Months after further shrinking its pipeline, Liminal BioSciences has accepted a buyout offer from its top shareholder, Structured Alpha LP, at a 135% premium from the biotech’s current share price.
The deal, announced Wednesday, will pay Liminal shareholders $8.50 per share, a dollar higher than the first offer relayed by the biotech’s management in April. Structured Alpha, run by Thomvest Asset Management, owned nearly two-thirds of the company when it first made the proposal a few months ago.
“The transaction will deliver immediate value and liquidity to our minority shareholders at a substantial premium,” said Liminal CEO Bruce Pritchard in a release.
Liminal had not explicitly sounded the fiscal alarm but had sent out flares earlier this year when it announced it was divesting from “non-core assets” to save cash, with a runway long enough to last into early 2024. That’s not a lot of cash with no clinical-stage assets.
That could change soon, however, as Liminal plans to launch a phase 1 trial of its GPR84 antagonist in the second half of the year. The company has yet to prioritize a lead indication for the asset but plans to test it in metabolic diseases including nonalcoholic steatohepatitis. The company is also looking at treating irritable bowel syndrome and idiopathic pulmonary fibrosis (IPF).
The asset is a second try at clinical success just over two years after Liminal halted further development of fezagepras after getting a peek at phase 1 pharmacokinetic data. The biotech was testing the med as a treatment for both IPF and hypertriglyceridemia before pressing pause.
The proposed value of the deal would pay out minority shareholders at a stock price not seen since roughly April 2022. News of the acquisition has since rallied the company’s value, with the share value nearly doubling on April 5, 2023, when the acquisition was first suggested. The company’s stock jumped up 40% again on Wednesday shortly after the market opened, to $8.30 per share. Naturally, Liminal’s board is recommending that minority shareholders greenlight the deal at an upcoming shareholder meeting.