SAN DIEGO and
TORRANCE, Calif.,
Feb. 19, 2020 /PRNewswire/
-- Tocagen Inc. (Nasdaq: TOCA), and Forte
Biosciences, Inc., a privately held clinical-stage
biopharmaceutical company developing a live biotherapeutic for the
treatment of inflammatory skin diseases, announced today that they
have entered into a definitive agreement under which Tocagen will
merge with Forte in an all-stock transaction. The merged company
will focus on advancing Forte's clinical program in inflammatory
skin diseases, including atopic dermatitis. Upon stockholder
approval, the combined company is expected to operate under the
name Forte Biosciences and trade on the Nasdaq Capital Market under
the ticker symbol FBRX.
![Tocagen Tocagen](https://mma.prnewswire.com/media/1092849/Tocagen.jpg)
An investor syndicate that includes Alger, BVF Partners LP and OrbiMed have
entered into a securities purchase agreement to invest $14 million in the combined company, subject to
customary conditions. The financing will help fund the further
development of the combined company's clinical programs, including
lead asset FB-401, and is expected to close immediately prior to
the completion of the merger. The total cash balance of the
combined company following the closing of the merger and financing
is expected to be approximately $25
million.
Forte's lead asset, FB-401, is a potentially
first-in-class, live biotherapeutic being developed as a topical
therapy for the treatment of inflammatory skin diseases, including
atopic dermatitis. In a Phase 1/2a trial in adults and pediatrics,
FB-401 demonstrated significant efficacy and a favorable safety and
tolerability profile. The full trial results will be submitted for
publication in a peer-reviewed journal in the first half of 2020. A
randomized Phase 2 trial is planned to commence in mid-2020 in
adults and pediatrics with atopic dermatitis, providing an expected
data readout in mid-2021.
"We are excited about the opportunities created by this
merger, as it positions us to become a global leader in
inflammatory skin diseases with the funding needed to advance our
pipeline towards regulatory approval and potential commercial
launch," said Paul Wagner, president
and chief executive officer of Forte. "Our team and advisors are
committed to providing new treatment options, particularly for
pediatrics with atopic dermatitis, for which few treatment options
exist, and we look forward to delivering on this as we advance
through development."
Marty J. Duvall, chief
executive officer of Tocagen, remarked, "Following an extensive
review of strategic alternatives, we believe that this merger with
Forte is in the best interest of Tocagen's stockholders and has the
potential to deliver immediate and long-term value to the
stockholders. The strength and dedication of the Forte leadership
team, combined with their highly differentiated technology platform
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 Forte's outstanding shares of common stock and securities
exercisable for Forte's common stock will be exchanged for Tocagen
common stock and securities exercisable for Tocagen common stock.
On a pro forma basis and based upon the number of shares of Tocagen
common stock to be issued or issuable in the merger, it is
anticipated that Tocagen equityholders immediately prior to the
merger will own approximately 25.5% of the combined company and
Forte equityholders (inclusive of investors in the financing)
immediately prior to the merger will own approximately 74.5% of the
combined company on a fully-diluted basis on a treasury stock
method basis. The actual allocation will be subject to adjustment
based on certain financial metrics, including Tocagen's net cash
balance at the time of closing and the amount that the concurrent
financing consummated by Forte before the closing of the merger
exceeds or is less than $14,000,000.
The transaction has been approved by the board of directors of both
companies. The merger is expected to close in the second quarter of
2020, subject to the approval of Tocagen stockholders at a special
stockholder meeting, the approval of Forte stockholders,
satisfaction of a Tocagen minimum cash condition, the closing of
the financing as well as other customary conditions.
Ladenburg Thalmann & Co. Inc. is acting as financial
advisor to Tocagen for the transaction and Cooley LLP is serving as
legal counsel to Tocagen. Wilson Sonsini
Goodrich & Rosati, P.C. is serving as legal counsel to
Forte.
