Biodel Inc (NASDAQ: BIOD)
Biodel is having an incredibly strong start to the trading session today, after making a key announcement early this morning. The company will be merging with a privately-held company. Today, we’ll talk about the merger, how the market is reacting to the news, and what we can expect to see from BIOD moving forward. So, let’s get right to it…
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BIOD Enters Into Merger Agreement
As mentioned above, Biodel is having a strong start to trading today after announcing that it would be merging with another company. The other company involved in the merger is Albireo, a privately-held biotechnology company. The merger will result in a combined company that will be publicly traded. The new company will have the key focus of developing novel bile acid modulators. It is the hope of both companies that this will help to treat orphan pediatric liver diseases, as well as other liver and gastrointestinal diseases and disorders.
One of the first treatments that the combined company will be working on will be the lead candidate at Albireo. BIOD will be involved in progression of the lead candidate, A4250. Initially, the treatment was developed to treat Familial Intrahepatic Cholestasis, also know as PFIC. PFIC is a life threatening, orphan liver disease that is known to affect young children. Currently, the treatment is in the midst of Phase 2 studies.
Under the terms of the merger agreement, Albireo shareholders have already agreed to exchange their shares for newly-issued shares of BIOD common stock. At the end of the merger, Albireo stockholders will be the majority holders of the combined company with 67%, while Biodel stockholders will own approximately 33% of the combined company. The newly formed company will have the name Albireo Pharma, Inc. There are also plans to change the ticker on the stock from BIOD to ALBO. Ron Cooper, the current President and CEO at Albireo, will maintain the role of the CEO of the new, combined company. Here’s what he had to say in a statement:
“This transaction with Biodel and concurrent financing is expected to provide Albireo with sufficient captial to advance our lead product candidate, A4250, through an important Phase 2 clinical readout later this year and a subsequent pivotal trial in PFIC… We believe A4250 has potential to greatly benefit patients suffering from a devastating orphan pediatric liver disease with no approved drug treatment options.”
How The Market Reacted To The News
We know that positive news causes positive movements in the market. The news released by BIOD today was overwhelmingly positive. Not to mention, there are few pieces of news that can get investors quite as excited as a merger. So naturally, we’re seeing strong gains in the value of the stock today. Currently (11:46), BIOD is trading at $0.44 per share after a gain of $0.06 per share, or 14.74%, thus far today.
What We Can Expect To See Moving forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Biodel – or the newly formed Albireo Pharma. All in all, the companies fit incredibly well together. With combined financing, the newly formed company will have all the capital it needs to continue the advancement of A4250, which is overwhelmingly promising. All in all, things seem to be looking great.
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What Do You Think?
Where do you think BIOD is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of The Blue Diamond Gallery]