Bard1 Life Sciences and Sienna Cancer Diagnostics announce $23.7m merger

Medical technology companies Bard1 Life Sciences (ASX: BD1) and Sienna Cancer Diagnostics (ASX: SDX) will stage a $23.7 million merger to create an Australian-based cancer diagnostics entity focused on addressing unmet needs in early cancer detection.

Under the terms of the agreement, Bard1 will acquire 100% of Sienna’s issued share capital by offering Sienna shareholders 13 shares in Bard1 for every five Sienna shares held.

The offer values Sienna at $0.06 per share – representing a premium of 119% to Sienna’s one-month volume weighted average price of $0.027 per share.

The transaction is valued at approximately $23.7 million on a fully-diluted basis.

Bard1 and Sienna have novel technology platforms and in-development products for early-stage testing in areas of “great unmet medical need” including pancreatic, breast, ovarian and bladder cancers.

World-leading products

The merger has been marketed as a “compelling opportunity” to develop world-leading new cancer diagnostic products for screening, diagnosis, prognosis, treatment selection and monitoring through a combination of Bard1’s proprietary tumour marker technology and Sienna’s molecular net technology which focuses on exosome enrichment and purification in the rapidly-growing liquid biopsy space.

Strengthened leadership, expanded diagnostic technology, a broader product portfolio and economies of scale will position the new entity to generate long-term sustainable growth.

It is expected to also benefit from operational efficiencies, shared staff and administration, and a consolidated Melbourne-based office and laboratory facility.

Transformational transaction

Bard1 chief executive officer Dr Leearne Hinch said the “transformational transaction” would create a large Australian medical technology company which is better positioned to raise capital, attract new investors and pursue strategic growth opportunities.

“We are excited by the opportunity to combine businesses to create a leading Australian cancer diagnostics company,” she said.

“Sienna’s in-market bladder cancer test and new molecular NETs technology combined with our strong cancer diagnostics pipeline and scientific expertise in tumour biology will create a larger and more diversified medtech company with a clear focus on delivering innovative cancer diagnostic products to help save patient lives.”

Dr Hinch said the new entity would have a strong balance sheet, an expanded portfolio of cancer diagnostic technologies and a broader management team to help bring products to market.

Strong logic

Sienna chairman Dr Geoff Cumming said the merger could be a real game-changer for the cancer diagnostics industry.

“There is very strong logic for this merger,” he said.

“[Our] two companies have novel technology platforms which aid in the early and accurate diagnosis of a range of cancers in areas of high unmet medical need.

“[Combining them] will provide a deep pipeline of cancer diagnostic tests and an established market channel for commercialisation, providing a strong foundation for future success.”

The merger is to be implemented under a scheme of arrangement and is subject to a number of conditions, including the approval of Sienna shareholders and court and regulatory approvals.

At mid-morning, Bard1 shares were trading 16% higher at $0.029 while Sienna was up 107.41% to $0.056.