GERMANTOWN, Md.
and CARLSBAD, Calif., Dec. 17,
2020 /PRNewswire/ -- Seneca Biopharma,
Inc. (Nasdaq: SNCA) ("Seneca"), and Leading BioSciences, Inc.
("LBS"), a privately held company focused on developing novel
therapeutics to improve human health through therapeutic protection
of the gastrointestinal ("GI") mucosal barrier, announced today
that they have entered into a definitive agreement under which a
wholly owned subsidiary of Seneca
will merge with LBS in an all-stock transaction. The combined
company will focus on advancing LBS's lead pipeline asset, LB1148,
in clinical studies to evaluate its potential to improve
restoration of normal GI function following major surgery and
reduce certain postoperative complications such as abdominal
adhesions. Upon completion of the merger, the company is expected
to operate under the name Palisade Bio, Inc. and trade on the
Nasdaq Capital Market under the ticker symbol PALI.
Altium Capital has agreed to invest $22.5 million at the
close of the merger, subject to customary conditions. The private
placement financing will help fund continued development of the
combined company's clinical programs, including LB1148, and is
expected to close immediately prior to the completion of the
merger.
LB1148 is a Phase 3-ready, patent-protected, oral formulation of
a broad-spectrum serine protease inhibitor designed to neutralize
the activity of potent digestive proteases that are released from
the gut during surgery, which in turn contribute to the temporary
loss of normal gastrointestinal function and formation of
postoperative adhesions. By inhibiting the activity of these
digestive proteases, LB1148 has the potential to prevent damage to
GI tissues, accelerate the time to return of normal GI function,
and shorten the duration of costly post-surgery hospital stays.
"This is a transformational event for Leading BioSciences, and a
critical next step in the evolution of the Company. Through this
merger, the newly formed Palisade Bio will be optimally positioned
to advance our lead drug candidate LB1148 through the final phases
of clinical development for FDA approval," said Tom M. Hallam,
Ph.D., chief executive officer of LBS. "We are excited to commence
pivotal studies with LB1148 in our first indication to reduce the
time to return to normal postoperative GI function following
neonatal open-heart surgery. This oral therapeutic has the
potential to be transformative for improving outcomes in multiple
surgery indications."
Kenneth C. Carter, Ph.D.,
executive chairman of Seneca,
remarked, "Following an extensive review of strategic alternatives,
we believe that this merger with Leading BioSciences is in the best
interest of Seneca's stockholders,
and has the potential to deliver both near- and long-term value to
the stockholders. The strength and dedication of the Leading
BioSciences leadership team, combined with their highly
differentiated pipeline assets and enthusiastic support from
leading clinicians, provides a compelling foundation for future
success for all stakeholders, and they have our full support."
About the Proposed Transaction
The merger is
structured as a stock-for-stock transaction whereby all of LBS's
outstanding shares of capital stock and securities exercisable for
LBS's common stock will be exchanged for Seneca common stock and securities exercisable
for Seneca common stock. On a pro
forma basis and based upon the number of shares of Seneca common
stock to be issued or issuable in the merger, it is anticipated
that Seneca equity holders
immediately following the merger will own approximately 26.2% of
the combined company and LBS equity holders (inclusive of investors
in the financing) immediately following the merger will own
approximately 73.8% of the combined company on a fully diluted
basis using an adjusted treasury stock method.
Shareholders of Seneca will
also receive one contingent value right ("CVR") for each share of
Seneca common stock (including any
warrants exercisable for shares of Seneca common stock) as a
dividend. This will entitle the holder to receive, in certain
circumstances, a certain percentage the net proceeds, if any,
derived from the sale or license of the intellectual property of
Seneca. Full details of the
CVR agreement will be contained in Seneca's S-4 to be filed with the
SEC.
