Novacea, Inc.and Transcept Pharmaceuticals, Inc., a privately-held specialty pharmaceutical company, announced that they have entered into a definitive merger agreement under which Novacea will merge with Transcept in an all-stock transaction.
Under the terms of the merger agreement, Novacea will issue new shares of its common stock to Transcept stockholders based on an exchange ratio to be determined prior to the closing of the transaction. Under the exchange ratio formula defined in the merger agreement, the former Transcept stockholders are expected to own 60 percent of the combined company, and the former Novacea stockholders are expected to own 40 percent of the combined company, each on a fully-diluted basis. This ratio is subject to potential adjustments as described in the merger agreement.
The boards of directors of both Novacea and Transcept have approved the proposed transaction, which is subject to customary closing conditions, including approval by the stockholders of Novacea and Transcept. Novacea stockholders holding approximately 35% of its outstanding common stock have agreed to vote in favor of the transaction, and Transcept stockholders holding approximately 80% of Transcept capital stock have also agreed to vote in favor of the transaction. Subject to regulatory approvals and customary closing conditions, the transaction is currently expected to close during the fourth quarter of 2008 or the first quarter of 2009. If the merger is consummated, the Novacea name will be changed to Transcept Pharmaceuticals, Inc. and the combined company intends to apply to change its ticker symbol on The NASDAQ Global Market®. Novacea was advised in the transaction by Cowen and Company and Transcept was advised by Merrill Lynch & Co.
Transcept Pharmaceuticals is a specialty pharmaceutical company developing new patient benefits from novel applications of existing prescription sleep medicine and psychiatry drugs. The lead Transcept product candidate is Intermezzo® (zolpidem tartrate sublingual lozenge), a uniquely delivered low dose formulation of zolpidem developed for the as-needed (prn) treatment of insomnia when patients awaken in the middle of the night (MOTN) and have difficulty returning to sleep. Intermezzo® has demonstrated positive results in two completed Phase 3 pivotal clinical trials and Transcept plans to submit a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) via the 505(b)(2) regulatory pathway prior to the end of 2008.