Neil Kumar Credit: Endpoints

Bridge­Bio CEO Neil Ku­mar en­gi­neers a deal to reel back Ei­dos shares. Or is he re­al­ly hunt­ing a buy­out?

A year af­ter Bridge­Bio took its biotech sub­sidiary Ei­dos pub­lic at $17 a share $EI­DX, the moth­er com­pa­ny wants it all back. 

Bri­an Stephen­son

Bridge­Bio CFO Bri­an Stephen­son alert­ed in­vestors in an SEC fil­ing late last week that the San Fran­cis­co-based com­pa­ny pro­posed to buy out the in­vestors who snapped up a third of the eq­ui­ty, shoot­ing for a stock-for-stock deal.

Bridge­Bio, an um­brel­la drug de­vel­op­ment group co-found­ed by CEO Neil Ku­mar which owns 66.6% of Ei­dos, went pub­lic in a record-set­ting IPO a few weeks ago, pric­ing at $17 a share — but now trad­ing north of $26, even af­ter a 10% trim on Fri­day as the news of the fil­ing be­gan to per­co­late.

In a re­lease out this morn­ing, Bridge­Bio is propos­ing a swap: 1.3 shares of Bridge­Bio for every share of Ei­dos it doesn’t own. 

That has SVB Leerink’s Mani Foroohar won­der­ing if the re­al goal here isn’t spurring a bet­ter buy­out of­fer, with a big up­side.

While these steps are in line with our ex­pec­ta­tions and the Board car­ry­ing out its fidu­cia­ry re­spon­si­bil­i­ties, we do see a sce­nario in which a po­ten­tial com­pet­i­tive “over­bid” for the com­pa­ny could yield up­side be­yond the ~21% im­plied un­af­fect­ed pre­mi­um from BBIO’s ini­tial of­fer. As the own­er of a ma­jor­i­ty of EI­DX shares, BBIO would ben­e­fit fi­nan­cial­ly in this sce­nario, though BBIO (in an An­nex to to­day’s EI­DX dis­clo­sure) pro­claims no in­ter­est in sell­ing con­trol of EI­DX to an­oth­er en­ti­ty.

For its part, Bridge­Bio is sell­ing the prospect of bet­ter di­ver­si­fi­ca­tion. Af­ter all, not­ed Stephen­son, Ei­dos in­vestors shouldn’t be wait­ing for a buy­out.

As stock­hold­ers of Bridge­Bio, the Com­pa­ny’s stock­hold­ers would have the op­por­tu­ni­ty to ben­e­fit from and par­tic­i­pate in con­tin­ued up­side in Ei­dos while di­ver­si­fy­ing their in­vest­ment through ex­po­sure to the broad port­fo­lio of as­sets be­ing de­vel­oped by Bridge­Bio. This may be im­por­tant to cur­rent in­vestors, es­pe­cial­ly giv­en the dearth of M&A in the car­dio­vas­cu­lar area there­by lim­it­ing op­por­tu­ni­ties for liq­uid­i­ty and di­ver­si­fi­ca­tion.

Bridge­Bio now has a big uni­corn val­u­a­tion of $3.24 bil­lion, com­pared to $1.3 bil­lion for Ei­dos, which closed Fri­day at $35.17.

A spe­cial com­mit­tee with RA Cap­i­tal’s Ra­jeev Shah and William Lis will be re­spon­si­ble for han­dling the buy­out. Shah, a high-pro­file fig­ure in the biotech fi­nance scene, led the $64 mil­lion round for Ei­dos in the spring of 2018, work­ing di­rect­ly with Ku­mar. Shah gam­bled on a mid-stage drug for TTR amy­loi­do­sis, look­ing to take the field against a well-ad­vanced slate of ri­vals from Pfiz­er, Al­ny­lam and Io­n­is.

Lis is the ex-CEO at Por­to­la.

Head­shot: Bri­an Stephen­son, Linkedin

Brian Kaspar. AveXis via Twitter

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I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Novartis CEO Vas Narasimhan [via Bloomberg/Getty]

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In a statement that arrived after the bell on Monday, Sarepta explained the CRL, saying:

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Levi Garraway. Broad Institute via Youtube

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Ritu Baral Cowen
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