Cleveland will combine with Cytocom in an all-stock transaction.
Cleveland BioLabs, Inc. (CBLI) shares are spiking today after it was reported that the company has signed a definitive merger agreement with, a leading biopharmaceutical company in the area of immune-modulation, Cytocom, Inc.
Shares of Cleveland soared significantly after the news was made public and the stock price doubled at 10:08 A.M. EDT when CBLI was trading as high as $5.16. The shares price traded above the $5 mark for the first time since December 2014.
As we write this at 10:42 A.M. EDT, CBLI was trading at $4.16 rising by almost 90%. The stock began today’s trading session at $2.32 and it continues the bullish momentum as the day goes on.
At the moment, Cleveland is leading the market with the highest trading volume of more than 99 million, way ahead of the second-place stock Acorda Therapeutics (ACOR) which has a volume of just over 68 million.
The merger deal will create a single public company as both the biopharmaceutical firms agree to combine their businesses to focus on the development and commercialization of immunotherapies for oncology, inflammation, auto-immune mediated, and infectious disease conditions.
Both companies will combine their businesses in an all-stock transaction. The proposed transaction is subject to customary closing conditions, including the approval of Cleveland stockholders. Cleveland BioLabs and Cytocom anticipate the closing of the merger transaction to happen during the first quarter of 2021.
As per the merger agreement, Cytocom shareholders will have a majority position in the newly combined entity. The parties expect that the combined company will continue to be listed on Nasdaq. The BoDs for the combined company will consist of four and three members selected by Cytocom and Cleveland BioLabs, respectively. The BoDs of both companies have already approved the combination.
The Chief Scientific Officer of Cleveland BioLabs, Dr. Andrei Gudkov stated:
“This is an exciting day for Cleveland BioLabs and a great opportunity for our stockholders. The merger with Cytocom will allow us to add the strength of our science and bright perspectives associated with Entolimod development in cancer treatment and radiation defense arenas with a string of immunomodulators developed by Cytocom to form a powerful blend of conceptually and scientifically aligned products.”
Cleveland BioLabs believe that the merger with Cytocom is the ideal way to enhance their platform helping the company in its lead drug candidate, Entolimod.
The combined company will create near-term commercial opportunities in various segments of unmet medical needs. The combined company will target to achieve commercial, clinical, and regulatory milestones over a period of 1- and 1.5-years from the day of the merger. The company will operate as Cytocom, Inc., and work under the leadership of Cytocom’s experienced management team.