Full Press Release Details
Chardan Healthcare Acquisition Corp. Announces
Merger Agreement with BiomX Ltd.
- Combined Company Expected to Be Listed
on the NYSE American Stock Exchange -
- Joint Investor Conference Call Scheduled
NEW YORK and Ness Ziona, Israel, July 17, 2019 --
Chardan Healthcare Acquisition Corp. (NYSE: CHAC, "CHAC"), a special purpose acquisition company ("SPAC")
sponsored by affiliates of Chardan Capital Markets LLC ("Chardan"), announced today that it has entered into a definitive
agreement for a business combination with BiomX Ltd. ("BiomX"), a microbiome company developing both natural and engineered
Assuming no redemption of CHAC shareholders, the combined
company will have an initial market capitalization of approximately $254 million. Upon closing of the transaction, it is expected
that CHAC will be renamed BiomX and remain on the NYSE American Stock Exchange, listed under a new ticker symbol.
CHAC has entered into a mix of commitments including purchase
and sale, backstop, and voting agreements with BiomX and with investors -- including OrbiMed, RTW Investment, Johnson & Johnson
Innovation - JJDC, Inc. (JJDC), Takeda Ventures, Inc., MiraeAsset, Seventure Partners' Health for Life Capital I, SBI Japan-Israel
Innovation Fund, as well as RM Global Partners (RMGP) BioPharma Investment Fund -- so that the $50 million minimum closing condition
for the transaction has been satisfied prior to today's announcement.
Proceeds from the transaction will provide BiomX with substantial
growth capital and the flexibility of a public listing to further accelerate BiomX's expansion as a leading microbiome product
discovery company. BiomX is developing customized phage-based products designed to improve the appearance of acne-prone skin and
eradicate harmful bacteria in chronic diseases. The company's pipeline includes preclinical candidates for acne-prone skin,
inflammatory bowel disease (IBD), primary sclerosing cholangitis (PSC), and colorectal cancer (CRC). BiomX's product for
acne-prone skin is anticipated to begin clinical testing by the end of 2019. The combined company will continue to be led by BiomX's
experienced management team headed by Chief Executive Officer Jonathan Solomon.
"We created CHAC to partner with an innovative biotechnology
company that would benefit from a public listing, could use our cash resources to implement groundbreaking clinical work, and whose
products and technology could lead to significant growth and drive long-term returns for our shareholders," said Jonas Grossman,
CHAC's President and Chief Executive Officer. "BiomX has all those qualities, along with an experienced management
team ready to take the reins of a public company. We believe this transaction leaves BiomX with a strong balance sheet and sufficient
cash for the company to reach multiple value inflection points in its leading clinical programs." George Kaufman, CFO and
Head of Strategy at CHAC, noted, "We believe we have structured a transaction that will deliver value to all stakeholders
and creates opportunity for new investors. We are excited to make use of inherent features of the SPAC in combination with the
fundamental qualities of BiomX and supportive shareholders for the benefit of all of our partners."
"Having our existing investors participate in this
financing, along with additional life science funds who have not previously invested in BiomX, demonstrates their confidence in
our approach of using both natural and engineered phage cocktails to eradicate harmful bacteria in chronic diseases and conditions,"
said Jonathan Solomon, Chief Executive Officer of BiomX. "This merger will provide us with substantial additional financial
resources that will support our upcoming clinical trials, speed up our preclinical research and help expand our manufacturing
Gbola Amusa, M.D., C.F.A, Executive Chairman of CHAC, added,
"We see growing investment momentum and interest in phage as a potentially disruptive and safe precision tool for the eradication
of specific harmful strains of bacteria. BiomX is well positioned to develop novel phage therapies based in part on its unique
blend of state-of-the-art microbiome, phage, computational biology, and synthetic biology technologies originally licensed from
sources like the Weizmann Institute and MIT. In addition, BiomX is targeting substantial commercial markets. The global market
for cosmetics products for acne-prone skin according to WiseGuy Reports was approximately $4 billion in 2018. EvaluatePharma estimates
the global IBD and global colorectal cancer markets, respectively, generated $17.7 billion and $8.4 billion in prescription sales
in 2018. For another of BiomX's target indications, PSC, we estimate the total addressable US market could be more than
$3.5 billion in sales."
