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Cyclerion Therapeutics Inc (NASDAQ:CYCN) has agreed to sell two of its assets - zagociguat (formerly CY6463) and CY3018, to a new private company ("NewCo") formed by certain current Cyclerion shareholders and new investors who have agreed to invest $81 million.
Cyclerion will receive $8 million as reimbursement for all expenses related to zagociguat and CY3018 between the signing and closing of the transaction and 10% equity ownership in NewCo.
Cyclerion will also have additional future equity purchase rights in NewCo.
Upon approval of the current transaction by Cyclerion shareholders, Peter Hecht will transition out of his Cyclerion CEO role and join NewCo as its CEO. Dr.
Hecht, a major Cyclerion shareholder, will continue to serve as a Cyclerion Director. Cyclerion has initiated a search to bring in a new leader.
In its Q1 earnings release, the company said it is also seeking a partnership for olinciguat, an oral, once-daily, peripheral sGC stimulator, as a potential treatment for cardiovascular diseases.
Cash, cash equivalents, and restricted cash balance on March 31, 2023, was approximately $7.2 million.
The signing of the agreement triggered the previously announced $5 million equity investment by CEO Peter Hecht.
Hecht will receive a mix of common stock and nonvoting convertible preferred stock of Cyclerion at a minimum purchase price of $0.434 per share.
The proceeds from this investment and the $8 million upfront from the sale of assets are expected to support ongoing operations for at least 12 months post-closing the transaction.
Price Action: CYCN shares are down 16.10% at $0.25 on the last check Friday.
Posted In: CYCN
