations, strategies and prospects as reflected in or suggested by
those forward-looking statements are reasonable, we can give no
assurance that the plans, intentions, expectations or strategies will be
attained or achieved. Furthermore, actual results may differ materially
from those described in the forward-looking statements and will be
affected by a variety of risks and factors that are beyond our control.
Risks and uncertainties for Tranzyme and Ocera and of the combined
company include, but are not limited to: inability to complete the
proposed merger and other contemplated transactions; liquidity and
trading market for shares prior to and following the consummation of the
proposed merger and proposed financing; costs and potential litigation
associated with the proposed merger; failure or delay in obtaining
required approvals by the SEC or any other governmental or
quasi-governmental entity necessary to consummate the proposed merger,
including our ability to file an effective proxy statements in
connection with the proposed merger and other contemplated transactions,
which may also result in unexpected additional transaction expenses and
operating cash expenditures on the parties; inability or the delay in
obtaining required regulatory approvals for product candidates, and/or
which
may result in unexpected cost expenditures; failure to issue Tranzyme
common stock in the proposed merger and other contemplated transactions
exempt from registration or qualification requirements under applicable
state securities laws; the price of the financing transaction in
connection with the proposed merger and contemplated transactions being
materially lower than the current weighted average trading price of
Tranzyme's common stock, or the aggregate amount of cash received from
such financing transaction being less than anticipated; uncertainties in
obtaining successful clinical results for product candidates and
unexpected costs that may result therefrom; failure to realize any value
of certain product candidates developed and being developed, including
with respect to OCR-002, in light of inherent risks and difficulties
involved in successfully bringing product candidates to
market; inability to develop new product candidates and support existing
products; the approval by the FDA and EMA and any other similar foreign
regulatory authorities of other competing or superior products brought
to market; risks resulting from unforeseen side effects; risk that the
market for the combined company's products may not be as large as
expected; inability to obtain, maintain and enforce patents and other
intellectual property rights or the unexpected costs associated with
such enforcement or litigation; inability to obtain and maintain
commercial manufacturing arrangements with third party manufacturers or
establish commercial scale manufacturing capabilities; loss of or
diminished demand from one or more key customers or distributors;
unexpected cost increases and pricing pressures; continuing or deepening
economic recession and its negative impact on customers, vendors
or suppliers; failure to obtain the necessary stockholder approvals or
to satisfy other conditions to the closing of the proposed merger and
the other contemplated transactions; a superior proposal being submitted
to either party; uncertainties of cash flows and inability to meet
working capital needs; cost reductions that may not result in
anticipated level of cost savings or cost reductions prior to or after
the consummation of the proposed merger; and risks associated with the
possible failure to realize certain benefits of the proposed merger,
including future financial, tax, accounting treatment, and operating
results. Many of these factors that will determine actual results are
beyond Tranzyme's, Ocera's, or the combined company's ability to control
or predict.
Other risks and uncertainties are more fully described in our Annual
Report on Form 10-K for the year ended December 31, 2012 filed with the
SEC, and in other filings that Tranzyme makes and will make with the SEC
in connection with the proposed transactions, including the proxy
statement described below under "Important Information and Where to Find
It." Existing and prospective investors are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date hereof. The statements made in this press release speak only
as of the date stated herein, and subsequent events and developments
may cause our expectations and beliefs to change. While we may elect to
update these forward-looking statements publicly at some point in the
future, we specifically disclaim any obligation to do so, whether as a
result of new information, future events or
otherwise, except as required by law. These forward-looking statements
should not be relied upon as representing our views as of any date after
the date stated here in.
Important Information and Where to Find It
Tranzyme and Ocera and certain of their directors and executive
officers may become participants in solicitation of proxies from
Tranzyme stockholders in connection with the proposed transactions.
Additional Information regarding persons who may, under the rules of the
SEC, be deemed to be participants in the solicitation of the Tranzyme
stockholders in connection with the proposed merger, and who have
interests, whether as security holders, directors or employees of
Tranzyme or Ocera or otherwise, which may be different from those of
Tranzyme stockholders generally, will be provided in the proxy statement
and other materials to be filed with the SEC.
