Equillium Buys Inflammatory Bowel Disease Player In All-Stock Deal

Author: Vandana Singh | September 07, 2022 05:58am

• Equillium Inc (NASDAQ:EQ) has agreed to acquire Metacrine Inc (NASDAQ:MTCR) in an all-stock transaction. 
• The transaction is anticipated to add $33 million in cash to Equillium's balance sheet at closing, which is expected to extend the company's cash runway into 2024. 
• Earlier this year, Metacrine axed 50% of its workforce.
• Through the acquisition, Equillium adds Metacrine's farnesoid X receptor platform, including lead molecule MET642 for inflammatory bowel diseases.
• Equillium will be seeking a strategic partner with which to advance this program.
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• Equillium will issue stock valued at 25% over the net cash delivered at closing, estimated to be approximately $26 million.
• In addition, Equillium would assume Metacrine's existing loan with an outstanding principal balance of $15 million and potential access to an additional $10 million of committed debt capital. 
• Concurrently, Equillium will retire its debt facility with Oxford Finance LLC and SVB, with an outstanding principal balance of $10 million.
• Equillium is not planning to retain any current Metacrine employees and expects to assume minimal operating expenses. The deal is expected to close by the end of 2022.
• Price Action: EQ shares closed at $2.73, and MTCR shares are up 1.02% at $0.4748 during the premarket session on the last check Wednesday.

Posted In: EQ MTCR