NewLink to acquire Lumos Pharma, to change symbol to LUMO
NewLink Genetics and Lumos Pharma announced that the companies have entered into a definitive merger agreement. Under the terms of the agreement, NewLink will issue Lumos Pharma stockholders NewLink common stock in exchange for their shares in Lumos such that Lumos Pharma stockholders will own approximately 50% of NewLink. Immediately following the closing of the merger, Lumos Pharma will become a wholly-owned subsidiary of NewLink, and NewLink will be renamed "Lumos Pharma, Inc." and will trade on Nasdaq under the symbol "LUMO." The combined company is expected to have offices in Austin, TX and Ames, IA. The boards of directors of both companies have approved the transaction. Major stockholders of Lumos Pharma have also approved the transaction, and the largest stockholder of NewLink has signed a support agreement in favor of the merger transaction. The transaction is anticipated to close in the first quarter of 2020. The proposed merger would create a biopharmaceutical company focused initially on the development of Lumos Pharma's lead candidate, LUM-201, a potential oral therapy for pediatric growth hormone deficiency and other rare endocrine disorders. The merger would combine the Lumos management team's deep experience in rare diseases and endocrinology with NewLink's expertise in drug development and its solid financial position. This merger is expected to provide the financial support necessary to expedite the clinical development of LUM-201 for PGHD, for which the next step is the anticipated initiation of a Phase 2b clinical trial in mid-2020. The planned Phase 2b clinical trial will evaluate LUM-201 for children with PGHD compared to the current standard of care: daily injections of recombinant human growth hormone. Under the terms of the merger agreement, at the effective time of the merger, the outstanding shares of Lumos Pharma capital stock will be converted into the right to receive a number of newly issued shares of NewLink common stock at exchange ratios applicable to each series of capital stock. The conversion of all Lumos Pharma capital stock will result in former Lumos Pharma and NewLink stockholders each owning approximately 50% of the combined company's outstanding common stock. In conjunction with the transaction, the combined company plans to effect a reverse stock split. The transaction has been approved by the Boards of Directors of both companies and the majority of Lumos Pharma stockholders, which include Deerfield Management, a fund managed by Blackstone Life Sciences, Roche Venture Fund, New Enterprise Associates, and Sante Ventures. The largest stockholder of NewLink, Stine Seed Farm, Inc., has also pledged to support the agreement. The transaction is expected to close in the first quarter of 2020, subject to the satisfaction of customary closing conditions, including approval by the stockholders of NewLink Genetics.