Histogenics Corp (NASDAQ: HSGX) is having an incredible start to the trading session, trading with gains well over 100% in the pre-market. The gains follow an announcement that the company will merge with Ocugen, leaving Ocugen as the majority owners of HSGX outstanding common stock. Today, we’ll talk about:
- The merger;
- what we’re seeing from HSGX stock as a result; and
- what we’ll be watching for ahead.
HSGX Announces Merger
As mentioned above, Histogenics is having a great day in the market today after the company announced merger news. In a press release issued early this morning, the company said that it has entered into a definitive merger agreement with Ocugen.
According to the terms of the agreement, stockholders of Ocugen will become the majority owners of HSGX outstanding common stock upon the close of the merger. The company also said tha tthe merger will result in a combined publicly-traded, clinical-stage biopharmaceutical company operating under the Ocugen name.
In a statement, Shankar Musunuri, Ph.D., M.B.A., Chairman, CEO and Co-Founder at Ocugen, had the following to offer:
Since Ocugen’s founding, we have sought to develop innovative therapies to treat rare and underserved eye diseases through a combination of therapeutic approaches that utilize small molecules, biologics, and gene therapies.
We have developed a broad pipeline which includes OCU300, an orphan drug candidate for ocular graft versus host disease, and OCU310 for dry eye disease; our modifier gene therapy platform and OCU400, a gene augmentation therapy for patients with inherited retinal diseases caused by mutations in the NR2E3 gene, which recently received orphan drug designation from the FDA. We’ve also made pre-clinical progress toward our retinal disease programs which includes novel biologic therapies for wet- age-related macular degeneration, diabetic macular edema and diabetic retinopathy, as well as for retinitis pigmentosa.
The above statement was followed up by Adam Gridley, President at HSGX. Here’s what he had to say:
This transaction with Ocugen reflects the continued commitment of our management team and Board of Directors to deliver value to stockholders and make a difference in patients’ lives.
Following a thorough review of strategic alternatives for Histogenics and the NeoCart program, we have determined that a merger with Ocugen will enable Histogenics investors to participate in Ocugen’s broader pipeline of ocular disease and gene therapy opportunities, including several late-stage clinical candidates, and a robust preclinical platform. In addition, we plan to continue to evaluate opportunities to realize additional value from the discontinued NeoCart program over the coming weeks.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Histogenix, the news proved to be overwhelmingly positive.
After all, the merger adds substantial value to the proposition for shareholders. Moreover, HSGX investors will keep their hands in the combined company, with an approximate 10% ownership retention. So, it’s not surprising to see that excited investors are pushing the stock up.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:40), HSGX is trading at $0.30 per share after a gain of $0.19 per share or 167.09% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on HSGX. In particular, we’re interested in following this transaction as it’s not closed quite yet. Nonetheless, we’ll keep a close eye on the story and bring the news to you as it breaks!
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