Tobira Therapeutics Inc (NASDAQ:RGDO) has executed a reverse merger with Regado Bioscience raising $40 million. The money is targeted at a pervasive liver disease. Tobira will get $27 million in a stock sale and $13 million in debt which has already been converted to common stock. On Tuesday, Tobira made a 9 for one reverse stock split that gave its 17.4 million outstanding shares.
The merger has expanded Tobira’s R&D budget to $70 million. The money allows Tobira to move forward with its research on cenicriviroc (CVC) which is a therapy for non-alcoholic steatohepatitis (NASH). The therapy is currently in Phase IIb. NASH is a liver disease that affects millions but has no proven therapy. The commercial prospects surrounding NASH treatment has led to an uptick in R&D activity in the industry.
Tobira CEO Laurent Fisher said that the company’s lead development program of CVC in NASH has been funded till the latter part of 2017. The funding is well past the expected primary endpoint in 2Q2016. Laurent further added that the merger with Regado provides the company with cash to advance the drug in non-alcoholic fatty liver disease and study it in combination with the research.
In 2014, Tobira Therapeutics Inc (NASDAQ:RGDO) had attempted to raise $69 million through an IPO but the plan was called off due to the market turning sour. Regado ran into some serious safety issues with its Phase III anticoagulant that led to a plummeting of its shares just months after its IPO was released. The merger, it seems, is the best possible way for both the parties.
The possibility of success in NASH has attracted many players into the market. The field leader is Intercept Pharmaceuticals Inc (NASDAQ:ICPT) whose obeticholic acid is in its Phase III after showing promising results in the mid stage. Gilead Sciences, Inc. (NASDAQ:GILD) has also come into the NASH field with $470 million deal for Phase II treatment.