Synta Pharma Announces Agreement To Merge With Madrigal Pharma

(RTTNews) - Synta Pharmaceuticals Corp. (SNTA) and private firm Madrigal Pharmaceuticals, Inc. Thursday announced a definitive merger agreement under which Madrigal will merge with a wholly-owned subsidiary of Synta in an all-stock transaction. The combined company will be known as Madrigal Pharmaceuticals, and Paul Friedman will become chairman and chief executive officer. The corporate headquarters will be located in the Philadelphia area.

As perthe merger agreement, Synta will acquire all outstanding shares of Madrigal in exchange for approximately 253.9 million newly issued shares of Synta common stock. Existing Synta shareholders will own 36 percent of the combined company at the closing and Madrigal shareholders will own 64 percent of the combined company. The new company will focus on the development of novel small-molecule drugs addressing major unmet needs in cardiovascular-metabolic diseases and non-alcoholic steatohepatitis.

The transaction has been approved by the boards of directors of both companies and the shareholders of Madrigal.

The deal will be closed by the end of the third quarter of 2016 The investor syndicate that includes Bay City Capital, Fred Craves, Founder of Bay City Capital, and SQN LLC, a corporation held by Friedman and Rebecca Taub has committed to invest up to $9 million in Madrigal prior to the closing of the Merger. The combined company intends to use these proceeds, in addition to Synta's cash balance at the closing of the merger, to fund the development of MGL-3196 through Phase 2 clinical studies in NASH, HeFH and HoFH. Madrigal's lead compound, MGL-3196, is a Phase 2-ready once-daily, oral, liver-directed selective thyroid hormone receptor-ß agonist for the treatment of NASH and heterozygous and homozygous familial hypercholesterolemia.

MTS Health Partners, L.P. and ROTH Capital Partners, LLC served as financial advisors, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as legal counsel to Synta and Stradling Yocca Carlson & Rauth, P.C. served as legal counsel to Madrigal with respect to the transaction.

After the signing of the agreement, Friedman has stepped down from Synta's Board of Directors and will join Madrigal as an executive. Taub will assume the newly created role of Chief Medical Officer, Executive Vice President, Research & Development, following the closing of the Merger.