A plan by Poolbeg Pharma, the clinical-stage biopharmaceutical company led by serial entrepreneur Cathal Friel, to merge with Nasdaq-listed peer Hookipa Pharma has secured backing from a major shareholder in the target company.
Irish-based, but London-listed, Poolbeg said on Tuesday that US biopharma giant Gilead, which owns 19.4 per cent of Hookipa, plans to support a merger if an agreement between both companies is reached.
Poolbeg announced last week that it is in early talks with Hookipa. An all-share deal – being engineered as a reverse takeover – would see Poolbeg investors initially take a 55 per cent stake in the merged entity, with shareholders in its prospective partner, Hookipa Pharma, left with the remainder.
A planned $30 million (€28.9 million) equity raise immediately after the tie-up would dilute the stakes of legacy investors in both. Poolbeg’s shareholders holding in the combined entity may fall to about 40 per cent as a result, both companies said last week.
Shares in Hookipa, where Irish life sciences industry veteran Julie O’Neill is chairperson, slumped by almost 76 per cent in 2023 as the company went through senior management changes and announced three rounds of large job cuts.
The latest, announced at the end of November, pointed to the group reducing its workforce to below 20 – down from 180 at the start of 2024.
What’s in store for 2025?
Industry observers say Poolbeg sees a turnaround opportunity at Hookipa.
Shares in Poolbeg rallied as much as 25 per cent in London on Tuesday – though the remain down by about a third since the merger discussions were announced last week.
Hookipa has partnered with Gilead to develop therapies that are intended to provide functional cures for hepatitis B virus and human immunodeficiency virus-1, which is better known as HIV.
The current state of the merger talks would see legacy Hookipa shareholders retain entitlement to 55 per cent of milestone payments from both therapy development programmes, subject to certain milestones being achieved. The total potential milestone payments from both could be worth as much as $407.5 million, according to last week’s statement announcing the talks.
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