Street Watchdog Positive on Celladon (NASDAQ: CLDN)

Link to News Story
  
November 19, 2015

Earlier this year in June, Celladon Corp announced plans to suspend further research and development of its MYDICAR program, its Stem Cell Factor (mSCF) gene therapy, and its SERCA2b small molecule program.  The stock dropped over 40% on the news.  Previously, the company had been advised by its financial advisor to look for a merger or buyout.

We view today’s merger announcement as a definite step in the right direction.  Celladon has entered into a definitive merger agreement with Eiger BioPharmaceuticals under which the stockholders of Eiger would become the majority owners of Celladon, and the operations of Celladon and Eiger would be combined during the first half of 2016.  An investor syndicate has committed to invest $39.5 million in the combined company, of which $6 million had already been funded and the remainder to be funded upon completion of the proposed merger.

According to Eiger’s CEO David Cory, "The proposed merger and concurrent financing are expected to be sufficient to allow the combined company to obtain Phase 2 clinical trial results from at least two of the four planned development programs by late 2016. We have a dedicated, experienced management team in place and executing on these four novel programs, all of which address potentially significant markets with unmet medical needs."
 
The merger will create a clinical-stage company focused on four orphan diseases, Hepatitis Delta Virus, bariatric surgery-induced hyperinsulinemic hypoglycemia, pulmonary arterial hypertension, and lymphedema.
 
With no new financing necessary through 2016 and 4 development programs in the pipeline, 2 of which will obtain Phase 2 clinical results by late 2016, we view today’s opening price of $1.49 as a very attractive entry point.
 
Disclosure:  We are long CLDN.  We do not have a financial relationship with the company.