PHILADELPHIA and NEW YORK, March 23,
2021 /PRNewswire/ -- Renovacor, Inc. ("Renovacor" or
the "Company"), an early-stage biotechnology company developing
AAV-based gene therapies for devastating cardiovascular and central
nervous system (CNS) diseases resulting from BAG3 gene
dysfunction, and Chardan Healthcare Acquisition 2 Corp. (NYSE:
CHAQ) ("CHAQ"), a special purpose acquisition company or SPAC,
sponsored by affiliates of Chardan Capital Markets ("Chardan"),
announced today they have entered into a definitive business
combination agreement. Upon closing of the transaction, CHAQ will
be renamed Renovacor, Inc. and its common stock is expected to be
listed on NYSE under the ticker symbol "RCOR" (the "Combined
Company").
The Combined Company is expected to receive gross proceeds of up
to $116 million, funded by
approximately $86 million held in
CHAQ's trust account (assuming no redemptions are effected) and a
common stock PIPE of $30 million at
$10.00 per share. A group of premier
investors has committed to participate in the transaction through a
common stock PIPE and sponsor support agreements, including Chardan
Healthcare Investments (an affiliate of Chardan), RTW Investments
LP, Surveyor Capital (a Citadel company), Affinity Asset Advisors,
Altium Capital, Ikarian Capital, Sio Capital Management, South
Ocean Capital Management, and certain existing Renovacor
stockholders including Acorn Bioventures, Longview Ventures (an
affiliate of Broadview Ventures) and Innogest Capital.
Proceeds from the business combination and PIPE is expected to
provide Renovacor with resources to advance its lead rare disease
gene therapy program into phase I/II clinical development and
establish a pipeline of preclinical research programs to be
progressed towards IND-enabling studies.
The Combined Company will be led by President and Chief
Executive Officer Magdalene Cook,
M.D. The boards of directors of both Renovacor and CHAQ have
unanimously approved the proposed transaction. Completion of the
transaction, which is expected in the second quarter of 2021, is
subject to approval of CHAQ's stockholders and the satisfaction or
waiver of certain other customary closing conditions.
Renovacor's lead program is an adeno-associated virus
(AAV)-based gene therapy targeting BAG3-associated dilated
cardiomyopathy ("BAG3 DCM"), a disease with high unmet medical need
and an average age of onset of 38 years and less than 50% survival
5 years after disease onset. Renovacor anticipates submitting an
IND for BAG3 DCM in mid-2022 and beginning the phase I/II clinical
trial shortly thereafter. The Company is concurrently advancing
other preclinical pipeline programs targeting additional
BAG3-associated diseases, initially focused on cardiovascular and
CNS therapeutic areas.
"Renovacor is focused on bringing one of the first genetically
driven precision medicines to cardiovascular disease, starting with
patients suffering from dilated cardiomyopathy due to BAG3
gene mutation," said Magdalene Cook,
M.D., CEO of Renovacor "We appreciate the strong support from new,
leading life science investors as well as certain of our existing
stockholders committed to the business combination and our mission
to deliver unique therapies with life-changing potential to
patients."
Jonas Grossman, President and
Chief Executive Officer of CHAQ, stated: "Our aim in creating CHAQ
was to partner with a novel and disruptive biotechnology company
that would meaningfully benefit from a public listing, putting the
capital to productive use through groundbreaking clinical work to
help patients in need, and whose assets and platform technology
could yield significant growth and robust long-term returns for our
stockholders. We firmly believe Renovacor meets all of our
selection criteria, and is led by an exceptional leadership
team."
Gbola Amusa, M.D., C.F.A,
Executive Chairman and Chief Science Officer of CHAQ, added, "We
believe that cardiovascular disease is the next disease area to
emerge for gene therapies. Given the strength of Renovacor's
science, which builds on more than a decade of foundational
research by the Company's founder, Arthur
M. Feldman, MD, PhD, we believe Renovacor is well-positioned
with a first-of-its-kind gene replacement for a devastating
cardiovascular disease." Dr. Feldman, a Laura H. Carnell Professor
of Medicine at the Lewis Katz School of Medicine at Temple University, noted that Renovacor's AAV-based
approach, if successful, has the potential to provide clinical
benefit to tens of thousands of BAG3 DCM subjects across
the United States and Europe.
