OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI) has announced the signing of a merger agreement, with Achieve Life Science Inc. As per the agreement, the company would acquire Achieve Life Science in an all stock transaction, with the stockholders of Achieve, holding 75% of the new entity’s stock. As a result of the transaction, Achieve Life Sciences, Inc would be the surviving entity.
The company has further announced that prior to completion of the merger, it plans to distribute contingent value rights, of up to 80%, to its stockholders, for any net proceeds that may be obtained from future licensing, sale or transfer of OGXI’s apatorsen oncology products. The positions of CFO and CMO, at the new company, would be occupied by John Bencich and Cindy Jacobs from OncoGenex, respectively. However, the Chairman and CSO would be appointed by Achieve. Moreover, the new company would also feature a total of 7 members, for its board, of which only 3 would be from OngoGenex, while the remaining 4 would be from Achieve.
As per the press release, the new entity plans to focus its resources on smoking cessation, through the use of cytisine. The product is in the late-stages of development and is expected to be accelerated to completion, with the help of OGXI’s resources. It should be noted here that the drug has recently completed two phase-3 clinical trials, with the results published in the New England Journal of Medicine. Furthermore, the product is already being marketed in Central and Eastern Europe, through a third party, which claims to have helped over 20 million people.
Scott Cormack, the CEO of OncoGenex, stated that the decision for the merger was taken after careful analysis of strategic alternatives. He also claimed that this would add current and future product opportunities for the company to pursue. The CEO was also of the view that with cytisine in late stage development, shareholders would have a quick return on their investment, as well.
OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI) recorded a gain of 20.69%, over a trade volume of 9.31 million, to close at $0.7 per share, at the end of the January 6 trading session.