Raleigh-based Dara BioSciences to merge with UK's Midatech Pharma
Saturday, June 06, 2015
Raleigh-based Dara BioSciences, Inc., which faced being delisted from Nasdaq, reached a merger deal with Midatech Pharma, based in Oxford, United Kingdom.
Dara shareholders will receive one Midatech share for about every four Dara shares they hold, as well as a potential cash payment if certain sales milestones are met. Current Dara stockholders are expected to own approximately 16 percent of Midatech after the closing of the transaction and Dara shareholders would receive no more than $5.7 million cash.
Dara has been in danger of a Nasdaq delisting for years. In late 2013, the company faced a Nasdaq warning when its stock traded below $1 for 30 consecutive trading days, the same thing that happened in October and November last year. Dara had completed a reverse stock split to increase the price per share.
On Thursday, shares traded up to $1, a 23 percent increase from Wednesday’s close. Midatech is traded on the London Stock Exchange under the symbol "MTPH." Last year, Dara generated $1.9 million in sales, but because of high marketing and general expenses recorded a $9.4 million loss from operations.
Operationally, Dara will become the commercial arm to Midatech in the United States. “The agreement with Midatech provides Dara with the opportunity to maximize and expand Dara’s commercial portfolio based on the depth of resources that are now available within the combined company,” said Dara President and CEO Christopher G. Clement, in a statement accompanying the merger announcement.
bizjournals.com