"We are committed to Renovacor's future development and believe
the business combination, new investors and financing will position
Renovacor well to advance the BAG3 DCM program into phase I/II
clinical trial and build out the research and development pipeline
to explore other BAG3-associated cardiovascular and CNS
indications," said Thomas Needham of
Broadview Ventures and a member of the Renovacor Board of
Directors. Isaac Manke, Ph.D., of
Acorn Bioventures added: "We aim to support advanced therapeutics
companies that have the potential to provide single-administration
curative therapies in disease areas with few effective treatment
options. We believe Renovacor is founded on strong science that has
the potential to translate to clinical benefits in a number of
disease areas with meaningful market opportunities."
Chardan is acting as the M&A advisor and Placement Agent for
CHAQ. Latham & Watkins LLP is the legal counsel for CHAQ.
Troutman Pepper Hamilton Sanders LLP, and Morgan Lewis & Bockius LLP are the legal
counsels for Renovacor.
Summary of Transaction
CHAQ raised approximately $86
million in its IPO which is now held in a trust account.
Under the terms of the proposed transaction announced today, CHAQ
will issue 6.5 million shares to current securityholders of
Renovacor. Current Renovacor stockholders may also receive up to
2.0 million earn out shares ("Company Earn Out Shares"): 0.6
million shares if the share price exceeds $17.50 by the end of calendar year 2023, 0.6
million shares if the share price exceeds $25.00 by the end of calendar year 2025, and 0.8
million shares if the share price exceeds $35.00 by the end of calendar year 2027.
Furthermore, CHAQ's sponsor Chardan agreed to shift 0.5 million of
its founder shares to earn out shares ("Sponsor Earn Out Shares"),
subject to same terms as Company Earn Out Shares.
After giving effect to the investor transactions being
undertaken in order to meet the minimum cash condition and assuming
no redemptions from the trust account by CHAQ stockholders, current
securityholders of Renovacor are estimated to own approximately 42%
of the issued and outstanding securities in the Combined Company at
closing (excluding ownership of the Company Earn Out Shares and
Sponsor Earn Out Shares).
Post-closing, it is anticipated that Dr. Cook, Mr. Needham and
three individuals designated by the Renovacor board will join Mr.
Grossman and Dr. Amusa from CHAQ on the seven-person board of
directors of the Combined Company.
The description of the business combination contained herein is
only a summary and is qualified in its entirety by reference to the
definitive agreement relating to the business combination, a copy
of which will be filed by CHAQ with the Securities and Exchange
Commission ("SEC") as an exhibit to a Current Report on Form 8-K,
which can be accessed through the SEC's website at www.sec.gov.
About Renovacor
Renovacor is a preclinical stage gene therapy company developing
a pipeline of innovative and proprietary AAV-based gene therapies
for BAG3 gene mutation-associated diseases in areas of high unmet
medical need. Renovacor's therapeutic focus is initially on
cardiovascular disease, with a lead program in BAG3
mutation-associated dilated cardiomyopathy.
www.renovacorinc.com.
No portion of Renovacor's website is incorporated by reference
into or otherwise deemed to be a part of this press release.
About Chardan Healthcare Acquisition Corp.
CHAQ is a special purpose acquisition company formed for the
purpose of effecting a merger, acquisition, or similar business
combination. CHAQ raised approximately $86.0
million in April 2020 for the
purpose of combining with a public or privately-held operating
business. CHAQ was founded and sponsored by affiliates of Chardan
Capital Markets LLC. CHAQ is Chardan's sixth publicly traded
acquisition vehicle.
Additional Information and Where to Find It
This document relates to a proposed transaction between
Renovacor and CHAQ. This document does not constitute an offer to
sell or exchange, or the solicitation of an offer to buy or
exchange, any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. CHAQ intends to file a
proxy statement, which will be sent to all CHAQ and Renovacor
stockholders. CHAQ also will file other documents regarding the
proposed transaction with the SEC. BEFORE MAKING ANY VOTING
DECISION, INVESTORS AND SECURITY HOLDERS OF CHAQ AND RENOVACOR ARE
URGED TO READ THE PROXY STATEMENT, AS MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, AND ALL OTHER RELEVANT DOCUMENTS
FILED OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED TRANSACTION AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
THE PARTIES THERETO.
Investors and security holders will be able to obtain free
copies of the proxy statement and all other relevant documents
filed or that will be filed with the SEC by CHAQ through the
website maintained by the SEC at www.sec.gov. In addition, the
documents filed by CHAQ may be obtained free of charge from CHAQ's
website at https://www.chardanhealthcarespac.com/ or by written
request to CHAQ at Chardan Healthcare Acquisition 2 Corp., 17 State
Street, 21st Floor, New York, NY
10004.
