Synta Pharmaceuticals, Madtrigal Pharmaceuticals Enter Merger Agreement

Synta Pharmaceuticals (SNTA) and Madrigal Pharmaceuticals, a privately-held company, announced that they have entered into a definitive merger agreement under which Madrigal will merge with a wholly-owned subsidiary of Synta in an all-stock transaction. The Merger will create a company focused on the development of novel small-molecule drugs addressing major unmet needs in cardiovascular-metabolic diseases and non-alcoholic steatohepatitis.

Madrigal's lead compound, MGL-3196, is a Phase 2-ready once-daily, oral, liver-directed selective thyroid hormone receptor-ss agonist for the treatment of NASH and heterozygous and homozygous familial hypercholesterolemia Upon closing of the transaction, the combined company will be named Madrigal Pharmaceuticals, and Paul A. Friedman, M.D. will become Chairman and CEO. Under the terms of the merger agreement, Synta will acquire all outstanding shares of Madrigal in exchange for approximately 253.9 million newly issued shares of Synta common stock.

Upon completion of the proposed acquisition, it is anticipated that existing Synta shareholders will own 36.0% of the combined company and Madrigal shareholders will own 64.0% of the combined company. The transaction has been approved by the boards of directors of both companies and the shareholders of Madrigal. The merger is expected to close by the end of the third quarter of 2016, subject to customary closing conditions, including approval of the merger by the shareholders of Synta.

An investor syndicate that includes Bay City Capital, Fred Craves, Ph.D., Founder of Bay City Capital, and SQN LLC, a corporation held by Dr. Friedman and Rebecca Taub, M.D., has committed to invest up to $9 million in Madrigal prior to the closing of the Merger.

The combined company intends to use these proceeds, in addition to Synta's cash balance at the closing of the merger, to fund the development of MGL-3196 through Phase 2 clinical studies in NASH, HeFH and HoFH. MTS Health Partners, L.P. and ROTH Capital Partners, LLC served as financial advisors, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as legal counsel to Synta and Stradling Yocca Carlson & Rauth, P.C. served as legal counsel to Madrigal with respect to the transaction.

Disclosure: None.

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