Unusual deal: Princeton biopharma firm merging with Hooters’ holding company

It may not seem like a logical match: a biopharma company and the owner of wings-n-things eatery chain Hooters. But that’s what’s happening, as Chanticleer Holdings Inc. has entered into a definitive merger agreement with Princeton-based biologic drug development company Sonnet BioTherapeutics Inc.

Under the terms of the transactions, shareholders in privately-held Sonnet will become majority owners of Charlotte, North Carolina-based Chanticleer’s common stock — resulting in a company trading on the Nasdaq Stock Market under the Sonnet name.

“This merger is an exciting next step for Sonnet that complements Sonnet’s committed financing of up to $100 million and further supports our commitment to advancing our novel oncology product candidates with the ultimate goal of overcoming persistent challenges in cancer care,” Sonnet founder and CEO Pankaj Mohan said in a prepared statement. “As we become a publicly-traded entity, we look forward to accelerating the execution of our proprietary platform technology for innovating immune therapeutics that includes our pipeline of clinical and preclinical therapeutic candidates.”

The new company will focus on Sonnet’s clinical stage pipeline of oncology drugs and its technology platform looking at other human diseases.

“The transaction with Sonnet comes after a thorough review of Chanticleer’s current operations and strategic alternatives,” Chanticleer Chairman and CEO Mike Pruitt said in a statement. “The decision by our management and board to choose Sonnet to be our merger partner will allow our shareholders to participate in a dynamic company with a robust pipeline, backed by a sizeable commitment from an institutional investor to continue the development of the drug candidates.”

Chanticleer will spin off its restaurant operations into a new, separate company that would be owned by current stockholders and eventually traded publicly, according to a news release on the transaction. That company would own fast-casual and full-service restaurant chains including American Burger Co., BGR – Burgers Grilled Right, Little Big Burger and more.

“With the participation of the current shareholders of Chanticleer in the publicly-traded shares of Sonnet, our current shareholders will not only maintain their ongoing investment in the restaurant business, but will also have potential upside from the potential growth and expansion of Sonnet,” Pruitt said.

Upon completion of the merger, Chanticleer will become known as Sonnet BioTherapeutics Holdings Inc., with Mohan serving as chairman and CEO and the current Sonnet board leading the new company.

Chardan Capital Markets is exclusive adviser to Sonnet on the deal, while Lowenstein Sandler LLP is legal counsel. Libertas Law Group is legal counsel to Chanticleer, while K&L Gates LLP is special tax counsel.