Chardan Healthcare Acquisition Corp. to Combine with BiomX Ltd.

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Chardan Healthcare Acquisition Corp. to Combine with BiomX Ltd.

Jul 16, 2019 INTEL by Kristi Marvin

Chardan Healthcare Acquisition Corp. (CHAC) announced this evening that it has entered into a business combination  agreement with BiomX Ltd. (“BiomX”). BiomX is a preclinical stage microbiome company developing both natural and engineered phage cocktails designed to target and destroy bacteria that affect the appearance of skin, as well as harmful bacteria in chronic diseases, such as IBD, PSC, and cancer. BiomX discovers and validates proprietary bacterial targets and customizes phage compositions against these targets.

The company’s pipeline includes preclinical candidates for acne-prone skin, inflammatory bowel disease (IBD), primary sclerosing cholangitis (PSC), and colorectal cancer (CRC). BiomX’s product for acne-prone skin is anticipated to begin clinical testing by the end of 2019. The combined company will continue to be led by BiomX’s experienced management team headed by Chief Executive Officer Jonathan Solomon.

CHAC has entered into a mix of commitments including purchase and sale, backstop, and voting agreements with BiomX and with investors — including OrbiMed, RTW Investment, Johnson & Johnson Innovation – JJDC, Inc. (JJDC), Takeda Ventures, Inc., Seventure Partners’ Health for Life Capital I, SBI Japan-Israel Innovation Fund, as well as RM Global Partners (RMGP) BioPharma Investment Fund — so that the $50 million minimum closing condition for the transaction has been satisfied prior to today’s announcement.

Post-closing, Mr. Solomon and three current BiomX directors will join Mr. Jonas Grossman and Dr. Gbola Amusa from CHAC, on the seven-person board of directors. An additional board member will be designated by BiomX.


Conference Call Scheduled 
CHAC will host a conference call to discuss the proposed business combination with the investment community on July 17, 2019 at 8:30 AM EDT.

(877) 705-6003 toll-free in the U.S.
(201) 493-6725 internationally

The conference ID number is 13692693.

The conference call webcast will be available at http://public.viavid.com/index.php?id=135425.


Quick takes: There’s not a lot to go on just yet since none of the agreements or presentation were filed as of this evening, just the press release was put forth. However, post-conference call and filings, we will update this post with some additional analysis.


TRANSACTION DETAILS

CHAC will issue 16.625 million shares and vested securities to current security holders of BiomX.

Earnout

BiomX shareholders will be entitled to receive earn-out consideration of an additional six million CHAC shares.

  • 2.0 million shares if the share price exceeds $16.50 by fiscal year 2021
  • 2.0 million shares if the share price exceeds $22.75 by fiscal year 2023
  • 2.0 million shares if the share price exceeds $29.00 by fiscal year 2025

 

Board Composition
  • Post-closing, BiomX CEO, Mr. Joseph Solomon, and three current BiomX directors will join Mr. Grossman and Dr. Amusa, from CHAC, on the seven-person board of directors. An additional board member will be designated by BiomX.

ADVISORS

  • Chardan is acting as CHAC’s M&A and capital markets advisor.
  • Cantor is acting as capital markets advisor to BiomX.
  • Loeb & Loeb LLP and Meitar Liquornik Geva Leshem Tal are representing CHAC.
  • Goodwin Procter LLP, Mayer Brown LLP and ZAG-S&W Zysman Aharoni Gayer & Co are representing BiomX.

 

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