Apollo Endosurgery and Lpath Inc. (NSDQ:LPTN) said yesterday that they inked a reverse merger agreement that will see Apollo’s owners become majority owners of the pharmaceutical company.
Apollo plans to put another $29 million into the combined company, which will adopt the Apollo Endosurgery name, but apply for a new Nasdaq ticker symbol. The investment will form part of Apollo’s 95.8% ownership of the company, with Lpath owners expected to own approximately 4.2% of the combined company.
“Executing this transaction with Lpath is an expedient way to introduce our company to the public market. With the additional equity support we will receive from Apollo’s major investors as part of this transaction, we will have the resources to meet our near-term business needs,” Apollo CEO Todd Newton said in a press release.
Major investors involved in the $29 million investment include affiliates of PTV Healthcare Capital, H.I.G. BioHealth Partners, Remeditex Ventures, Novo A/S and CPMG Inc, the companies said.
“Following an extensive and thorough review of strategic alternatives, we have chosen to merge with Apollo because we believe the transaction provides Lpath stockholders with an attractive opportunity for value appreciation,”Lpath CEO Gary Atkinson said in prepared remarks.
Boards of both companies have unanimously approved the transaction, which is subject to standard closing conditions. The merger is expected to close during the 4th quarter of 2016.