Flex Pharma Inc. (FLKS) and Salarius Pharmaceuticals LLC, a clinical-stage oncology company targeting the epigenetic causes of cancers, said that they have entered into a definitive merger agreement under which privately-held Salarius will merge with a wholly-owned subsidiary of Flex Pharma.
Salarius recently completed a $6.4 million private placement, which combined with cash from Flex Pharma is expected to fund the combined company to mid-2020, allowing it to report early cohort data from an ongoing Phase 1 Ewing sarcoma trial.
Upon the closing of the transaction, Flex Pharma stockholders will own approximately 19.9% of the combined company and current Salarius investors will own approximately 80.1% of the combined company. Flex Pharma stockholders will also receive a right to receive warrants, six months and one day following the closing date of the transaction, allowing them to purchase additional shares.
The total value of these warrants will be calculated such that upon exercise Flex Pharma stockholders would own an additional 2.4%, or a total of 22.3%, of the value of the combined entity, subject to adjustment based on Flex Pharma's net cash at closing.
Upon closing of the transaction, Flex Pharma is expected to be renamed Salarius Pharmaceuticals, Inc. and be under the leadership of Salarius' current management team, led by Chief Executive Officer, David Arthur. The Salarius clinical pipeline will become the lead assets of the company following the transaction.
Flex Pharma President and Chief Executive Officer, William McVicar, Ph.D., is expected to join the Board of Directors of the combined company following the closing of the transaction.
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