Conatus Pharmaceuticals’ Merger Agreement with Histogen Enter

Canaccord Genuity LLC is acting as financial advisor to Histogen in the transaction. Conatus’ financial advisor in the transaction is Oppenheimer & Co., Inc. Sheppard Mullin Richter & Hampton LLP is serving as legal counsel to Histogen and Latham and Watkins LLP is serving as legal counsel to Conatus.

Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) and Histogen Inc., a privately-held regenerative medicine company with a novel biological platform that replaces and regenerates tissues in the body, announced the companies have entered into a definitive agreement under which Histogen will merge with a wholly-owned subsidiary of Conatus in an all-stock transaction. The combined company will operate under the name Histogen, Inc., is expected to trade on the Nasdaq Capital Market under a new ticker symbol still to be determined and will focus on advancement of its patented technology for dermatological and orthopedic indications.

Under the terms of the merger agreement, pending stockholder approval of the transaction, Histogen will merge with a wholly-owned subsidiary of Conatus and Histogen stockholders will receive newly issued shares of Conatus common stock. The exchange ratio used to determine the number of shares of Conatus common stock issuable to Histogen stockholders pursuant to the merger was determined using a pre-transaction valuation of $100 million for Histogen’s business, based on its latest priced investment round and clinical pipeline advancement, and $35.135 million for Conatus’ business, an approximately 155% premium to the 20-day volume weighted average closing share price of Conatus prior to the signing date on the Nasdaq Capital Market. As a result, current Conatus stockholders will collectively own approximately 26%, and Histogen stockholders will collectively own approximately 74%, of the combined company on a fully-diluted basis, after taking into account Histogen’s and Conatus’ outstanding options and warrants at the time of closing, irrespective of the exercise prices of such options and warrants, with such ratio subject to adjustment based on each company’s net cash balance at closing.

The combined company, led by Histogen’s current management team, is expected to be named Histogen Inc. and be headquartered in San Diego, CA.

The Sheppard Mullin team is led by partner Will Chuchawat (Picture) and includes partner Jeff Fessler and special counsel Andreas Pour.

Involved fees earner: Will Chuchawat – Sheppard Mullin; Jeffrey Fessler – Sheppard Mullin; Andreas Pour – Sheppard Mullin;

Law Firms: Sheppard Mullin;

Clients: Histogenics Corporation;

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Author: Ambrogio Visconti