Chiasma, Inc. (NASDAQ: CHMA), a commercial-stage biopharmaceutical company, specializing to develop and commercialize oral drugs using transient permeability enhancer technology platform to reduce the burden of chronic injections and for the treatment of rare and severe conditions globally, announced entry into a definitive merger agreement to be acquired by Amryt Pharma plcin an all-stock combination, as well as financial results for the first quarter completed on March 31, 2021. CHMA stock price saw a substantial rise adjacent to the news.
At last check-in premarket trading, shares of Chiasma Inc. (CHMA) were up 39.08% at $3.95.CHMA’s stock lost -4.05% to close Tuesday’s session at $2.84. Shares of the company fluctuated between $2.79 and $2.98 throughout the day. For the last six months, the stock has lost a total of -24.27%, and over the last three months, the stock has decreased by -29.18%.
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Now What
In accordance to the conditions of the transaction, each share of Chiasma common stock issued and outstanding before the consummation of the merger will be replaced with 0.396 Amryt American Depositary Shares, each of which depict five Amryt ordinary shares.
The transaction is anticipated to improve the combined company’s commercial and medical infrastructure worldwide. Amrytintends to use its distinctive expertise and commercial platforms to speed up the launch of MYCAPSSA in the USA and also to seek MYCAPSSA compliance and launch globally.
As per the fixed exchange ratio, Amryt shareholders will own approximately 60% of Amryt as the transaction is completed and Chiasma shareholders will own approximately 40% of Amryt after the transaction. Chiasma’s current royalty interest financing agreement is anticipated to be completely paid back on closing, delivering a high margin asset to Amryt’s portfolio.
Completion of the transaction is subject to the approval of Amryt and Chiasma shareholders and several other customary closing conditions, which may include approval by the relevant authorities. The transaction is expected to close in the third quarter of 2021. Considerable value is anticipated between the combined group due to cost synergies, expected to be within the ball park figure of $50m. Both Amryt and Chiasma consist of an overlap in customer call point and combining operations due to the complementary nature of their business, expecting sales to sky rocket in the future.
Conclusion
Similar objectives of both the companies, combined with a specified target market and cost synergy between the companies has raised investor interest with CHMA stock rising immensely at last check. Furthermore, increase in net product revenue for CHMA and positive data also increased shareholder expectations for the company.