A small buyout deal gives a penny-stock biotech a boost and a second chance
Just over a month after former miRagen Therapeutics COO Lee Rauch stepped up to take the helm, the microcap is scooping up Viridian Therapeutics — and with it, a new lead candidate and $91 million boost.
miRagen’s workforce was cut in half by a costly restructuring plan initiated last August, with 44 positions eliminated. Discovery research was sidelined, while the microRNA-focused biotech focused on the four programs it had. About a year later, CEO William Marshall resigned, leaving Rauch to pick up the pieces.
Now, the Boulder, CO-based biotech is betting its future on VRDN-001 — the thyroid eye disease (TED) candidate it picked up from Viridian. The insulin-like growth factor-1 receptor (IGF-1R) monoclonal antibody was originally licensed from ImmunoGen, which is still eligible for additional developmental milestones and “mid-single-digit” royalty payments, according to miRagen.
TED can lead to bulging eyes, double-vision and potential blindness. miRagen plans on launching VRDN-001 into a Phase II study for the indication in 2021. The company is also readying an IND application for VRDN-002: a program started by Viridian to improve IGF-1R-targeted antibodies by using half-life extension technology to reduce the dose required for full efficacy and enhance solubility.
The Viridian buyout was a stock-for-stock transaction, meaning all of Viridian’s outstanding equity interests were exchanged for a combination of common stock and Series A preferred stock shares. In addition, miRagen entered a $91 million private placement with new and old investors, who were issued Series A preferred stock at $465.96 per share.
The private placement, which closes at the end of this month, was led by Fairmount Funds Management with help from Venrock Healthcare Capital Partners, BVF Partners, Cormorant Asset Management, Perceptive Advisors, Wellington Management, Ally Bridge Group, Logos Capital, Surveyor Capital, Commodore Capital and Ridgeback Capital. Proceeds are tagged for the development of VRDN-001.
miRagen’s stock $MGEN jumped more than 93% upon news of the acquisition — though the share price is still hovering around $1 a piece. Yesterday, shares closed at about $0.52 each.
“After a thorough evaluation of strategic alternatives, the Board of Directors of miRagen believes this acquisition represents the highest-potential value creation opportunity for miRagen’s stockholders,” Jeffrey Hatfield, chairman of miRagen’s board of directors, said in a statement. “We are excited by the potential for VRDN-001 to become a meaningful treatment option for patients living with TED.”