Transcept and Paratek join forces in reverse takeover

US pharma company Transcept Pharmaceuticals (Nasdaq: TSPT) and privately-held biopharmaceutical company Paratek Pharmaceuticals they have entered into a definitive merger agreement under which the stockholders of Paratek will become the majority owners of Transcept and the operations of Transcept and Paratek will be combined.

As part of the proposed transaction, new investors (including The Baupost Group, Abingworth LLP, and other institutional investors); certain Transcept stockholders (including InterWest Ventures and Roumell Asset Management); and certain Paratek stockholders (including Omega Funds, HBM Healthcare Investments and Aisling Capital) will invest around $93 million in the combined organization.

Glenn Oclassen, chief executive and chairman of the Transcept Board, said: “Following Transcept's recent June 3, 2014 special cash dividend of approximately $25.4 million, this transaction with Paratek reflects the continued commitment of Transcept's Board of Directors and management team to deliver value to Transcept's stockholders. Under the proposed transaction, Transcept's stockholders will maintain a meaningful equity ownership stake in Transcept, which will refocus its operations as a late-stage therapeutics company with product candidates we believe possess significant commercial potential. 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.”