NEW YORK and NESS ZIONA,
Israel, July 17, 2019 /PRNewswire/ -- Chardan Healthcare
Acquisition Corp. (NYSE: CHAC, "CHAC"), a special purpose
acquisition company ("SPAC") sponsored by affiliates of Chardan
Capital Markets LLC ("Chardan"), announced today that it has
entered into a definitive agreement for a business combination with
BiomX Ltd. ("BiomX"), a microbiome company developing both natural
and engineered phage therapies.
Assuming no redemption of CHAC shareholders, the combined
company will have an initial market capitalization of approximately
$254 million. Upon closing of the
transaction, it is expected that CHAC will be renamed BiomX and
remain on the NYSE American Stock Exchange, listed under a new
ticker symbol.
CHAC has entered into a mix of commitments including purchase
and sale, backstop, and voting agreements with BiomX and with
investors -- including OrbiMed, RTW Investment, Johnson &
Johnson Innovation - JJDC, Inc. (JJDC), Takeda Ventures, Inc.,
MiraeAsset, Seventure Partners' Health for Life Capital I, SBI
Japan-Israel Innovation Fund, as well as RM Global Partners (RMGP)
BioPharma Investment Fund -- so that the $50
million minimum closing condition for the transaction has
been satisfied prior to today's announcement.
Proceeds from the transaction will provide BiomX with
substantial growth capital and the flexibility of a public listing
to further accelerate BiomX's expansion as a leading microbiome
product discovery company. BiomX is developing customized
phage-based products designed to improve the appearance of
acne-prone skin and eradicate harmful bacteria in chronic diseases.
The company's pipeline includes preclinical candidates for
acne-prone skin, inflammatory bowel disease (IBD), primary
sclerosing cholangitis (PSC), and colorectal cancer (CRC). BiomX's
product for acne-prone skin is anticipated to begin clinical
testing by the end of 2019. The combined company will continue to
be led by BiomX's experienced management team headed by Chief
Executive Officer Jonathan
Solomon.
"We created CHAC to partner with an innovative biotechnology
company that would benefit from a public listing, could use our
cash resources to implement groundbreaking clinical work, and whose
products and technology could lead to significant growth and drive
long-term returns for our shareholders," said Jonas Grossman, CHAC's President and Chief
Executive Officer. "BiomX has all those qualities, along with an
experienced management team ready to take the reins of a public
company. We believe this transaction leaves BiomX with a strong
balance sheet and sufficient cash for the company to reach multiple
value inflection points in its leading clinical programs."
George Kaufman, CFO and Head of Strategy at CHAC,
noted, "We believe we have structured a transaction that will
deliver value to all stakeholders and creates opportunity for new
investors. We are excited to make use of inherent features of
the SPAC in combination with the fundamental qualities of BiomX and
supportive shareholders for the benefit of all of our
partners."
"Having our existing investors participate in this financing,
along with additional life science funds who have not previously
invested in BiomX, demonstrates their confidence in our approach of
using both natural and engineered phage cocktails to eradicate
harmful bacteria in chronic diseases and conditions," said
Jonathan Solomon, Chief Executive
Officer of BiomX. "This merger will provide us with substantial
additional financial resources that will support our upcoming
clinical trials, speed up our preclinical research and help expand
our manufacturing capabilities."
Gbola Amusa, M.D., C.F.A,
Executive Chairman of CHAC, added, "We see growing investment
momentum and interest in phage as a potentially disruptive and safe
precision tool for the eradication of specific harmful strains of
bacteria. BiomX is well positioned to develop novel phage therapies
based in part on its unique blend of state-of-the-art microbiome,
phage, computational biology, and synthetic biology technologies
originally licensed from sources like the Weizmann Institute and
MIT. In addition, BiomX is targeting
substantial commercial markets. The global market for cosmetics
products for acne-prone skin according to WiseGuy Reports was
approximately $4 billion in 2018.
EvaluatePharma estimates the global IBD and global colorectal
cancer markets, respectively, generated $17.7 billion and $8.4
billion in prescription sales in 2018. For another of
BiomX's target indications, PSC, we estimate the total addressable
US market could be more than $3.5
billion in sales."
"We have supported BiomX's development and growth because of its
talented management team and innovative drug development
capabilities," said Robbie Woodman,
Ph.D., Senior Partner at Takeda Ventures, Inc. and member of the
BiomX Board of Directors. "The combined company is well positioned
to advance its programs for acne-prone skin, IBD and PSC."
