Innovate Biopharmaceuticals Announces Successful Merger Completion
Tuesday, January 30, 2018
GlobeNewswire • January 30, 2018
- Completion of Merger with Monster Digital, Inc.
- Shares of combined company will begin trading on Nasdaq with new ticker INNT and will reflect a 1 for 10 reverse split on Wednesday, January 31, 2018
- Concurrent financing of more than $21 million
- Phase 3 clinical trials for larazotide acetate (INN-202) for celiac disease expected to commence Q2-2018
RALEIGH, N.C., Jan. 30, 2018 (GLOBE NEWSWIRE) -- Innovate Biopharmaceuticals, Inc. (Nasdaq:INNT) a clinical stage biotechnology company focused on developing novel autoimmune and inflammation therapeutics, announced the completion of its merger (the “Merger”) with Monster Digital, Inc. today. In connection with the completed Merger, Monster Digital, Inc. was renamed Innovate Biopharmaceuticals, Inc. Innovate’s rich, late-stage clinical pipeline focuses on addressing unmet needs in diseases such as celiac disease, inflammatory bowel disease (IBD) and nonalcoholic steatohepatitis (NASH). Innovate Biopharmaceuticals shares will continue to trade under Monster Digital’s ticker MSDI on Tuesday, January 30, 2018, and, during such time, Nasdaq share numbers will not reflect the 1 for 10 reverse split that occurred on January 30, 2018. Innovate Biopharmaceuticals shares will commence trading on Nasdaq with the new ticker INNT and will reflect the 1 for 10 reverse split in trading on Wednesday, January 31, 2018.
Commenting on the Merger, Innovate’s CEO, Christopher Prior, Ph.D., stated: “We intend to use the proceeds from the concurrent financing to advance our celiac disease drug candidate into Phase 3 clinical trials with the goal of bringing a much-needed therapy to market for a disease that affects approximately 1% of the population. In addition, we believe that as a public entity we will be able to engage a wider range of investors, which will allow us to advance our mild-to-moderate ulcerative colitis combination therapy into Phase 2 trials and to expand our pipeline.”
Jay Madan, founder and president, of Innovate remarked, “It’s an exciting transition for Innovate as we strive to become a leader in autoimmune and inflammatory drug development for diseases with unmet medical needs. With the continued support from our existing investors, and now with access to the capital markets, our main focus will be rapidly progressing our clinical assets.”
H.C. Wainwright & Co. acted as lead placement agent and GP Nurmenkari, Inc. acted as co-lead placement agent in connection with the concurrent financing. Intuitive Venture Partners acted as exclusive financial advisor for the concurrent financing transaction. Piper Jaffray acted as Innovate’s exclusive financial advisor for the merger, and Wilson Sonsini Goodrich & Rosati, P.C. acted as Innovate’s legal counsel. The Benchmark Company LLC acted as Monster Digital’s financial advisor for the transaction and Manatt, Phelps & Phillips, LLP acted as Monster Digital’s legal counsel.
About the Transaction:
Under the terms of the definitive merger agreement, Innovate shareholders, including investors in a financing that closed concurrently with the Merger, will receive newly issued shares of Monster in exchange for Innovate stock. In connection with and prior to the closing of the Merger, Monster Digital effected a 1-for-10 reverse stock split of its common stock.
As previously disclosed, immediately prior to the effective date of the Merger, Monster completed a spin-off transaction (the “Spin-Off”). As a result of the Spin-Off, all of the business, assets and certain of the liabilities of Monster that were not assumed by Innovate in connection with the Merger were transferred into a private wholly-owned subsidiary of Monster, MD Holding Co., Inc. Further to the Spin-Off, holders of record of Monster’s common stock as of the close of business on January 29, 2018, will receive a pro rata distribution of one share of MD Holding Co., Inc. common stock for each share of Monster common stock held as immediately prior to the Spin-Off.
About Innovate Biopharmaceuticals, Inc.:
Innovate is a clinical stage biotechnology company focused on developing novel autoimmune and inflammation therapeutic drugs.
Innovate’s lead drug candidate, larazotide acetate (INN-202), has successfully met its primary endpoint in a phase 2b efficacy clinical trial for celiac disease. Larazotide successfully completed the End of Phase 2 Meeting with the FDA last year to prepare for expected Phase 3 clinical trials for larazotide in celiac disease in Q2 2018. In clinical studies in more than 800 patients, larazotide demonstrated a favorable safety profile comparable to placebo, due to what Innovate believes is its lack of systemic absorption from the small bowel. Larazotide has also received Fast Track designation from the FDA.