NEW YORK (GenomeWeb) – Miragen Therapeutics and Signal Genetics announced today that they have agreed to merge. The deal will result in a company fully focused on Miragen's microRNA therapeutics programs following the divestiture of Signal's molecular diagnostic assets.
Privately held Miragen will pick up Signal's Nasdaq listing, allowing it to hit a longstanding goal of reaching the public markets. Additionally, a group of new and existing investors has committed to invest $40 million into the combined company immediately prior to the merger, giving Miragen an infusion of cash to advance its clinical drug candidates such as the Phase I lymphoma treatment MRG-106 and the Phase I anti-fibrosis agent MRG-201.
"We believe microRNA targeting therapeutics have the potential to address complex diseases with high unmet medical need and Miragen will be well positioned to execute on our programs," Miragen President and CEO William Marshall said in a statement. "We believe proceeds from the concurrent financing will allow us to advance our lead assets in hematological malignancy and pathological fibrosis into later stage clinical evaluation."
Under the terms of the merger, Miragen's existing stockholders and investors in the upcoming financing will receive newly issued shares of Signal common stock. Following the close of the transaction, current Signal shareholders will own about 4 percent of the new company, with current Miragen shareholders holding about 69 percent. Investors participating in the financing round will own about 27 percent, excluding the shares they already hold.
The deal has been approved by the boards of both companies and is expected to close in the first quarter of 2017. The new company will take the Miragen name and will apply to change Signal's Nasdaq ticker symbol to MGEN.
Signal’s directors and executive officers will resign from their positions upon consummation of the merger, and Miragen's existing team will lead the company. The board of directors of the new firm will consist of eight members, all designated by Miragen.
In conjunction with the merger, Signal said it has signed a non-binding letter of intent to sell all intellectual property assets related to its MyPRS multiple myeloma prognostic risk assay to an unnamed large global diagnostic laboratory. The net proceeds of the sale are expected to be equal to the anticipated costs of operating the MyPRS business through the projected closing date of the merger, making the transaction equivalent to the immediate cessation of the MyPRS business from a cash perspective.
Signal also said that its board has approved a 1-for-15 reverse stock split, which will become effective following the close of the market on Nov. 4. The move is designed to help Signal regain compliance with the Nasdaq's $1 minimum bid requirement.
During early morning trading Tuesday, shares of Signal were up 5 percent at $.35.