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Eyenovia (EYEN, Financials) shares fell 14% to $1.44 as of 12:44 p.m. GMT-4 on Thursday after the company announced a non-binding letter of intent to merge with Betaliq, a clinical-stage pharmaceutical company specializing in glaucoma treatments.
Combining Eyenovia's Optejet dispensing system with Betaliq's EyeSol medication delivery mechanism, the purchase would create a new publicly traded ophthalmology firm.Assuming zero net cash upon closure, the acquisition values Betaliq at around $77 million and Eyenovia at almost $15 million. While Eyenovia owners would retain 16.3% on a fully diluted basis, Betaliq equity holders would control about 83.7% of the merged firm.The firms stated the acquisition is still under due consideration, board approvals, formal agreements, and financial contingency. About the timetable or completion of the merger, no guarantee was offered.Whereas Betaliq's EyeSol technology seeks to increase bioavailability in glaucoma therapies, Eyenovia's Optejet platform is meant to improve ocular medication delivery. EyeSol has been licensed for use in FDA-approved eye care products, including MEIBOTM and VEVEYTM, the firms pointed out.Eyenovia said it would keep promoting its FDA-approved portfolio while looking for other in-licensing prospects to boost income. The business also is on schedule to submit for fourth quarter U.S. regulatory clearance of a user-filled Optejet device.If the transaction is finalized, Eyenovia CEO Michael Rowe said the two technologies will be combined to enhance eye drug delivery. Barry Butler, CEO of Betaliq, said the mix offers a chance to increase glaucoma and other eye problem therapy choices.While Raymond James is representing Betaliq, Chardan is counseling Eyenovia on the offer. Eyenovia stated it does not intend to provide any updates unless a clear agreement is obtained or legal disclosure is mandated.
This article first appeared on GuruFocus.