"We have supported BiomX's development and growth
because of its talented management team and innovative drug development capabilities," said Robbie Woodman, Ph.D., Senior
Partner at Takeda Ventures, Inc. and member of the BiomX Board of Directors. "The combined company is well positioned to
advance its programs for acne-prone skin, IBD and PSC."
The respective boards of directors of both CHAC and BiomX
have approved the proposed transaction. Completion of the transaction, which is expected in October 2019, is subject to approval
by CHAC stockholders and satisfaction of other closing conditions.
Chardan is acting as CHAC's M&A and capital markets advisor.
Cantor is acting as capital markets advisor to BiomX. Loeb & Loeb LLP and Meitar Liquornik Geva Leshem Tal are representing
CHAC. Goodwin Procter LLP, Mayer Brown LLP and ZAG-S&W Zysman Aharoni Gayer & Co are representing BiomX.
Summary of Transaction
CHAC raised $70 million in its IPO which is now held in
a trust account. Under the terms of the proposed transaction announced today, CHAC will issue 16.625 million shares and vested
securities to current securityholders of BiomX. Certain BiomX shareholders may, subject to the terms of the investment agreements,
receive up to an additional 6.0 million CHAC shares: 2.0 million shares if the share price exceeds $16.50 by fiscal year 2021,
an additional 2.0 million shares if the share price exceeds $22.75 by fiscal year 2023, and an additional 2.0 million shares if
the share price exceeds $29.00 by fiscal year 2025.
After giving effect to the investor transactions being undertaken
in order to meet the minimum cash condition, and assuming no redemption from CHAC shareholders, it is estimated that the current
securityholders of BiomX will own approximately 73% of the issued and outstanding vested securities in the combined company at
Post-closing, Mr. Solomon and three current BiomX directors
will join Mr. Grossman and Dr. Amusa from CHAC on the seven-person board of directors. An additional board member will be designated
The description of the business combination contained herein is only a summary
and is qualified in its entirety by reference to the definitive agreement relating to the business combination, a copy of which
is filed by CHAC with the Securities and Exchange Commission ("SEC") as an exhibit to a Current Report on Form 8-K.
Additional information about the proposed transaction is described in CHAC's preliminary proxy statement relating to the
business combination, which has been filed with the SEC and is available at
CHAC will host a conference call to discuss the proposed
business combination with the investment community on July 17, 2019 at 8:30 AM EDT. Investors may listen to the conference
call by dialing (877) 705-6003 toll-free in the U.S. or (201) 493-6725 internationally. The conference ID number is 13692693. The
conference call webcast will be available at http://public.viavid.com/index.php?id=135425. A related investor presentation
with more detailed information regarding the proposed transaction will be furnished today to the SEC, and can be viewed at the
SEC's website at www.sec.gov. A transcript of the investor call, when available, as well as the investor presentation, can also be
found on the BiomX website provided below.
BiomX is a preclinical stage microbiome company developing
both natural and engineered phage cocktails designed to target and destroy bacteria that affect the appearance of skin, as well
as harmful bacteria in chronic diseases, such as IBD, PSC, and cancer. BiomX discovers and validates proprietary bacterial targets
and customizes phage compositions against these targets.
No portion of BiomX's website is incorporated by reference
into or otherwise deemed to be a part of this press release.
About Chardan Healthcare Acquisition Corp.
CHAC is a special purpose acquisition company formed for
the purpose of effecting a merger, acquisition, or similar business combination. CHAC raised $70.0 million in December 2018 for
the purpose of combining with a public or privately-held operating business. CHAC was founded and sponsored by affiliates of Chardan
Capital Markets LLC. CHAC is Chardan's fifth publicly traded acquisition vehicle.
Safe Harbor Language
This press release contains certain "forward-looking
statements" within the meaning of the "safe harbor" provisions of the US Private Securities Litigation Reform
Act of 1995. Forward-looking statements can be identified by words such as: "target," "believe," "expect,"
"will," "may," "anticipate," "estimate," "would," "positioned,"
"future," and other similar expressions that predict or indicate future events or trends or that are not statements
of historical matters. Examples of forward-looking statements include, among others, statements made in this press release regarding