The respective boards of directors of both CHAC and BiomX have
approved the proposed transaction. Completion of the transaction,
which is expected in October 2019, is
subject to approval by CHAC stockholders and satisfaction of other
closing conditions.
Chardan is acting as CHAC's M&A and capital markets advisor.
Cantor is acting as capital markets advisor to BiomX. Loeb &
Loeb LLP and Meitar Liquornik Geva Leshem Tal are representing
CHAC. Goodwin Procter LLP, Mayer Brown LLP and ZAG-S&W Zysman
Aharoni Gayer & Co are representing BiomX.
Summary of Transaction
CHAC raised $70 million in its IPO which is now held in a
trust account. Under the terms of the proposed transaction
announced today, CHAC will issue 16.625 million shares and vested
securities to current securityholders of BiomX. Certain BiomX
shareholders may, subject to the terms of the investment
agreements, receive up to an additional 6.0 million CHAC shares:
2.0 million shares if the share price exceeds $16.50 by fiscal year 2021, an additional 2.0
million shares if the share price exceeds $22.75 by fiscal year 2023, and an additional 2.0
million shares if the share price exceeds $29.00 by fiscal year 2025.
After giving effect to the investor transactions being
undertaken in order to meet the minimum cash condition, and
assuming no redemption from CHAC shareholders, it is estimated that
the current securityholders of BiomX will own approximately 73% of
the issued and outstanding vested securities in the combined
company at closing.
Post-closing, Mr. Solomon and three current BiomX directors will
join Mr. Grossman and Dr. Amusa from CHAC on the seven-person board
of directors. An additional board member will be designated by
BiomX.
The description of the business combination contained herein is
only a summary and is qualified in its entirety by reference to the
definitive agreement relating to the business combination, a copy
of which is filed by CHAC with the Securities and Exchange
Commission ("SEC") as an exhibit to a Current Report on Form 8-K.
Additional information about the proposed transaction is described
in CHAC's preliminary proxy statement relating to the business
combination, which has been filed with the SEC and is available
at
https://www.sec.gov/Archives/edgar/data/1739174/000121390019012931/prem14a0719_chardanhealth.htm.
Conference Call Scheduled
CHAC will host a conference
call to discuss the proposed business combination with the
investment community on July 17, 2019
at 8:30 AM EDT. Investors may
listen to the conference call by dialing (877) 705-6003 toll-free
in the U.S. or (201) 493-6725 internationally. The conference ID
number is 13692693. The conference call webcast will be available
at http://public.viavid.com/index.php?id=135425. A related
investor presentation with more detailed information regarding the
proposed transaction will be furnished today to the SEC, and can be
viewed at the SEC's website at www.sec.gov. A transcript of
the investor call, when available, as well as the investor
presentation, can also be found on the BiomX website
provided below.
About BiomX
BiomX is a preclinical stage microbiome
company developing both natural and engineered phage cocktails
designed to target and destroy bacteria that affect the appearance
of skin, as well as harmful bacteria in chronic diseases, such as
IBD, PSC, and cancer. BiomX discovers and validates proprietary
bacterial targets and customizes phage compositions against these
targets.
www.biomx.com.
No portion of BiomX's website is incorporated by reference into
or otherwise deemed to be a part of this press release.
About Chardan Healthcare Acquisition Corp.
CHAC is a
special purpose acquisition company formed for the purpose of
effecting a merger, acquisition, or similar business combination.
CHAC raised $70.0 million in
December 2018 for the purpose of
combining with a public or privately-held operating business. CHAC
was founded and sponsored by affiliates of Chardan Capital Markets
LLC. CHAC is Chardan's fifth publicly traded acquisition
vehicle.
