Graybug and CalciMedica Enter into Definitive Merger Agreement

Graybug and CalciMedica Enter into Definitive Merger Agreement

November 23, 2022

Graybug Vision and CalciMedica have entered into a definitive merger agreement to combine the companies in an all-stock transaction.

The combined company will concentrate on further developing CalciMedica's lead product candidate Auxora, a small molecule calcium-release activated calcium (CRAC) channel inhibitor, to treat life-threatening inflammatory diseases, such as acute pancreatitis (AP), asparaginase-associated pancreatitis (AAP), acute kidney injury (AKI), and acute hypoxemic respiratory failure (AHRF). There are no currently approved therapies for these diseases.

Four effectiveness clinical trials of auxora, which controls immune response and guards against tissue cell harm, have been completed. These studies have shown positive and reliable clinical outcomes as well as an acceptable safety profile. The combined company is anticipated to trade on the Nasdaq Global Market, subject to stockholder approval for each company.

The combined company is expected to have a cash runway into the second half of 2024 thanks to its anticipated $35 million in cash and cash equivalents, including a private placement financing that is anticipated to take place right before the merger closing. This runway will be used to fund the advancement of Auxora in AP and AAP through clinical milestones in 2023. The proposed merger is expected to close in the first quarter of 2023.

“After completing a comprehensive strategic review, we determined that the proposed merger with CalciMedica would provide the best return for Graybug stockholders moving forward,” Frederic Guerard, PharmD., Chief Executive Officer of Graybug, said in a company news release. “The decision by our management and board of directors to select CalciMedica to be our merger partner will allow our stockholders to participate in a company with a strong clinical-stage pipeline poised to revolutionize treatment for large, underserved patient populations suffering from life-threatening inflammatory diseases worldwide.”

About the Proposed Transaction, Management and Organization

Graybug equity holders are expected to collectively own approximately 29% of the combined company, and pre-merger CalciMedica equity holders are expected to collectively own approximately 71% of the combined company, in each case, on a fully diluted basis using the treasury stock method. The percentage of the combined company that Graybug’s equity holders will own as of the close of the transaction is subject to certain adjustments as described in the merger agreement, including an adjustment based on the amount of Graybug’s net cash at closing.

The combined company will have its headquarters in La Jolla, California, and Rachel Leheny, PhD, will be its chief executive officer. According to the merger agreement, the combined company's board of directors will be made up of seven people, five chosen by CalciMedica and two chosen by Graybug.

The boards of directors of both organizations have unanimously accepted the merger agreement, which is still awaiting approval from the investors of each organization as well as a few other standard closing requirements.