News Article

Durham outfit to acquire Texas company in a cash-stock deal
Date: Mar 08, 2017
Author: Jennifer Henderson
Source: Bizjournals ( click here to go to the source)

Featured firm in this article: Pelican Therapeutics Inc of San Antonio, TX

Durham's Heat Biologics (Nasdaq: HTBX) has agreed to acquire Austin, Texas-based immuno-oncology company Pelican Therapeutics.

Heat Biologics announced Wednesday that it will pay participating Pelican stockholders "an upfront cash payment not to exceed $500,000" and will issue upward of 1.3 million shares of common stock, or just under 5 percent of outstanding shares. That puts the value of the deal at about $1.5 million.

"In addition, Heat will cause Pelican to pay certain clinical and commercialization milestone payments, royalty and sublicensing income payments, and Heat will loan Pelican amounts sufficient to pay Pelican's transaction expenses," the company stated.

"It's our goal to look to bring on additional technologies and platforms to enhance our current technology platform and really establish ourselves as a leader in the immuno-oncology space," says Heat Biologics CEO Jeff Wolf.

Pelican expects to file an investigational new drug application (IND) for its lead product, a T cell co-stimulator this year, according to Heat Biologics, and is a recent recipient of a $15.2 million grant from its home state.

Heat Biologics has long been familiar with Pelican's technology, notes Wolf, adding the technology of both companies came out of the same lab. Back in 2012, Pelican actually spun out of its soon-to-be acquirer.

"We didn't have the resources at the time ... to focus on the development of two technologies, so we spun out the Pelican technology," says Wolf. Heat Biologics went public the following year.

"We've been following Pelican and thinking about [the acquisition] for quite a while," says Wolf. "I think as we're progressing in our clinical trials and as we see and better understand the importance of immuno-oncology combination therapy to have more sustained and lasting impacts on patients, [it currently] makes a lot of sense."

Heat Biologics' acquisition of Pelican is expected to close on or before April 30. The company has been run virtually so far, says Wolf, with the help of part-time workers and contractors.

Shares of Heat Biologics were up slightly Wednesday afternoon, trading around $0.85.