Management and Organization
The
combined company will be led by Paul
Wagner, Ph.D., Forte's president and chief executive
officer, and will be headquartered in Torrance, California. The board of directors
is expected to be composed of eight members, with six members
designated by Forte, including current Forte board members
Lawrence F. Eichenfield, M.D. and
Dr. Wagner, and two members designated by Tocagen.
Conference Call
Tocagen and
Forte will host a conference call at 8:30 a.m. ET on
February 20, 2020, to discuss the
proposed transaction. The conference call may be accessed by
dialing (866) 220-5828 for U.S. callers and (615) 622-8065 for
international callers at least five minutes prior to the start of
the call and providing the passcode 6576031. Additionally, the
live, listen-only webcast of the conference call can be accessed by
visiting the investors section of the Tocagen website
at www.Tocagen.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 Tocagen
Inc.
Tocagen is a clinical-stage,
cancer-selective gene therapy company developing first-in-class,
broadly applicable product candidates designed to activate a
patient's immune system against their own cancer. For more
information about Tocagen, visit
www.tocagen.com.
About Forte Biosciences, Inc.
Forte
Biosciences, Inc. is a clinical stage, dermatology company
developing a live biotherapeutic, FB-401, for the treatment of
inflammatory skin diseases, particularly for pediatric atopic
dermatitis patients for which there is currently a significant
unmet need for safe and effective therapies. FB-401 has
completed Phase 1/2a testing in adult and pediatric (3 years of age
and older) patients with atopic dermatitis. There is a
significant unmet need for safe and effective therapies for
pediatric atopic dermatitis patients. Forte plans to advance
FB-401 into a randomized Phase 2 clinical trial by mid-2020.
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 Forte and Tocagen, Tocagen 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 Tocagen may file with the SEC or send to its
stockholders in connection with the proposed transactions. BEFORE
MAKING ANY VOTING DECISION, TOCAGEN URGES INVESTORS AND
STOCKHOLDERS TO READ THESE MATERIALS CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT TOCAGEN, 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 Tocagen's website
at https://tocagen.com, by contacting Tocagen's
Investor Contact, Mark Foletta, by
phone at (858) 412-8400, or by electronic mail at
mfoletta@tocagen.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
Tocagen and Forte, 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 Tocagen's directors and
executive officers is included in Tocagen's Annual Report on
Form 10-K for the year ended December 31, 2018, filed
with the SEC on February 27, 2019,
and the proxy statement for Tocagen's 2018 annual meeting of
stockholders, filed with the SEC on April
19, 2019. 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
Tocagen's current expectations. Forward-looking statements involve
risks and uncertainties. Tocagen'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 Tocagen
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 Forte that may
cause actual results to differ materially from those expressed or
implied in any forward-looking statement include, but are not
limited to: Forte's plans to develop and commercialize its product
candidates, including FB-401; the timing of initiation of Forte's
planned clinical trials; the timing of the availability of data
from Forte's clinical trials; the timing of any planned
investigational new drug application or new drug application;
Forte's plans to research, develop and commercialize its current
and future product candidates; Forte'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 Forte's product candidates; Forte's
commercialization, marketing and manufacturing capabilities and
strategy; Forte's ability to identify additional products or
product candidates with significant commercial potential;
developments and projections relating to Forte's competitors and
its industry; the impact of government laws and regulations;
Forte's ability to protect its intellectual property position; and
Forte's estimates regarding future revenue, expenses, capital
requirements and need for additional financing following the
proposed transaction.
There can be no assurance that Tocagen will be able to
complete the proposed transactions on the anticipated terms, or at
all. Additional risks and uncertainties relating to Tocagen and its
business can be found under the caption "Risk Factors" and
elsewhere in Tocagen's filings and reports with the SEC, including
in Tocagen's Quarterly Report on Form 10-Q, filed with the SEC on
November 12, 2019. Tocagen 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 Tocagen's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based.
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SOURCE Tocagen Inc.; Forte Biosciences, Inc.