Neothetics Inc (NASDAQ:NEOT)
Neothetics Inc (NASDAQ:NEOT) shares jumped after they announced entering into a merger agreement with Evofem Biosciences. Evofem, a privately held company, will merge with a wholly-owned subsidiary of Neothetics in an all-stock transaction. Neothetics will become Evofem Biosciences, Inc., and Evofem Biosciences’ Chief Executive Officer, Saundra Pelletier, will assume its leadership. Additionally, as part of the deal, Invesco Asset Management Ltd., will purchase $20 million of Evofem Biosciences’ common stock after the deal is closed.
Saundra Pelletier, Chief Executive Officer of Evofem Biosciences stated in a press release “This merger and concurrent financing provides continued funding for Evofem Biosciences’ ongoing Phase III study of Amphora® as a vaginal contraceptive – AMPOWER. We expect to close the study database and file for FDA review in the second quarter of 2019. In addition, we have expanded our Amphora® clinical development platform with potential supplemental indications which would further strengthen its position as a cornerstone therapy in hormone-free birth control and as a preventative option for certain sexually transmitted infections.”
NEOT Stock Action
The exchange ratio, prior to the Invesco purchase of shares, is being determined by$171,400,000 Neothetics common stock being issued to the Evofem Biosciences stockholders. $28,600,000 of common stock will be retained by the Neothetics stockholders. Neothetics stockholders will own approximately 13% of the combined company and Evofem Biosciences stockholders will own approximately 87%.
Shares of Neothetics Inc (NASDAQ:NEOT) closed Monday at $0.52 and opened this morning at $0.84 before hitting a high of $1.99. By the end of the day NEOT stock closed at $1.72 on volume over 70 times the average.
Neothetics Inc (NASDAQ:NEOT) has no sales reported over the last four years. Earnings have been negative. On a per share basis, NEOT shareholders lost (-$0.94) last year. However, that was the smallest loss in the past three years for the company.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.