BiomX to raise $70m in NYSE reverse merger with Chardan

Jonathan Solomon

The Israeli company's products combine microbiome and phages, two of the hottest medical fields.

Israeli microbiome and phage therapy company Biomx today announced that it was merging with blank check company Chardan Healthcare Acquisition Corp. (CHAC), which is listed on the New York Stock Exchange. The merged company will change its name to BiomX and will be listed at a market cap of $250 million, after money.

Blank check companies are companies founded with no business content, based on the confidence by investors that the founders will find interesting activity to put in them. With the announcement of the identity of the acquired activity, investors have the option of withdrawing from the deal or selling their shares on the stock market to another investor interested in the deal.

BiomX said that it currently had a guarantee of $50 million, some of it from investors who invested in the blank check and decided to stay with the deal and the rest from investors brought by BiomX who bought their shares from the original blank check investors. The company will raise $20 million more by October as part of the deal, bringing the total added to the company's coffers with the closing of the deal to $70 million.

BiomX itself has already raised $56 million, and said that when the merger is closed, it would have $100 million in cash. Assuming that the deal is completed as planned, BiomX's shareholders will own 73% of the merged company. If a number of milestones are fulfilled, they will be able to obtain additional shares.

BiomX's existing shareholders, among them Orbimed, RMGP, Johnson & Johnson, Takeda Ventures, Seventure Partners, and SBI, will continue holding the company's shares. A new investor, RTW Investments, a special medical sector fund, will also enter the picture.

The money to be raised will enable BiomX to begin a Phase I clinical trial of its acne treatment by the end of 2019, start a Phase II trial of this product and a Phase I trial of a product for treatment of Crohn's Disease and colitis in 2020, as well as trials of a product for treatment of primary sclerosing cholangitis (PSC - a chronic liver disease) in 2021. BiomX is also cooperating with Johnson & Johnson on development of additional products, and on cosmetics R&D.

BiomX combines two segments in the forefront of technology: microbiome - research in to the bacterial composition on and inside the human body, and phages - viruses that attack bacteria. The company has developed an algorithm that compares the bacterial composition of healthy and sick people in order to devise hypotheses about which bacteria should be selectively eliminated in order to improve the patient's condition. It will then design phages that will attack that bacteria, like a very selective antibiotic, but leave the other beneficial bacteria alive.

BiomX bases its technology on two breakthrough areas of academic research - microbiome research by Prof. Eran Segal and Prof. Eran Elinav at the Weizmann Institute of Science and phages research by Prof. Rotem Sorek from the Weizmann Institute and Prof. Timothy Lu from the Massachusetts Institute of Technology (MIT). BiomX's CEO is Jonathan Solomon.

Chardan is acting as CHAC's M&A and capital markets advisor. Cantor is acting as capital markets advisor to BiomX. Loeb & Loeb LLP and Meitar Liquornik Geva Leshem Tal are representing CHAC. Goodwin Procter LLP, Mayer Brown LLP and ZAG-S&W Zysman Aharoni Gayer & Co is representing BiomX.

Published by Globes, Israel business news - en.globes.co.il - on July 17, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Jonathan Solomon
Jonathan Solomon
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