Woodcliff Lake-based Timber Pharmaceuticals, a biopharmaceutical company focused on the development and commercialization of treatments for orphan dermatologic diseases, announced Wednesday it has entered into a definitive merger agreement with California-based BioPharmX Corp.
The merger is expected to be completed in the second quarter of 2020. Upon completion of the merger, BioPharmX will change its name to Timber Pharmaceuticals Inc. and the officers and directors of Timber will become the officers and directors of BioPharmX.
Under the terms of the merger agreement, subject to the approval of BioPharmX’s stockholders and Timber’s members, a wholly-owned subsidiary of BioPharmX will be merged with and into Timber, with Timber surviving the merger as a wholly-owned subsidiary of BioPharmX, according to the companies.
As a condition to the closing of the merger, Timber has agreed to secure no less than $20 million of financing for the combined company.
Timber CEO John Koconis said the merger will give the company the benefit of having shares traded in the public market.
“(We can) expand our investor base as we strategically build our pipeline in rare dermatologic diseases that have no approved treatments,” Koconis said in a statement. “This merger also expands our resources and expertise to build momentum in our development programs targeting new therapies for underserved patient populations living with some of the most serious conditions in medical dermatology.”
BioPharmX CEO David Tierney said the merger will continue the growth of the company.
“Following a comprehensive strategic process led by Locust Walk, a global life sciences transaction firm, we have determined that a merger with Timber and the $20 million financing they are bringing to the transaction, will enable BioPharmX stockholders to participate in Timber’s broader pipeline of drugs to treat rare and orphan dermatological diseases and is in the best interest of our stockholders,” he said in a statement.
Timber is currently advancing a late-stage clinical development pipeline in rare dermatologic diseases.
Following the closing of the merger, the combined company will also evaluate BioPharmX’s Phase 3 ready proprietary topical minocycline gel programs for a strategic partnership, co-development or other non-dilutive value creation strategy. This product has previously been studied by BioPharmX in the treatment of inflammatory lesions of acne vulgaris and papulopustular rosacea.
Here are details of the merger, according to the release:
Under the agreement, following the merger, Timber members and investors will own approximately 88.5% of the outstanding common stock of BioPharmX and BioPharmX stockholders will own approximately 11.5% of the outstanding common stock of BioPharmX. The two companies also entered into a credit agreement, in which Timber has agreed to make a bridge loan to BioPharmX for $2.25 million. Further, in connection with the loan, BioPharmX has issued a warrant to Timber to purchase 2.3 million shares of BioPharmX common stock.
Chardan is acting as the financial advisor to Timber and Lowenstein Sandler LLP is acting as its legal counsel. Locust Walk is acting as the financial advisor to BioPharmX and Akerman LLP is acting as its legal counsel.