CBio to merge with Inverseon

CBio (ASX:CBZ) will merge with US-based drug discovery company Inverseon, to form a new clinical-stage biotech focused on anti-inflammatory diseases.

Under the deal, which still requires the shareholder and regulatory approvals, Queensland-headquartered CBio will acquire Inverseon for nearly 143.5 million shares.

This will represent a 37.5% slice of the merged company's share capital.

The new company will be given the name Invion. Its lead compound will be INV102, an inverse beta agonist agent.

INV102, or nadolol, is currently in use for the treatment of high blood pressure, migraines and chest pain. But Inverseon is also targeting INV102 for new indications including asthma.

Phase II trials of INV102 in asthma are expected to commence in the third quarter.

Invion will also continue development of CBio's main asset Cpn10, which is being developed as a potential lupus treatment.

Inverseon director Dr William Garner will take charge of Invion as CEO if and when the merger takes place. His fellow board member, Dr Mitchell Glass, will become the new company's chief medical officer.

CBio was founded in Brisbane in 2000, while Inverseon was established in 2004 and is headquartered in San Francisco.

Announcing the proposed merger, CBio's board said it believes the deal will be valuable to its shareholders due to Infineon's potentially valuable assets, as well as its progress commercialising IND102 in inflammatory conditions of the lungs.

The board said IND102 has the potential to “trigger a paradigm shift” in the treatment of these conditions.

CBio (ASX:CBZ) shares had climbed 15% to $0.069 by 2:30pm on Monday, the day the merger plan was announced, suggesting that shareholders agree with the board's perception of its value.