MDRNA expands oncology and RNAi platform with $46 million stock buy of Cequent Pharmaceuticals

Two US RNAi-based drug discoverers and developers, MDRNA and Cequent Pharmaceuticals, have reached agreement to merge, with the latter being acquired in an all-stock deal valued at around $46 million. The news saw MDRNA's share price rise 8% to $1.19 by close of last Thursday's trading.

The combined company will have multiple proprietary RNAi drug discovery platforms with the capability to deliver RNAi-based therapeutics via systemic, local and oral administration. In addition, the acquisition expands MDRNA's oncology pipeline with a product for familial adenomatous polyposis (FAP) - a genetic disorder that is a precursor to colon cancer - that will soon begin Phase I clinical testing under an Investigational New Drug application filed with the US Food and Drug Administration. The transaction will include certain loan provisions that will fund MDRNA operations through the anticipated closing of the merger in early July 2010. . In addition, Cequent will have certain cash amounts on hand at the close of the acquisition which will fund the combined operations into December 2010.

"We anticipate that this transaction will accelerate the development of the most promising products of both companies," commented Bruce Thaw, chairman of MDRNA. "We believe that the combined company will be in a strong position to advance multiple RNAi drug discovery platforms, establish premier R&D partnerships with large pharmaceutical and biotechnology companies and accelerate RNAi-based therapeutics to patients in need," he added.