Jounce dumps Redx Pharma for acquisition by Concentra; to cut 84% of jobs
(Reuters) - Jounce Therapeutics Inc on Monday agreed to be acquired by privately held Concentra Biosciences for $96.46 million, while spurning a merger deal with British biotech firm Redx Pharma.
The new Concentra deal also involves a workforce reduction of about 84% of Jounce's employees, compared to about 57% as part of the Redx deal, Jounce said in a statement.
The deal with Concentra, which is controlled by Jounce investor Tang Capital Partners, provides an upfront payment of $1.85 per share to Jounce's shareholders, plus contingent value rights of 80% of the net proceeds that come from licencing or disposing of some Jounce assets.
Concentra Biosciences' offer price represents a 22.5% premium over the last close. The private firm will acquire the shares through a tender offer by April 7, Jounce said.
The Concentra deal closure, expected in the second quarter, is subject to Jounce having at least $110 million in net cash reserves.
Tang Capital owns a 10.2% stake in Jounce.
Jounce Therapeutics' shares rose 23% to $1.85 in morning trade.
Redx had last month agreed to an all-stock merger with Jounce, valuing the combined company at $425 million, and with Jounce shareholders owning 37% of it.
Redx shares fell 11% on the London Stock Exchange after the Jounce deal fell through on Monday, with the British company company voicing its disappointment.
"Whilst the offer for Redx has not formally lapsed under the UK Takeover Code, the board will consider all options available to it in line with our strategy," Redx Chair Jane Griffiths said in a statement.
Concentra's acquisition is expected to close in the second quarter of 2023.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Pooja Desai)