Each of Tranzyme's board of directors, John H. Johnson, George B.
Abercrombie, Jean-Paul Castaigne, Vipin K. Garg, Anne M. VanLent, and
Alex Zisson; Tranzyme's executive officers, Vipin K. Garg (President and
Chief Executive Officer), Franck Rousseau (Chief Medical Officer),
David Moore (Chief Business Officer) and Helmut Thomas (Senior Vice
President, Research and Preclinical Development); Ocera's board of
directors, Eckard Weber, Lars Ekman, Linda Grais, Nina Kjellson, Michael
F. Powell, and Pratik Shah; and Ocera's executive officers, Linda Grais
(Chief Executive Officer), Dana S. McGowan (Chief Financial Officer and
Secretary) and Keith Anderson (Vice President Pharmaceutical Sciences
and Chief Operating Officer); may be deemed "participants" in the
solicitation of proxies from the Tranzyme stockholders in connection
with the proposed transactions.
Information regarding Tranzyme's directors' and executive officers'
respective interests in Tranzyme by security holdings or otherwise is
set forth in Tranzyme's proxy statement relating to the 2012 annual
meeting of stockholders filed with the SEC on April 27, 2012. The
following is a list of the current approximate number of shares of
Tranzyme common stock beneficially held by each of the foregoing
Tranzyme directors and officers listed above: John H. Johnson (66,835
shares), George B. Abercrombie (50,468 shares), Jean-Paul Castaigne
(51,545 shares), Vipin K. Garg (689,068 shares), Anne M. VanLent (50,468
shares), Alex Zisson (50,468 shares), Franck Rousseau (90,625 shares),
David Moore (69,800 shares) and Helmut Thomas (119,105 shares).
Vipin Garg, Tranzyme's President and Chief Executive Officer, will be
entitled to receive severance pay in the aggregate amount of
approximately $450,000 and the acceleration of the vesting of all
outstanding stock awards along with other separation benefits upon the
termination of his employment at the closing of the proposed
merger. Alex Zisson, a Tranzyme director, and Pratik Shah, an Ocera
director, are each partners at, and director appointees of, Thomas
McNerney & Partners, LLC and its affiliates
("TMP"). TMP beneficially owns an aggregate of approximately 12,933,146
shares of Ocera stock after giving effect to the exercise of certain
options and warrants, the conversion of convertible notes of Ocera into
preferred stock of Ocera (assuming a closing date of June 30, 2013), and
the conversion of those shares and all other shares of preferred stock
beneficially owned by TMP into
common stock. It is anticipated that Dr. Shah will be a director of the
combined company following the consummation of the proposed merger. Dr.
Shah would be the only director originally appointed by TMP serving on
the board of directors of the combined company immediately after the
merger.
Eckard Weber, M.D., a director of Ocera, is an employee of Domain
Associates, L.L.C. ("Domain Associates") and a member of One Palmer
Square Associates VI, L.L.C., the general partner of Domain Partners VI,
L.P. and DP VI Associates, L.P. (Domain Associates, Domain Partners VI,
L.P. and DP VI Associates, L.P. are collectively referred to as
"Domain"). Dr. Weber individually beneficially owns approximately
3,030,000 shares of Ocera's common stock (which includes an option to
acquire 150,000 shares of the common stock of Ocera). Domain
beneficially owns (without including the shares beneficially owned by
Dr. Weber) in the aggregate approximately 13,609,983 shares of Ocera
stock after giving effect to the exercise of certain warrants, the
conversion of convertible notes of Ocera into preferred stock of Ocera
(assuming a closing date of June 30, 2013), and the conversion of those
shares and
all other shares of preferred stock beneficially owned by Domain into
common stock. Dr. Weber is anticipated to serve as a director of the
Company following the consummation of the proposed merger.
