Intec Pharma Ltd. (NTEC) stock prices were up by 3.02% as of the market closing on May 20th, 2021, bringing the price per share up to USD$3.75 at the end of the trading day.
Merger with Decoy Announced
March 15th, 2021 saw NTEC announce that it had entered into a definitive agreement with Decoy Biosystems. Collaboration with the private, preclinical-stage biotech company is hoped to facilitate the development of novel, multi-targeted products that have the potential to safely prime both innate and adaptive anti-tumor and anti-viral immune responses.
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Merger Details
As per the agreement, the joint venture will advance its immunotherapy platform that serves to combat a myriad of tumor types and chronic viral infections. Decoy has engaged in a pre-IND meeting with the U.S FDA and anticipates the filing of an IND before the end of the fiscal year 2021. The company hopes to initiate Phase 1 of its clinical trial to target solid tumors and lymphomas in the fiscal year 2022. The transaction will be transformative for NTEC, who can now enjoy a solid clinical pipeline that is grounded in an innovative immunotherapy platform, giving the company entry into the immune-oncology sector.
Transaction Terms
As per the exchange ratio formula in the merger agreement, former Decoy stockholder will retain ownership of 75% of the combined company, as calculated on a fully diluted basis. The remaining 25% of shares will be held by existing Intec shareholders. The implemented allocation will vary based on each company’s net cash balance at the time of closing. Also a contributing factor would be the amount of closing financing raised by each company before the merger, with the fundraising resulting in the dilution of security holders of both Decoy and Intec Pharma on a Pro-forma basis.
Closing of Merger
The Boards of Directors of both companies have approved the transaction, with the merger expected to close in the third quarter of the fiscal year 2021. As of the merger closing, the company’s board of directors is expected to consist of eight members, five of whom are currently on NTEC’s board and the remaining three members of Decoy’s current Board of Directors.
Remaining Variables
The deal is on track to be executed, subject to the approval of shareholders of each company. The agreement is also contingent upon the successful domestication of NTEC to Delaware, as well as the disposition of NTEC’s Accordion Pill business. Apart from customary closing conditions, the deal is also dependent upon the continued listing of the combined company on Nasdaq, as well as the raising of closing finance by each company before the merger.
Future Outlook for NTEC
The collaborative efforts of the combined company will facilitate the advancement of NTEC’s first clinical candidate to human trials with an end goal of creating best-in-class anti-tumor and anti-viral therapies for high unmet need indications. Armed with their joined resources, the merger is expected to usher in significant and sustained increases in shareholder value following the commercialization of the company’s treatments.
