Catalyst Biosciences, Targacept reach merger deal

Catalyst Biosciences reached an agreement to merge with Targacept, the companies announced Friday. The merged drugmaker, which will retain the Catalyst name, plans to use "engineered human proteases to develop next-generation biopharmaceuticals with improved efficacy and therapeutic index to treat major diseases."

Under the terms of the deal, Targacept shareholders will receive redeemable convertible notes worth $37 million and about $20 million in cash. Targacept shareholders will own 35 percent of the combined company, although their stake could grow to 49 percent if the notes are fully converted into common stock. Targacept is expected to contribute $35 million in cash to the merged company, while Catalyst would provide $5 million in cash. Meanwhile, the operations of the two drugmakers will be combined.

The companies noted that the assets of the combined organisation will include a pipeline of protease therapeutics including the engineered Factor VIIa candidate PF-05280602, which has completed Phase I development and has been licensed to Pfizer by Catalyst. The companies also stated that the assets include an improved Factor IX product for haemophilia B, an engineered Factor Xa for potential use in treating haemophilia and controlling bleeding in non-haemophilia patients and two novel proteases treating complement-mediated disorders.

"This merger establishes a well-capitalised public company with resources to advance our unique protease-based product candidates through multiple future value inflection points," remarked Catalyst CEO Nassim Usman, who will lead the combined company. Usman continued "in addition to our Factor VIIa programme we will also have sufficient resources to initiate and complete a planned proof-of-concept study of CB 2679d, a next-generation Factor IX for haemophilia B patients, as well as further develop of our novel Factor Xa variant and our anti-complement programmes."

The transaction has been unanimously approved by the boards of directors of both companies. In addition, voting agreements in support of the merger have been signed by shareholders comprising 84 percent of Catalyst's voting stock and about 43 percent of Targacept's common stock.

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