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Catalyst Biosciences Completes Merger with Targacept

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News

Catalyst Biosciences Completes Merger with Targacept

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Catalyst Biosciences, Inc. has announced the completion of its merger with Targacept, Inc., effective as of August 20, 2015.

Together with approximately $35 million net cash on Targacept’s balance sheet, the combined company has approximately $39 million in cash to advance its research and development efforts, including the clinical development of CB 813d, Catalyst’s next-generation and long-acting coagulation Factor VIIa. CB 813d has demonstrated initial safety and pharmacologic activity to support the start of Phase 2 clinical development in 2016 for the potential treatment of bleeding in hemophilia patients with inhibitors.

On August 20, 2015, prior to the closing of the merger, Targacept completed a seven-for-one reverse stock split. As a result of the reverse stock split, every seven shares of Targacept common stock outstanding immediately prior to the merger were combined and reclassified into one share of Targacept common stock. No fractional shares are being issued in connection with the reverse stock split. Instead, cash, based on the closing price of Targacept common stock on The NASDAQ Global Select Market on August 20, 2015, will be issued in lieu of fractions of shares.

In addition, on August 19, 2015, in connection with the merger, Targacept paid a dividend to its stockholders of an aggregate cash amount of $19,500,000, and non-interest bearing, redeemable convertible notes with an aggregate principal amount of $37,000,000. At the option of the noteholder, at any time prior to February 20, 2018, the redeemable convertible notes shall be redeemable into cash or convertible into shares of common stock of the combined company, at a conversion rate of $9.19 per share (as adjusted for the seven-for-one reverse stock split).

The holders of shares of Catalyst common stock outstanding immediately prior to the merger received 0.0382 shares of Targacept common stock in exchange for each share of Catalyst common stock in the merger. The exchange ratio reflects the seven-for-one reverse stock split. Following the reverse stock split and the merger, the combined company has approximately 11.4 million shares outstanding.

In connection with the merger, Targacept changed its name to Catalyst Biosciences, Inc. The combined company will commence trading on August 21, 2015 on the NASDAQ Global Market under the symbol “CBIO”.

“With the completion of the merger, we are now well funded and will pursue the clinical development of CB 813d, our improved Factor VIIa, CB 2679d/ISU 304, our improved FIX for hemophilia B, as well as preclinical programs focused on an engineered improved Factor Xa and two novel proteases for the treatment of complement-mediated disorders,” said Nassim Usman, Ph.D., President and Chief Executive Officer of Catalyst. “Catalyst is at an exciting phase of growth as we pursue multiple, clinically relevant opportunities based on engineering human proteases to improve patients’ lives.”

The combined company will operate under the leadership of Catalyst’s management team prior to the merger, including Nassim Usman, Ph.D., President and CEO, Ed Madison, Ph.D., CSO and Fletcher Payne, CFO. The board of directors of the combined company is comprised of seven representatives: four directors from the former Catalyst board, Harold E. Selick, Ph.D., Jeff Himawan, Ph.D., Augustine Lawlor, and Dr. Usman, and three directors from the former Targacept board, John P. Richard, Errol B. DeSouza, Ph.D. and Stephen A. Hill, B.M. B. Ch., M.A., F.R.C.S. Dr. Selick is the new chairman of the board. The corporate headquarters is located in South San Francisco, California.

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