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SAN FRANCISCO – In a strategic move in the biopharmaceutical space, XOMA Corporation has agreed to acquire Kinnate Biopharma Inc. for cash consideration. The consideration values the oncology-focused company at a price per share ranging from $2.3352 to $2.5879. The acquisition includes a base cash price and an additional cash amount contingent on the sale of certain of his Kinnate assets.
After comprehensive consideration, the definitive merger agreement, which was unanimously approved by the members of Kinnate's independent board of directors, includes a tender offer to be initiated by a subsidiary of XOMA to purchase all outstanding shares of Kinnate common stock. It will be. The tender offer is expected to commence by March 4, 2024, and closing conditions include a majority of Kinnate's shares being tendered and at least $120 million in net cash upon closing.
Kinnate's officers, directors and certain shareholders, who collectively own approximately 46% of the common stock, have agreed to support the merger. The transaction is expected to close in the first half of 2024.
Kinnate Biopharma is a clinical-stage company specializing in precision oncology with a focus on developing targeted therapies for cancer-causing factors that are not addressed by current treatments. The company's lead product candidates include exarafenib, a pan-RAF inhibitor that targets cancers with specific genetic mutations, and his FGFR inhibitor, which is in clinical trials for cancers with FGFR2 and FGFR3 mutations.
The merger agreement also provides for a contingent consideration right that allows Kinnate stockholders to receive a portion of the net proceeds from the potential sale of exarafenib or other assets within a specified period of time.
Leerink Partners is serving as lead financial advisor to Kinnate, and Wilson Sonsini Goodrich & Rosati is serving as legal advisor. Lazard (NYSE:) also acts as a financial advisor.
This announcement is based on a statement in a press release.
Investment Pro Insights
Given XOMA Corporation's recent move to acquire Kinnate Biopharma Inc., a closer look at Kinnate's financial health and market performance provides further context for potential investors. Kinnate has a market capitalization of $106.95 million, making it a modest player in the biopharmaceutical industry. The company's financial metrics reveal a difficult situation with a price-to-earnings ratio (PER) of -0.82 and an adjusted P/E ratio of -0.86 for the trailing 12 months as of Q3 2023, making it difficult for investors to evaluate the company's earnings. It indicates that you are evaluating. This is in line with analysts' expectations that Kinnate will not be profitable this year.
Additionally, Kinnate's price-to-book multiple (P/B) of 0.62 may indicate that its stock price is undervalued relative to its assets, making it a valuable asset for value-oriented investors considering acquisition terms. This is something investors should pay attention to. However, the company's return on assets (ROA) for the same period was significantly negative at -51.6%, highlighting the company's difficulty in generating profits from its asset base.
From the perspective of InvestingPro Tips, Kinnate has more cash than debt, which is a positive sign of financial stability, and current assets exceed short-term debt, which is a positive sign of financial stability. This suggests that the situation is solid. However, it's important to note that Kinnate is rapidly burning through cash and suffers from low gross margins, which could raise concerns about its long-term sustainability. Additionally, Kinnate doesn't pay a dividend, which may deter income-oriented investors.
These financial insights are critical for anyone considering the impact of XOMA's acquisition of Kinnate. Visit InvestingPro for more analysis and tips, including a total of 8 additional InvestingPro tips about Kinnate.You can also take advantage of special offers using coupon codes pro news 24 Get an extra 10% off annual or biennial Pro and Pro+ subscriptions.
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