Final share exchange allocations will be subject to adjustment
based on Seneca's net cash balance
at the time of closing. The transaction has been approved by the
board of directors of both companies. The merger is expected to
close in the first half of 2021 subject to the approval of
Seneca stockholders at a special
stockholder meeting, the approval of LBS stockholders, the closing
of the financing, as well as other customary conditions.
Solebury Trout LLC is acting as financial advisor to
Seneca for the transaction and
Silvestre Law Group, P.C. is serving as legal counsel to
Seneca. Evolution Venture Partners is acting as financial
advisor to LBS, and Cooley LLP is serving as legal counsel to
LBS.
Management and Organization
The combined company will
be led by Thomas M. Hallam, Ph.D., LBS' chief executive
officer, and will be headquartered in Carlsbad, California. The board of directors is expected
to be composed of eight members, consisting of three from
Seneca and five from LBS.
Conference Call
Seneca and LBS will host a
conference call at 8:30 a.m. ET on Thursday December 17,
2020, to discuss the proposed transaction. The conference call may
be accessed by dialing 877-407-9208 for U.S. callers and
201-493-6784 for international callers at least five minutes prior
to the start of the call and providing the conference ID 13714302.
Additionally, the live, listen-only webcast of the conference call
can be accessed by visiting the investors section of the
Seneca website
at www.senecabio.com. A replay of the webcast can be accessed
at the same location beginning two hours following completion of
the call and will be available for seven days.
About Seneca Biopharma, Inc.
Seneca is a clinical-stage biopharmaceutical
company previously developing novel treatments for diseases of high
unmet medical need. Seneca is in
the process of transforming the organization through the
acquisition or in-licensing of new science and technologies, to
develop with the goal of providing meaningful therapies for
patients.
About Leading BioSciences, Inc.
LBS is developing
novel therapeutics designed to improve human health through
therapeutic protection of the gastrointestinal mucosal barrier.
LBS' initial focus is combatting the interruption of GI function
(ileus) following major surgery in order to reduce recovery times
and shorten the duration of patient hospital stays. Additionally,
LBS believes that its investigational therapies have the potential
to prevent the formation of postoperative adhesions (reducing
hospital re-admissions and additional surgeries), as well as to
address the myriad health conditions and complications associated
with chronic disruption of the gastrointestinal mucosal
barrier.
No Offer or Solicitation:
This communication
will not constitute an offer to sell or the solicitation of an
offer to sell or the solicitation of an offer to buy any
securities, nor will there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
in connection with the proposed merger shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Important Additional Information Will be Filed with the
SEC
In connection with the proposed transactions between
LBS and Seneca, Seneca will file a registration statement on
Form S-4 that will contain a proxy statement and prospectus with
the Securities Exchange Commission, or the SEC. This communication
is not a substitute for the registration statement or the proxy
statement or any other documents that Seneca may file with the SEC or send to its
stockholders in connection with the proposed transactions. BEFORE
MAKING ANY VOTING DECISION, SENECA
URGES INVESTORS AND STOCKHOLDERS TO READ THESE MATERIALS CAREFULLY
AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SENECA, THE PROPOSED TRANSACTION AND RELATED
MATTERS.
You may obtain free copies of the registration statement, proxy
statement and all other documents filed or that will be filed with
the SEC regarding the proposed transaction at the website
maintained by the SEC at www.sec.gov. Once filed, the
Registration Statement will be available free of charge on
Seneca's website
at www.senecabio.com, by contacting Seneca's Investor Relations by phone at (301)
366-4960, or by electronic mail at
investor@senecabio.com. Investors and stockholders are urged
to read the registration statement, proxy statement, prospectus and
the other relevant materials when they become available before
making any voting or investment decision with respect to the
proposed transaction.
