BOTHELL – Sonus Pharmaceuticals Inc. announced this morning it will merge with Vancouver, B.C.-based OncoGenex Technologies Inc., a privately held biopharmaceutical company.
Sonus’ stock was down 11 percent, or about 4 cents, as of mid-morning.
Scott Cormack, OncoGenex’ president and chief executive officer, will lead the combined company. It was unclear this morning what role Michael Martino, Sonus’ longtime CEO, will have in the new biotechnology firm.
Sonus had been looking at mergers or another way to rebuild after seeing the company’s value and revenue plummet when its lead cancer drug candidate failed in late-stage clinical trials last fall.
A lucrative drug development partnership with Bayer Schering fell apart as a result. In the aftermath, Sonus’ shares plummeted more than 90 percent. Sonus ended up cutting its staff down to about two dozen people.
The newly combined company will have three cancer drug candidates in various stages of clinical development, including one candidate in phase 2 trials.
“In October 2007, Sonus outlined its strategy to rebuild shareholder value,” Martino said in a written statement. “We believe that this transaction represents an outstanding value creation opportunity for shareholders.”
Under the terms of the proposed merger, OncoGenex’ stock holders will receive approximately 37 million shares of Sonus stock, and OncoGenex will become a wholly owned subsidiary of Sonus Pharmaceuticals Inc. Following the close of the proposed transaction, OncoGenex stockholders will hold 50 percent of Sonus’ shares.
While the boards of both companies approved the transaction, it still needs final approvals.
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