Cerulean sells assets, lays off staff as Daré Bio becomes majority owner; shares plummet 62% premarket

|By:, SA News Editor

Nano cap Cerulean Pharma (NASDAQ:CERU) craters 62% premarket on robust volume in response to its announcement that it has sold certain assets for $7.5M in conjunction with a stock purchase deal with Daré Bioscience making the La Jolla, CA-based firm the majority owner in Cerulean. The company will do business as Daré Bioscience.

Cerulean has entered into an agreement with NewLink Genetics subsidiary BlueLink Pharmaceuticals for the sale of product candidates CRLX101 and CRLX301 for $1.5M and an agreement with Novartis for the sale of all rights to its Dynamic Tumor Targeting Platform for $6M, subject to CERU shareholder approval.

In connection with the transactions, Cerulean will pay off its debt facility with Hercules Capital and lay off 58% (11 employees) of its workforce.

The deals will enable Cerulean to transition its focus to women's reproductive health. Daré's lead product candidate is Ovaprene, a clinical-stage, non-hormonal contraceptive ring for monthly use, which it says is a significant unmet need.

Under the terms of the stock purchase agreement, Daré stockholders will receive newly issued shares of Cerulean while outstanding Daré options and convertible securities will be assumed by Cerulean. Depending on certain conditions, Cerulean stockholders will own 30 - 49% of the combined firm.

The boards of both companies have OK'd the deal, expected to close next quarter.