FRAMINGHAM, Mass. and SAN DIEGO, Calif. - Pulmatrix, Inc. (NASDAQ:PULM), a clinical-stage biopharmaceutical company, today announced a definitive merger agreement with Cullgen Inc., a privately-held biopharmaceutical firm. The combined entity will focus on advancing protein degradation technology with three degrader programs soon entering Phase 1 clinical trials, targeting cancer treatment and pain management.
Upon completion, expected by the end of March 2025, Cullgen stockholders will own approximately 96.4% of the merged company, which will operate under the Cullgen name and continue trading on the Nasdaq Capital Market. Pulmatrix stockholders are set to own the remaining 3.6% and may receive a special cash dividend, contingent on Pulmatrix's net cash position at closing.
Cullgen's CEO, Ying Luo, Ph.D., expressed enthusiasm for the merger's potential to further their pipeline of targeted protein degraders. Pulmatrix's Interim CEO, Peter Ludlum, also sees the merger as beneficial, providing value to Pulmatrix stockholders and advancing research and development.
The merger follows Cullgen's Series C financing in 2023, led by AstraZeneca-CICC Venture Capital Partnership, and a strategic partnership with Astellas Pharma Inc. (TYO:4503) Cullgen's pipeline includes a first-in-class oral pan-TRK degrader, CG001419, with clinical trials for solid tumors and pain management underway, and CG009301, a GSPT1 degrader for blood cancers, with patient enrollment expected to begin in early 2025.
Prior to the merger's completion, Pulmatrix plans to divest assets including its acute migraine candidate, PUR3100, and others based on its iSPERSE™ technology, aiming to maximize the special dividend for its stockholders.
An informational webcast about the proposed merger is scheduled for 12:00 pm ET today, accessible via Pulmatrix's and Cullgen's websites.
The merger is subject to standard closing conditions, including stockholder and regulatory approvals. Advisory roles are filled by Wedbush PacGrow and MTS Health Partners, L.P., with Gibson, Dunn & Crutcher LLP, DeHeng Law Office, and Haynes and Boone, LLP providing legal counsel.
This news is based on a press release statement.
In other recent news, Pulmatrix, Inc. has announced the scheduling of its 2024 Annual Meeting of Stockholders for December 18, 2024. The company has set a record date for stockholders entitled to vote at the meeting as close of business on October 31, 2024. This marks a shift from the 2023 Annual Meeting's anniversary date by more than 30 days. As a result, Pulmatrix has issued deadlines for stockholder proposals and nominations for directorship, which must be received by October 18, 2024. Stockholders wishing to submit proposals or nominate directors must meet the SEC's requirements and send their proposals to the company by the stated deadline. The definitive proxy statement, which will include the time and location of the 2024 Annual Meeting, will be filed with the SEC at a later date. These are among the recent developments concerning the pharmaceutical company.
InvestingPro Insights
As Pulmatrix (NASDAQ:PULM) prepares for its merger with Cullgen, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at a modest $7.49 million, reflecting its current position in the biopharmaceutical sector.
InvestingPro data reveals that Pulmatrix has experienced significant revenue growth, with a 47.05% increase in the last twelve months as of Q3 2024. This growth could be an attractive factor for Cullgen in the merger deal. However, it's important to note that the company's gross profit margin is negative at -55.1%, indicating challenges in profitability.
Two relevant InvestingPro Tips highlight Pulmatrix's financial situation:
1. The company holds more cash than debt on its balance sheet, which could contribute to the potential special cash dividend for Pulmatrix stockholders mentioned in the merger announcement.
2. Pulmatrix is quickly burning through cash, a common characteristic of clinical-stage biopharmaceutical companies investing heavily in research and development.
These insights provide context to the merger decision and Pulmatrix's strategy to divest certain assets before the deal closes. The merger with Cullgen appears to be a strategic move to leverage combined resources and expertise in the protein degradation field.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips that could provide further insights into Pulmatrix's financial health and market position.
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