Proteon Therapeutics Inc. announced a merger with privately owned ArTara Therapeutics Inc., and investors have agreed to purchase $42.5 million of the combined company's stock.
Waltham, Mass.-based Proteon is a pharmaceutical company focused on kidney and vascular diseases. After a late-stage clinical trial showed in March that Proteon's kidney treatment failed to perform better than placebo, the company's stock plummeted more than 85%.
ArTara is a New York company that acquires and develops products for rare diseases, including a lead program called TARA-002 that has received the U.S. Food and Drug Administration's orphan drug designation to treat malformations in the lymphatic system.
The financing from the stock purchase agreement will help fund further development of that treatment and another from ArTara aimed at certain patients with liver disease.
A wholly owned subsidiary of Proteon will combine with ArTara under the merger agreement, pending stockholder approval. The combined subsidiary would be named ArTara Therapeutics Inc. and trade under the ticker symbol TARA on the Nasdaq Capital Market.
"Following an extensive and thorough review of strategic alternatives, we strongly believe this transaction with ArTara is the best path forward and has the potential to deliver significant and near-term value to Proteon Therapeutics' stockholders," Proteon CEO Timothy Noyes said in a Sept. 23 release.
The merger has received unanimous approval from both boards of directors and is expected to close by the end of the year.
Shares of Proteon closed the day at 33 cents each and rose 15.98% to 38 cents per share after the closing bell, as of 5:07 p.m. ET, Sept. 23.
