Lpath, Inc. (NASDAQ:LPTN) and Apollo Endosurgery, Inc. today announced that they have entered into a definitive merger agreement under which the security holders of Apollo would become the majority owners ofLpath. Under terms of the agreement, Lpath will issue new shares of its common stock or rights to acquire its common stock to Apollo security holders. The Apollo security holders are expected to own approximately 95.8 percent of the combined company and the Lpath security holders are expected to own approximately 4.2 percent of the combined company, subject to adjustments as described in the merger agreement.
Concurrent with the closing of the merger, Apollo’s major investors have committed to invest approximately $29 million of new equity in the combined company, which will form part of the Apollo 95.8 percent ownership. The major investors include affiliates of PTV Healthcare Capital,H.I.G. BioHealth Partners, Remeditex Ventures, Novo A/S, and CPMG Inc. As of June 30, 2016Apollo’s cash was approximately $11.6 million and long term debt was approximately $50 million. Apollo’s consolidated revenue for the calendar year ended December 31, 2015 was approximately $68 million.
The boards of directors of both Lpath and Apollo have unanimously approved the transaction, which is subject to customary closing conditions, including approval by the stockholders of each of Lpath and Apollo. The merger agreement contains certain termination rights for both Lpathand Apollo.
The transaction is expected to close during the fourth quarter of 2016. Upon closing of the transaction Lpath will be renamed Apollo Endosurgery, Inc. and the combined company intends to apply for listing on The NASDAQ Global Market under a new trading symbol.
Todd Newton, chief executive officer of Apollo, said, “Executing this transaction with Lpath is an expedient way to introduce our company to the public market. With the additional equity support we will receive from Apollo’s major investors as part of this transaction, we will have the resources to meet our near-term business needs.”
Gary Atkinson, Lpath’s chief executive officer added, “Following an extensive and thorough review of strategic alternatives, we have chosen to merge with Apollo because we believe the transaction provides Lpath stockholders with an attractive opportunity for value appreciation.” (Original Source)
Shares of Lpath jumped nearly 44% to $3.55 in after-hours trading Thursday. LPTN has a 1-year high of $5.88 and a 1-year low of $1.68. The stock’s 50-day moving average is $2.22 and its 200-day moving average is $2.51.
Lpath, Inc. operates as a biotechnology company, which focuses on the discovery and development of lipidomic-based therapeutic antibodies, an emerging field of medical science that targets bioactive signaling lipids to treat a wide range of human diseases. It develops three drug candidates, each of them into clinical trials, and built evidence to support their approach of targeting bioactive lipids to treat a wide range of diseases.