Another Bio Bites the Dust

Celladon, run by Sangamo director, Paul Cleveland.
PALO ALTO, Calif. and SAN DIEGO, Nov. 18, 2015 (GLOBE NEWSWIRE) -- Celladon Corporation (Nasdaq:CLDN) and Eiger BioPharmaceuticals, Inc., a privately-held biopharmaceutical company, today announced that they have entered into a definitive merger agreement under which the stockholders of Eiger would become the majority owners of Celladon, and the operations of Celladon and Eiger would be combined. The proposed merger remains subject to certain conditions, including the approval of Celladon stockholders.  If approved, upon closing of the transaction, Celladon will be renamed Eiger BioPharmaceuticals, Inc.
An investor syndicate has committed to invest $39.5 million in the combined company including new investors HBM Healthcare Investments, RA Capital Management, Sabby Management, Sphera Global Healthcare, Perceptive Advisors and Monashee Capital Partners together with existing long-time Eiger stockholders, ViVo Capital and InterWest Partners.  Six million dollars of the financing has already been funded, and the remaining $33.5 million is expected to close contemporaneously with the completion of the proposed merger.  The total cash balance of the combined company upon the closing of the proposed merger and the financing is expected to be greater than $60 million.
The proposed merger will create a clinical-stage company with a diversified development portfolio of product candidates addressing novel targets for four distinct orphan diseases: Hepatitis Delta Virus, bariatric surgery-induced hyperinsulinemic hypoglycemia, pulmonary arterial hypertension, and lymphedema.
"The proposed merger and concurrent financing are expected to be sufficient to allow the combined company to obtain Phase 2 clinical trial results from at least two of the four planned development programs by late 2016," said David Cory, President and Chief Executive Officer of Eiger.  "We have a dedicated, experienced management team in place and executing on these four novel programs, all of which address potentially significant markets with unmet medical needs."
Paul Cleveland, Celladon's departing President and Chief Executive Officer added, "Following an extensive review of strategic alternatives and a thorough process, we have chosen to combine with Eiger because we believe the proposed merger provides Celladon shareholders with an attractive opportunity for value appreciation. I'm also pleased that Mr.Wiklund will assume the President and Chief Executive role at Celladon."
About the Proposed Merger
Existing Eiger stockholders as well as investors in the contemporaneous financing will receive newly issued shares of Celladon common stock in connection with the proposed merger.  Celladon is expected to issue approximately 85.0 million new shares of its common stock to Eiger stockholders and participants in the financing.  On a pro forma basis for the combined company, current Celladon shareholders are expected to own approximately 22%, current Eiger shareholders approximately 45% and the new Eiger investor syndicate approximately 33%, each on a fully-diluted basis.
The transaction has been unanimously approved by the boards of directors of both companies, and a majority of Eiger stockholders have agreed to vote in favor of the transaction. The proposed merger is expected to close in the first half of 2016, subject to the approval of the stockholders of each company as well as regulatory approval and other customary conditions.  The merger agreement contains further details with respect to the proposed merger.
Celladon's exclusive financial advisor in the transaction is Wedbush PacGrow Healthcare.  Jefferies LLC is acting as lead financial advisor to Eiger and Piper Jaffray is acting as financial advisor.  Pillsbury Winthrop Shaw Pittman LLP served as legal counsel to Celladon and Cooley LLP served as legal counsel to Eiger.
Management and Organization
The directors and executive officers of Celladon will resign from their positions with Celladon upon the closing of the proposed merger, and the combined company will be under the leadership of Eiger's current executive management team with David Cory serving as President and Chief Executive Officer. Following the closing of the proposed merger, the Board of Directors of the combined company is expected to consist of seven members all of whom will be designated by Eiger.  The corporate headquarters will be located in the San Francisco Bay Area.
Celladon CEO Transition
Celladon also announced that, as part of a further reduction in force implemented in connection with the signing of the merger agreement, Paul Cleveland, President and Chief Executive Officer, is leaving the company effective November 19, 2015 to pursue other industry opportunities. Fredrik Wiklund, Celladon's Vice President of Corporate Development and Investor Relations has been named Celladon's President and Chief Executive Officer effective the same date.