Boston, MA 04/16/2014 (wallstreetpr) – Zalicus Inc. (NASDAQ:ZLCS) continues to surge in the market by highs of 65.05% after announcing a merger agreement with Boston Based, Epirus biopharmaceutical, in an all-stock transaction. Epirus specializes in the development and commercialization of monoclonal antibodies. Following closure of the transaction, Zalicus will be renamed Epirus Biopharmaceutical Inc.
Zalicus to Operate under a New Leadership
The merger will also see Zalicus operating under the leadership of Epirus Biopharmaceuticals with Amit Munshi taking over as the chief executive and president the new company. The company’s board of directors will be made of representatives from both sides with Dr. Mark H.N acting as the Chairman of the company.
The merger will result in a NASDAQ listed publicly traded company able to ensure patients constant and reliable access to important medicines. The merger agreement comes at the back of Epirus announcing it had successfully closed a $36 million financing led by Livzon Mabpharm on its Series B round.
Terms of the Agreement
The amount of holding that Zalicus Inc. (NASDAQ:ZLCS) shareholders will be entitled to, as part of the agreement has not yet been determined. Stakes will be determined based on Zalicus net cash at the day of closing. On a pro-forma basis, Zalicus shareholders will be entitled to a 19% of the combined company with Epirus shareholders being entitled to the remaining 81%, if Zalicus net cash at the day of closing comes in at $12 million or more.
Zalicus shareholders will be entitled to 17% of the new entity if the company’s net cash clocks in at $9 million but less than $12 million at the day of closing with Epirus shareholders being entitled to the remaining 83%. Another scenario entails Zalicus cash flow streaming in at $9 million or less, in this case its shareholders will be entitled to 14% of the new company with the remaining percentage going to Epirus shareholders.
There are no assurances at the moment that Zalicus Inc. (NASDAQ:ZLCS) will try to increase its cash flow between now and the closing date, to ensure its shareholders walk away with a big stake of the new company. Full merger now awaits approval by majority shareholders in both companies as well as customary closing conditions. Board of directors from both companies have unanimously agreed on the transaction awaiting shareholders’ approval.
