Medical Device Daily
Making good on its promise last month to merge with another company, Corautus Genetics (Atlanta) reported that it is combining with VIA Pharmaceuticals (San Francisco), a privately held drug development company
The companies believe the merger will create a drug development company focused on compounds that target inflammation in the blood vessel wall as an innovative approach to the treatment of cardiovascular disease.
Corautus' merger comes after it reported in November that it was abandoning further clinical trials of VEGF-2 for the treatment of cardiovascular and peripheral vascular disease and it released several members of its management team (Medical Device Daily, Nov. 7, 2006).
Until then, the company had been focusing on the development of gene transfer therapy products for the treatment of severe angina and peripheral vascular disease, with the goal of developing a gene therapy product candidate using the VEGF-2 gene to promote therapeutic angiogenesis in ischemic muscle, primarily in its Genetic Angiogenic Stimulation (GENASIS) trial.
The FDA in April blocked further enrollment in GENASIS following adverse patient events (MDD, April 11, 2006), primarily three incidents of pericardial effusion in which excess fluid builds in the sac surrounding the heart. The company responded saying it would pursue further analysis of the trial and gather additional data, and the FDA in July then put the trial on "partial hold" (MDD, July 14, 2006).
The combined company's lead product candidate will be VIA-2291, a small-molecule drug that targets inflammation in the blood vessel wall, believed to be a key disease process in atherosclerosis. VIA filed an investigational new drug (IND) application with the FDA in the first quarter of 2006 and is currently conducting two Phase II clinical trials of VIA-2291 treating vascular inflammation in patients undergoing carotid endarterectomy and patients at risk for recurrent cardiovascular events following acute coronary syndrome.
"The Corautus team has spent the past several months reviewing strategic opportunities," said Richard Otto, CEO of Corautus. "The novel therapeutic development program underway at VIA addresses a large cardiovascular patient population.
The merger agreement has been approved by the boards of directors of Corautus and VIA. Corautus will issue, and VIA stockholders will receive, shares of Corautus common stock in exchange for their shares of VIA stock. It is expected that VIA stockholders will own about 76.4% and existing Corautus stockholders will own about 23.6% of the combined company on a pro forma, fully-diluted basis based on the delivery of $12 million of net cash at closing (the actual percentages to be determined based on Corautus's net cash at closing).
The transaction is subject to Corautus maintaining certain minimum cash levels, as well as certain other customary conditions, including obtaining stockholder approval. Corautus stockholders holding about 34% of the outstanding voting stock of Corautus and Bay City Capital holding about 89% of the outstanding voting stock of VIA have entered into voting agreements whereby they have agreed to vote their shares in favor of the merger.
Prior to closing, VIA said it intends to apply to have the combined company's common stock approved for initial listing on the NASDAQ Capital Market under the symbol VIAP. The transaction is expected to close in 2Q07.
Following the closing of the transaction, Lawrence Cohen, PhD, president/CEO of VIA will hold the same titles for the combined company. James Stewart, senior VP/CFO of VIA, will become the combined company's CFO.
Morgan Keegan & Co. served as financial advisor to Corautus. Lazard Freres & Co. served as financial advisor to VIA.
Applied DNA Sciences (APDN; Stonybrook, New York), a DNA security solutions company, reported that it has in-licensed the rights to PHRI Properties' (Newark, New Jersey) molecular beacons technology.
APDN said it plans to incorporate the molecular beacons in its next generation instant detection devices. These products will complement the existing detection methods being utilized by APDN and its customers and will offer another method for quick on-site verification of customers' products.
APDN's SigNature program consists of three steps: creating and encapsulating a specific encrypted DNA segment, applying it to a product or other item, and detecting the presence or absence of the specific agent. Once applied, the presence of any of our SigNature DNA markers can be detected by APDN or a customer in a simple spot test. The instant detection device being developed using the molecular beacons technology will provide an alternate simple, instant on-site authentication test which can detect SigNature DNA markers in a range of different media, including but not limited to ink, thread, and adhesives.