ZyVersa Therapeutics has signed a definitive business combination agreement with blank-check special purpose acquisition company (SPAC) Larkspur Health Acquisition.
The deal, which will make ZyVersa a publicly traded biopharma company, values the merged entity at an estimated pro forma enterprise value of nearly $108.92m.
It is expected to offer cash proceeds of up to $83.12m to ZyVersa, comprising up to nearly $77.67m of cash in the trust account of Larkspur and around $7m from private investment in public equity (PIPE) investment.
A clinical-stage speciality biopharmaceutical firm, ZyVersa uses advanced technologies for developing product candidates to address unmet medical needs in renal and inflammatory disease areas.
Its development pipeline comprises a cholesterol efflux mediator, VAR 200 and a new inflammasome ASC inhibitor, IC 100.
VAR 200 is ready to enter Phase IIa clinical development and is intended to treat rare kidney disease and focal segmental glomerulosclerosis.
ZyVersa expects that VAR 200 can potentially treat various other glomerular diseases, such as Alport syndrome and diabetic kidney disease.
Furthermore, the company’s development pipeline includes a new inflammasome ASC inhibitor for treating various inflammatory ailments.
The PIPE investment proceeds will be utilised as working capital as well as to progress the clinical assessment of its product VAR 200 and progress another product, IC 100, into clinical trials.
The deal is expected to offer ZyVersa access to the public equity market, which the companies believe will expedite the development of renal and inflammasome product candidate pipelines of ZyVersa.
Expected to be called ZyVersa Therapeutics, the merged business will continue to run under the management team of ZyVersa led by co-founder, CEO and chairman Stephen Glover.
Glover said: “This merger and entry into the public markets will enable us to escalate the development of our pipeline drug candidates for targeted patients with renal and inflammatory diseases, who have the need for disease-modifying drugs that are well tolerated and safe.
“We believe our drug candidates in development for these patients have the potential to meet these needs and help drive improved health outcomes.”
The boards of directors of Larkspur and ZyVersa have granted unanimous approval for the deal.
Subject to necessary conditions and approvals, the deal is anticipated to conclude in the fourth quarter of this year.