Transcept Pharma And Paratek Pharma To Merge

(RTTNews) - Transcept Pharmaceuticals Inc. (TSPT) and Paratek Pharmaceuticals Inc., a privately-held biopharmaceutical company, announced Tuesday that they reached a definitive merger agreement by which the stockholders of Paratek will become the majority owners of Transcept and the operations of Transcept and Paratek will be combined.

The boards of directors of both Transcept and Paratek have unanimously approved the proposed transaction.

Transcept said that Paratek stockholders will receive newly issued shares of common stock of Transcept in connection with the merger contemplated by the merger agreement. Transcept will issue approximately 167.5 million new shares of its common stock to Paratek stockholders under the exchange ratio formula defined in the merger agreement.

Upon the closing of the merger, existing Paratek equity holders are expected to own approximately 37.9 percent of Transcept, the persons investing in Paratek as of immediately prior to the closing of the merger are expected to own approximately 51.7 percent of Transcept, and existing Transcept equity holders are expected to own approximately 10.4 percent of Transcept, each on a fully-diluted basis.

Subject to regulatory approvals and customary closing conditions, the transaction is currently expected to close during the second half of 2014.

The Combined organization is expected to be capitalized with cash and cash equivalents of between approximately $108 million and $111 million at the closing of the transaction, comprised of between approximately $15 million and $18 million of cash on hand at Transcept and Paratek.

As part of the proposed transaction, new investors, certain Transcept stockholders, and certain Paratek stockholders will invest approximately $93 million in the combined organization.

According to Transcept, The executive officers of Transcept will resign from their positions with Transcept upon the closing of the merger, and the executive officers of Paratek will assume their respective positions in Transcept.

Glenn Oclassen, Chief Executive Officer and Chairman of the Transcept said, "The transaction also provides for our stockholders an additional special cash dividend and the opportunity to realize any upside potential from our INTERMEZZO and TO-2070 assets."

Paratek Pharmaceuticals announced that Michael Bigham, Partner at Abingworth LLP, has been appointed as Chairman of the Board of Directors and Chief Executive Officer. In addition, Dr. Evan Loh, Chief Medical Officer at Paratek, has been promoted to President and CMO and will continue to serve on the Board of Directors.

Following the closing of the merger, the Board of Directors of Transcept is expected to consist of a total of seven members, two of whom will be designated by Transcept prior to the closing of the merger, and five of whom will similarly be designated by Paratek (and which will include the Chief Executive Officer of the combined organization).

If the transaction is consummated, Transcept's name will be changed to Paratek Pharmaceuticals, Inc., and Transcept intends to apply to change its ticker symbol on The NASDAQ Global Market to "PRTK".