Shares of Brooklyn ImmunoTherapeutics (BTX -4.24%), no stranger to sharp stock price movements lately, zoomed more than 6% higher on Monday. The catalyst was an acquisition announced that morning by the clincial-stage biotech company.
In a joint press release, Brooklyn and Novellus Therapeutics announced that the former has executed a letter of intent to acquire the latter. The next step is for the two to sign a definite agreement; the letter of intent stipulates that Brooklyn will pay a total of $125 million for privately held Novellus. Of this, nearly $108 million will be paid in Brooklyn stock, with the remainder in cash.
The two companies added that they intend to close the deal on or prior to July 15.
"This acquisition would further advance Brooklyn's evolution into a platform company with a pipeline of next-generation gene and cell therapy programs," that company's CEO Howard Federoff was quoted as saying.
"We believe Novellus' next-generation engineered [mesenchymal stem cell] platform can position Brooklyn to become a leader in stem cell therapies, with the ability to develop multiple therapeutic candidates rapidly," he added.
The two companies are not strangers to each other. In April, Brooklyn obtained an exclusive license from Novellus and its peer Factor Bioscience for the use of messenger RNA (mRNA) gene editing and cell therapy technology. Thanks to the proliferation of mRNA-based coronavirus vaccines, this is a hot area in biotech just now, so Brooklyn's deal feels like an opportunistic and clever move.