After finishing up its strategic alternatives review, OvaScience, which is focused on developing treatments for infertility, decided the best way to go for shareholders was to merge into Millendo Therapeutics, a clinical-stage biopharmaceutical company focused on developing novel treatments for orphan endocrine diseases.
OvaScience’s market cap was just $26 million, and it really hadn’t had any revenues yet. What it did have was cash, a total of $53.6 million of it (combined with short-term investments) as of June 30, 2018. Management at OvaScience must have thought that Millendo would have better use of that cash than for its own research.
In merging with OvaScience, not only does Millendo get access to that cash, but it also gets a public listing, as the combined entity will have a new ticker of “MLND” on the Nasdaq Capital Market. Millendo’s shareholders will own 80% of the combined company with 20% going to the shareholders of OvaScience. That is, at least, until an investor syndicate injects another $30 million of cash into the merger company. These investors include New Enterprise Associates, Frazier Healthcare Partners, Roche Venture Fund, Innobio managed by Bpifrance, Osage University Partners, Altitude Life Science Ventures, Adams Street Partners and Longwood Fund.
Some OvaScience shareholders were not too happy, since the company’s cash levels were two times the market cap of the company. Hopefully this will be a better long-term use of that cash. At least these VC investors think so.
