Transcept Merging with Novacea

Transcept Pharmaceuticals Inc., a Point Richmond, Calif.-based CNS drug company, has agreed to go public via a reverse merger with Novacea Inc. (Nasdaq: NOVC). Following the transaction, Transcept shareholders would hold a 60% stake in the combined company, while Novacea shareholders would hold the remaining 40 percent.

 

Transcept has raised around $70 million in VC funding since 2003, including a $40 million Series D round last year. New Enterprise Associates led the round, and was joined by New Leaf Venture Partners, Montreux Equity Partners, InterWest Partners, Hamilton BioVentures, Vivo Ventures and Peninsula Equity Partners.

 

PRESS RELEASE

Novacea, Inc. (NASDAQ: NOVC) and Transcept Pharmaceuticals, Inc., a privately-held specialty pharmaceutical company, announced today that they have entered into a definitive merger agreement under which Novacea will merge with Transcept in an all-stock transaction. Under the terms of the merger agreement, Novacea will issue new shares of its common stock to Transcept stockholders based on an exchange ratio to be determined prior to the closing of the transaction. Under the exchange ratio formula defined in the merger agreement, the former Transcept stockholders are expected to own 60 percent of the combined company, and the former Novacea stockholders are expected to own 40 percent of the combined company, each on a fully-diluted basis. This ratio is subject to potential adjustments as described in the merger agreement.

 

John P. Walker, Novacea's Chief Executive Officer and Chairman of the Board, commented, “Since announcing our plans to seek strategic alternatives following termination of the ASCENT-2 study, our priority has been to identify a merger candidate with a late-stage product opportunity that we believe has the potential to provide meaningful long-term value to our stockholders. Following a rigorous due diligence and evaluation process, we concluded that a merger with Transcept offers an excellent opportunity to create such value. We believe that Transcept represents an attractive merger partner for Novacea as Transcept seeks to complete its regulatory approval process and utilizes our cash resources in their potential Intermezzo