Participants in Solicitation
CHAQ and Renovacor and their respective directors and officers
may be deemed to be participants in the solicitation of proxies
from CHAQ's stockholders in connection with the proposed
transaction. Information about CHAQ's directors and executive
officers and their ownership of CHAQ's securities is set forth in
CHAQ's filings with the SEC, including CHAQ's Annual Report on Form
10-K for the fiscal year ended December 31,
2020, which was filed with the SEC on March 4, 2021. To the extent that holdings of
CHAQ's securities have changed since the amounts printed in CHAQ's
Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC
on March 4, 2021, such changes have
been or will be reflected on Statements of Change in Ownership on
Form 4 filed with the SEC. Additional information regarding the
interests of those persons and other persons who may be deemed
participants in the proposed transaction may be obtained by reading
the proxy statement regarding the proposed transaction when it
becomes available. You may obtain free copies of these documents as
described in the above paragraph.
Forward-Looking Statements Legend
This document contains certain forward-looking statements within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation reform Act of 1995, as amended, with
respect to the proposed transaction between Renovacor and CHAQ,
including statements regarding the benefits of the transaction, the
anticipated timing of the transaction, Renovacor's products under
development and the markets in which it intends to operate, and
Renovacor's projected future results. These forward-looking
statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend,"
"strategy," "future," "opportunity," "plan," "may," "should,"
"will," "would," "will be," "will continue," "will likely result,"
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this document, including but not
limited to: (i) the risk that the transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of CHAQ's securities, (ii) the risk that the transaction may not be
completed by CHAQ's business combination deadline and the potential
failure to obtain an extension of the business combination deadline
if sought by CHAQ, (iii) the failure to satisfy the conditions to
the consummation of the transaction, including the adoption of the
agreement and plan of merger by the stockholders of CHAQ and
Renovacor, the satisfaction of the minimum trust account amount
following redemptions by CHAQ's public stockholders and the receipt
of certain governmental and regulatory approvals, (iv) the lack of
a third party valuation in determining whether or not to pursue the
proposed transaction, (v) the occurrence of any event, change or
other circumstance that could give rise to the termination of the
agreement and plan of merger, (vi) the effect of the announcement
or pendency of the transaction on Renovacor's business
relationships, performance, and business generally, (vii) risks
that the proposed transaction disrupts current plans of Renovacor
and potential difficulties in Renovacor employee retention as a
result of the proposed transaction, (viii) the outcome of any legal
proceedings that may be instituted against Renovacor or against
CHAQ related to the agreement and plan of merger or the proposed
transaction, (ix) the ability to maintain the listing of CHAQ's
securities on the New York Stock Exchange, (x) the price of CHAQ's
securities may be volatile due to a variety of factors, including
changes in the competitive and highly regulated industries in which
Renovacor plans to operate, variations in performance across
competitors, changes in laws and regulations affecting Renovacor's
business and changes in the combined capital structure, (xi) the
ability to implement business plans, forecasts, and other
expectations after the completion of the proposed transaction, and
identify and realize additional opportunities, (xii) the risk of
downturns in the highly competitive additive manufacturing
industry, (xiii) the impact of legislative, regulatory, competitive
and technological changes to Renovacor's business or product
candidates, (xiv) expectations for future studies and clinical
trials, the timing and potential outcomes of clinical studies and
interactions with regulatory authorities, and (xv) expectations
regarding BAG3 programs. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and
the other risks and uncertainties described in the "Risk Factors"
section of CHAQ's Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and proxy statement discussed above and other documents
filed by CHAQ from time to time with the SEC. These filings
identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from
those contained in the forward-looking statements. Forward-looking
statements speak only as of the date they are made. Readers are
cautioned not to put undue reliance on forward-looking statements,
and Renovacor and CHAQ assume no obligation and do not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise. Neither
Renovacor nor CHAQ gives any assurance that either Renovacor or
CHAQ will achieve its expectations.
Temple University Disclosure
Statement
Dr. Arthur Feldman is a founder
and director of Renovacor and holds equity interest in Renovacor.
Temple University has significant
financial interests in the technology licensed to Renovacor. The
financial interests are being managed in accordance with
Temple University's institutional
policy. Questions about Temple
University's policy can be directed
to coitemple@temple.edu.
CHAQ contact:
Jonas
Grossman
CEO
Chardan Healthcare Acquisition 2 Corp.
212-920-9000
jonas@chardanspac2.com
Renovacor contact:
Magdalene
Cook, MD
CEO
Renovacor
info@renovacorinc.com
Media contact:
Tom
Rozycki
Prosek Partners
646-818-9208
trozycki@prosek.com
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SOURCE Renovacor, Inc.