Synta Pharmaceuticals announces merger with Madrigal
Synta Pharmaceuticals (NASDAQ: SNTA) has announced a definitive merger agreement with Madrigal Pharmaceuticals under which the newly-formed company will focus on the development of small-molecule drugs addressing unmet needs in cardiovascular-metabolic diseases and non-alcoholic steatohepatitis (NASH).
This new move from Synta comes following a turbulent 2015, which saw the company shed almost 20% of its workforce, as well as the cancelling of a Phase III trial of its lung cancer candidate, ganetespib, in use with chemotherapy, when it was found to yield no better outcomes than with chemotherapy alone.
A core of the new company’s focus will be Madrigal’s lead compound, MGL-3196, which is a Phase II-ready liver directed selective thyroid hormone receptor-ß. This is intended for the treatment of NASH and heterozygous and homozygous familial hypercholesterolemia.
Dr Rebecca Taub, founder and chief executive officer of Madrigal, says: “MGL-3196 is designed to specifically target thyroid hormone beta receptors in the liver involved in metabolism and cholesterol regulation and avoid side effects associated with thyroid hormone receptor activiation outside the liver… Madrigal has designed Phase II clinical programs to establish proof of concepts in both NASH and FH with data readouts for each program anticipated throughout 2017.”
Under the terms of the deal, Madrigal will merge with a wholly-owned subsidiary of Synta in all-stock transaction. Synta will acquire all outstanding shares of Madrigal in exchange for approximately 253.9 million newly issues shares of Synta common stock. Upon completion, it is expected that existing Synta shareholders will hold 36%, while Madrigal shareholders will own 64% of the combined company.
The combined company will be named Madrigal Pharmaceuticals, and Paul A. Friedman will become chairman and chief executive officer.
Keith R. Gollust, chairman of Synta, comments: “Following an extensive review of strategic alternatives, Synta’s board of directors believes that a merger with Madrigal Pharmaceuticals offers shareholders the most compelling opportunity for enhancing long-term value. Madrigal’s lead compound, MGL-3196, is a selective THR-ß agonist with a unique lipid lowering profile that has been validated through early clinical and preclinical studies. The combined company will be well capitalised with a lead program that offers both a potentially substantial commercial opportunity in NASH, and an efficient clinical development plan with commercial potential in genetic lipid disorders.”
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