Participants in the Solicitation
Seneca and LBS, and each of their respective
directors and executive officers and certain of their other members
of management and employees, may be deemed to be participants in
the solicitation of proxies in connection with the proposed
transaction. Information about Seneca's directors and executive officers is
included in Seneca's Annual Report
on Form 10-K for the year ended December 31, 2019, filed
with the SEC on March 27, 2020, and the proxy statement for
Seneca's 2020 annual meeting of
stockholders, filed with the SEC on June 24, 2020. Additional
information regarding these persons and their interests in the
transaction will be included in the proxy statement relating to the
transaction when it is filed with the SEC. These documents can be
obtained free of charge from the sources indicated above.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains
"forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without
limitation, statements related to the anticipated consummation of
the proposed transactions, and other statements that are not
historical facts. Any statements contained in this
communication that are not statements of historical fact may be
deemed to be forward-looking statements. Forward-looking statements
may be identified by the use of words referencing future events or
circumstances such as "expect," "intend," "plan," "anticipate,"
"believe," "will," and similar expressions and their
variants. These forward-looking statements are based upon
Seneca's current expectations.
Forward-looking statements involve risks and uncertainties.
Seneca's actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks relating to
the completion of the merger, including the need for stockholder
approval and the satisfaction of closing conditions; the
anticipated financing to be completed immediately prior the closing
of the merger; the cash balances of the combined company following
the closing of the merger and the financing; the ability of
Seneca to remain listed on The
Nasdaq Stock Market, LLC; and expected restructuring-related cash
outlays, including the timing and amount of those outlays. Risks
and uncertainties related to LBS that may cause actual results to
differ materially from those expressed or implied in any
forward-looking statement include, but are not limited to: LBS's
plans to develop and commercialize its product candidates,
including LB1148; the timing of initiation of LBS's planned
clinical trials; the timing of the availability of data from LBS's
clinical trials; the timing of any planned investigational new drug
application or new drug application; LBS's plans to research,
develop and commercialize its current and future product
candidates; LBS's ability to enter into new collaborations, and to
fulfill its obligations under any such collaboration agreements;
the clinical utility, potential benefits and market acceptance of
LBS's product candidates; LBS's commercialization, marketing and
manufacturing capabilities and strategy; LBS's ability to identify
additional products or product candidates with significant
commercial potential; developments and projections relating to
LBS's competitors and its industry; the impact of government laws
and regulations; LBS's ability to protect its intellectual property
position; and LBS's estimates regarding future revenue, expenses,
capital requirements and need for additional financing following
the proposed transaction. The risks and uncertainties may be
amplified by the COVID-19 pandemic, which has caused significant
economic uncertainty. The extent to which the COVID-19 pandemic
impacts Seneca's business,
operations, and financial results, including the duration and
magnitude of such effects, will depend on numerous factors, which
are unpredictable, including, but not limited to, the duration and
spread of the outbreak, its severity, the actions to contain the
virus or treat its impact, and how quickly and to what extent
normal economic and operating conditions can resume.
There can be no assurance that Seneca will be able to complete the proposed
transactions on the anticipated terms, or at all. Additional risks
and uncertainties relating to Seneca and its business can be found under the
caption "Risk Factors" and elsewhere in Seneca's filings and reports with the SEC,
including in Seneca's Quarterly
Report on Form 10-Q, filed with the SEC on November 11, 2020.
Except as required by law, Seneca
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in Seneca's expectations with regard thereto or
any change in events, conditions or circumstances on which any such
statements are based.
Related Links
www.senecabio.com
www.leadingbiosciences.com
Conference Call Information:
December 17, 2020 at 8:30
a.m. ET
877-407-9208 Investors Dial
201-493-6784 International Investors Dial
13714302 Conference ID
Live Event Call me™ Link for participant entry:
https://callme.viavid.com/?callme=true&passcode=13714302&h=true&info=company-email&r=true&B=6
• Participants can use Guest dial-in #s above and be answered
by an operator OR click the Call me™ link for instant telephone
access to the event
• Call me™ link will be made active 15 minutes prior to
scheduled start time
Webcast: http://public.viavid.com/index.php?id=142769
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SOURCE Seneca Biopharma, Inc.