Safe Harbor Language
This press release contains
certain "forward-looking statements" within the meaning of the
"safe harbor" provisions of the US Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by
words such as: "target," "believe," "expect," "will," "may,"
"anticipate," "estimate," "would," "positioned," "future," and
other similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. Examples
of forward-looking statements include, among others, statements
made in this press release regarding the proposed business
combination, including the anticipated initial enterprise value and
post-closing equity value, the benefits of the proposed business
combination, integration plans, expected synergies and revenue
opportunities, anticipated future financial and operating
performance and results, including estimates for growth, the
expected management and governance of the combined company, and the
expected timing of the proposed transactions contemplated by the
definitive agreement. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on CHAC and BiomX managements' current beliefs,
expectations and assumptions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict
and many of which are outside of our control. Actual results and
outcomes may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause actual results and outcomes to differ materially from those
indicated in the forward-looking statements include, among others,
the following: (1) the occurrence of any event that could give rise
to the termination of the agreement with respect to the business
combination; (2) the outcome of any legal proceedings that may be
instituted against CHAC, the combined company, or others following
the announcement of the business combination and the business
combination agreement; (3) the inability to complete the business
combination due to the failure to obtain approval of CHAC's
stockholders or to satisfy other conditions to closing in the
business combination agreement; (4) changes to the proposed
structure of the business combination that may be required or
appropriate as a result of applicable laws; (5) the ability to meet
NYSE American listing standards following the consummation of the
business combination; (6) the risk that the business combination
disrupts current plans and operations of BiomX as a result of the
announcement and consummation of the business combination; (7) the
ability to recognize the anticipated benefits of the business
combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with third parties and
partners, obtain adequate supply of raw materials and retain its
management and key employees; (8) costs related to the business
combination; (9) changes in applicable laws or regulations; (10)
the possibility that BiomX or the combined company may be adversely
affected by other economic, business, regulatory, and/or
competitive factors; (11) BiomX estimates of expenses; (12) the
impact of foreign currency exchange rates and interest rates
fluctuations on the results of BiomX or the combined company; and
(13) other risks and uncertainties indicated in the proxy statement
of CHAC to be filed by CHAC with the SEC in connection with the
business combination, including those under "Risk Factors" therein,
and other documents filed or to be filed from time to time with the
SEC by CHAC. A further list and description of risks and
uncertainties can be found in CHAC's Prospectus dated December 14, 2018 filed with the SEC and in the
proxy statement on Schedule 14A that will be filed with the SEC by
CHAC in connection with the proposed transaction, and other
documents that the parties may file or furnish with the SEC, which
you are encouraged to read. Any forward-looking statement made by
us in this press release is based only on information currently
available to CHAC and BiomX and speaks only as of the date on which
it is made. CHAC and BiomX undertake no obligation to publicly
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
information, future developments or otherwise, except as
required by law.
Important Information
BiomX Ltd. ("BiomX"), Chardan
Healthcare Acquisition Corp. ("CHAC"), and their respective
directors, executive officers and employees and other persons may
be deemed to be participants in the solicitation of proxies from
the holders of CHAC common stock in respect of the proposed
transaction described herein. Information about CHAC's directors
and executive officers and their ownership of CHAC's common stock
is set forth in CHAC's Prospectus dated December 14, 2018 filed with the SEC, as modified
or supplemented by any Form 3 or Form 4 filed with the SEC since
the date of such filing. Other information regarding the interests
of the participants in the proxy solicitation will be included in
the proxy statement pertaining to the proposed transaction when it
becomes available. These documents can be obtained free of charge
from the sources indicated below.
In connection with the transaction described herein, CHAC will
file relevant materials with the SEC including a proxy statement on
Schedule 14A. Promptly after filing its definitive proxy statement
with the SEC, CHAC will mail the definitive proxy statement and a
proxy card to each stockholder entitled to vote at the special
meeting relating to the transaction. INVESTORS AND SECURITY HOLDERS
OF CHAC ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS
OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN
CONNECTION WITH THE TRANSACTION THAT CHAC WILL FILE WITH THE SEC
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT CHAC, BIOMX AND THE TRANSACTION. The definitive
proxy statement, the preliminary proxy statement and other relevant
materials in connection with the transaction (when they become
available), and any other documents filed by CHAC with the SEC, may
be obtained free of charge at the SEC's website (www.sec.gov) or by
writing to Chardan Healthcare Acquisition Corp., 17 State Street,
21st Floor, New York, NY
10004.
CHAC contact:
Jonas
Grossman
Chief Executive Officer
Chardan Healthcare Acquisition Corp.
+1-212-920-9000
grossmanj@chardanspac.com
BiomX contact:
Assaf
Oron
Chief Business Officer
BiomX
+972-54-2228901
assafo@biomx.com
Media contact:
Shai
Biran, Ph.D.
MacDougall
+1-781-235-3060
biomx@macbiocom.com
View original
content:http://www.prnewswire.com/news-releases/chardan-healthcare-acquisition-corp-announces-merger-agreement-with-biomx-ltd-300886509.html
SOURCE Chardan Healthcare Acquisition Corp.