Key Takeaways
- Xoma Royalty and Lava Therapeutics have reduced their cash offer for the acquisition from $1.16-$1.24 to $1.04 per share.
- Shareholders will retain rights to non-transferable contingent value rights (CVR), potentially adding up to 23 cents per share based on specific liabilities.
- The deal’s cash requirement has been lowered from $31.5 million to $24.5 million, with the closing date extended to November 12.
Xoma Royalty and Lava Therapeutics are adjusting the terms of their acquisition agreement originally signed in August, reflecting challenges faced by Lava following setbacks in their clinical trials and company restructuring. According to a release from October 17, shareholders now stand to receive $1.04 per share in cash as opposed to the earlier offer range of $1.16 to $1.24.
Importantly, Lava’s shareholders will still have access to non-transferable contingent value rights (CVR), which entitle them to 75% of the net proceeds from the sale of the company’s partnered assets and any potential sales from unpartnered programs, adding a further 23 cents per share depending on future liabilities.
Furthermore, the companies have revised the minimum net cash requirement that Lava must have at the time of closing the deal. This requirement has been reduced from $31.5 million to $24.5 million, making it easier to fulfill the conditions necessary for the acquisition to proceed.
The deadline for completing the transaction, which was initially set for October 17, has been extended to November 12, with the expectation that the acquisition will close before the end of the year.
This acquisition comes during a turbulent period for Lava. The biotech company recently experienced a significant setback when their bispecific gamma delta T-cell engager, LAVA-1207, failed to demonstrate effectiveness in a Phase 1 prostate cancer study at the end of 2024. As a result, Lava has undertaken substantial restructuring, including a workforce reduction of 30% and the closure of operations in the Netherlands.
Despite these challenges, Lava retains valuable partnerships, including programs targeting CD33 with Johnson & Johnson and a bispecific gamma delta T cell receptor therapy partnered with Pfizer. These assets are pivotal as the company aims to rebound from recent setbacks and navigate the revised acquisition landscape.
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