Flex Pharma stock was on the rise today following news of a merger with Salarius Pharmaceuticals.
The deal will have a wholly owned subsidiary of Flex Pharma (NASDAQ:FLKS) merging with Salarius Pharmaceuticals. Once the deal is complete, FLKS will be changing its name to Salarius Pharmaceuticals.
When the deal reaches completion, the current management team of Salarius Pharmaceuticals will lead the new company. Flex Pharma’s President and CEO William McVicar will also join the company’s Board of Directors.
The deal between the two companies will result in holders of Flex Pharma stock having a 19.9% stake in the new company. The remaining will belong to current investors of Salarius Pharmaceuticals. There is also a warrants option for holders of Flex Pharma stock that will allow them an additional 2.4% stake in the company.
With the two companies merging to become one, the new focus will be on Salarius Pharmaceuticals pipeline of treatments for orphan cancers and other cancers without treatment options. Money from the combined company is expected to keep it running until mid-2020, which is enough time for it to report “early cohort data from an ongoing Phase 1 Ewing sarcoma trial.”
The deal between Flex Pharma and Salarius Pharmaceuticals already has the unanimous approval from both companies’ Board of Directors. It still needs approval from investors in FLKS stock and Salarius Pharmaceuticals, as well as completing other customary closing conditions. If all goes well, the deal is set to close in the first half of 2019.
FLKS stock was up 47% as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.