Struggling La Jolla Pharma saved by merger with Adamis

San Diego firm La Jolla Pharmaceutical, which has been struggling financially since it had to drop development of its Phase III lupus drug Riquent (abetimus sodium) in February, has entered into a definitive merger agreement with fellow USA-based Adamis Pharmaceuticals. On closing, the combined company will focus on the development and commercialization of therapeutic products for a variety of viral diseases, including hepatitis and influenza.

Adamis recently launched a pre-filled epinephrine syringe and is seeking to generate near-term revenue that can be used to support development efforts for product candidates representing larger market opportunities. It is anticipated that the merged company will be named Adamis Pharmaceuticals and be headquartered in San Diego, California.

Under the terms of the deal, which were unanimously approved by the boards of both companies, Adamis will be merged with and into a wholly-owned subsidiary of La Jolla. Immediately prior to closing, La Jolla will implement a reverse stock split; the precise ratio of this will be determined in accordance with the terms of the merger agreement and is dependent on La Jolla's net cash at closing and Adamis' stock price prior to closing, subject to a variable discount (which in no event will such discount yield a stock price that is less than $0.20 or greater than $1.50).