Nina Kjellson, a director of Ocera, is a partner in InterWest Partners
IX, LP ("InterWest"), a stockholder of Ocera. InterWest beneficially
owns in the aggregate approximately 3,530,891 shares of Ocera stock
after giving effect to the exercise of certain options and warrants,
conversion of convertible notes of Ocera into preferred stock of Ocera
(assuming a closing date of June 30, 2013), and the conversion of those
shares and all other shares of preferred stock beneficially owned by
InterWest into common stock. Nina Kjellson is anticipated to serve as a
director of the Company following the consummation of the proposed
merger.
Linda Grais is a member of the general partner of InterWest, the Chief
Executive Officer and a director of Ocera and is anticipated to be the
Chief Executive Officer and to serve as a director of the Company
following the consummation of the proposed merger. Linda Grais holds an
option to acquire up to 615,091 shares of the common stock of Ocera.
Michael F. Powell, a director of Ocera and the holder of an option to
acquire up to 150,000 shares of the common stock of Ocera, is also a
managing member of the general partner entity of Sofinnova Venture
Partners VI, L.P. ("Sofinnova"). Sofinnova, as nominee for certain of
its affiliated funds, is the beneficial owner of approximately 7,297,929
shares of Ocera stock after giving effect to the exercise of certain
warrants, the conversion of convertible notes of Ocera into preferred
stock of Ocera (assuming a closing date of June 30, 2013), and the
conversion of those shares and all other shares of preferred stock
beneficially owned by Sofinnova into common stock. Michael Powell is
anticipated to serve as a director of the Company following the
consummation of the proposed merger.
Dana S. McGowan, Ocera's Chief Financial Officer and Secretary, holds options to acquire up to 567,489 shares of Ocera stock.
Keith Anderson, Ocera's Vice President Pharmaceutical Sciences and
Chief Operating Officer holds options to acquire up to 511,239 shares of
Ocera stock.
Certain of the holders of preferred stock of Ocera (including Domain,
TMP, InterWest and Sofinnova) also will be participating in a financing
of Tranzyme, which financing will close following the effective time of
the proposed merger. In addition to Domain, TMP, InterWest and
Sofinnova, the following entities will participate in that financing and
such entities beneficially own approximately the number of shares of
Ocera stock, after giving effect to the exercise of certain warrants,
the conversion of convertible notes of Ocera into preferred stock of
Ocera (assuming a closing date of June 30, 2013), and the conversion of
those shares and all other shares of preferred stock beneficially owned
by such entity into common stock, as parenthetically indicated: Agechem
Venture Fund L.P. (2,080,549 shares); CDIB BioScience Ventures I
(520,137 shares); Cross Creek Capital, L.P. (828,789
shares); Cross Creek Capital Employees' Fund, L.P. (81,449 shares);
FinTech GIMV Fund LP (520,137 shares); Greenspring Crossover Ventures I,
L.P. (650,357 shares); Greenspring Global Partners III, L.P. (626,516
shares); Greenspring Global Partners III-A, L.P. (287,347 shares); and
Greenspring Global Partners III-B, L.P. (906,429 shares).
This communication 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. A definitive proxy statement and a proxy card will be
filed with the SEC and will be mailed to Tranzyme's stockholders seeking
any required stockholder approvals in connection with the proposed
transactions. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS
AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT
TRANZYME MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS.
Stockholders may obtain, free of charge, copies of the definitive proxy
statement and any other documents filed by Tranzyme with the SEC in
connection with the proposed transactions at the SEC's
website (http://www.sec.gov), at Tranzyme's website (http://ir.tranzyme.com), or by writing to the Secretary, Tranzyme, Inc. at 5001 South Miami Boulevard, Suite 300, Durham, North Carolina 27703.
CONTACT:
Investor Inquiries:
Susan Sharpe
Director, Corporate Communications
Tranzyme Pharma
(919) 328-1109
ssharpe@tranzyme.com
Angeli A. Kolhatkar
Manager, Investor Relations
Burns McClellan
(212) 213-0006
akolhatkar@burnsmc.com
Media Inquiries
Justin Jackson
Executive Vice President
Burns McClellan
(212) 213-0006
jjackson@burnsmc.com
No comments:
Post a Comment