Conduit Closes SPAC Merger

Conduit Pharmaceuticals, Inc. has found a conduit of its own onto the NASDAQ public market.

Conduit and special purpose acquisition company Murphy Canyon Acquisition Corp. (NASDAQ: MURF) completed on Sept. 22 a deal to combine the companies and bring investor capital to Conduit – a disease agnostic life science company with a novel and efficient model for compound development.

Shares of Conduit (NASDAQ: CDT) began trading Sept. 25 and the combined company debuted with a pro forma enterprise value of approximately $720 million.

De-risking Platform

Conduit is a clinical-stage specialty biopharmaceutical company that focusses on licensing clinical assets from pharmaceutical companies that have otherwise been deprioritized.

“By acquiring rights to develop assets that have successfully completed Phase 1 trials from large pharmaceutical companies, we believe that we may dramatically reduce risks inherent in the traditional biotech model,” said Conduit CEO Dr. Dave Tapolczay.

Conduit’s initial licensed clinical assets are focused on idiopathic male infertility and autoimmune diseases or immunodeficient conditions.

Conduit acquired the assets through an exclusive relationship and partnership with U.K.-based biomedical charity St. George Street Capital, which licensed them from Astra Zeneca. The assets – a glucokinase inhibitor in a number of Phase 2 ready autoimmune diseases including uveitis, Hashimoto’s Thyroiditis, preterm labor and renal transplant; and a Myeloperoxidase (MPO) inhibitor that has the potential to treat idiopathic male infertility – have undergone initial pre-clinical and clinical testing conducted by AstraZeneca.

Under the terms of the partnership, Conduit evaluates the clinical assets held by St. George Street to determine which assets to fund for further development.

Conduit evaluates the clinical assets held by St. George Street to determine which assets to fund for further development and has the option to fund 100% of the development of clinical assets that are initially licensed by St. George from AstraZeneca. Conduit states it plans to facilitate development of assets through Phase IIb trials in an efficient manner by using CROs and third-party service providers.

“Conduit’s model positions it as a trailblazer in the industry – providing a platform to move deprioritized assets forward by way of a lean and focused pathway,” said Conduit Board of Directors Chair Dr. Freda Lewis-Hall, who is a former chief medical officer of Pfizer.

Path to Public Market

Conduit and Murphy Cayon first announced their merger plans in November of last year.

“After evaluating dozens of companies, the Conduit team really impressed us both with their creative development approach and their asset pipeline,” Murphy Canyon CEO and Director Jack Heilbron said at the time and added that Conduit’s assets and pipeline address a wide range of indications “in important markets, full of opportunity.”

The merger with Conduit was a departure from Murphey Canyon’s initial plans for the SPAC. In February of last year, the company raised $115 million in an IPO stating at the time its focus would be on companies in the real estate industry.

In January of this year, Murphy Canyon held a vote asking for an extension on the merger proposal that was announced in November. Cash proceeds for the deal at that time were expected to be approximately $136 million held in Murphy’s trust account. However, more than 11 million shares were redeemed at the extension vote, cutting almost 64% of the trust, leaving the SPAC with roughly $49 million heading into the merger vote. An additional 2.1 million shares were redeemed after the vote, which could have halved the remaining cash in trust, but a $20 million PIPE added to the deal last week ahead of the merger offset the last round of redemptions.

In accordance with the transaction deal combining the two companies, existing Conduit shareholders own 90% of CDT common stock. After paying Murphy Canyon stockholder redemptions, Conduit will have approximately $20 million from the deal.

Shares of CDT have dropped significantly since the Sept. 25 debut, from a $12.58 high to as low as $6.08 per share, with occasional bounces up above $7.50.

Conduit Pharmaceuticals, Inc.

Founded: 2021
CEO: Dave Tapolczay
Headquarters: San Diego
Business:
Stock: CDT (NASDAQ)
Revenue: Pre-revenue
Employees: 10
Website: www.conduitpharma.com
Notable: CEO Dave Tapolczay’s past roles include head of chemistry for Zeneca agrochemicals, vice president of Glaxo Smith Kline Pharmaceuticals and senior vice president of Millennium Pharmaceuticals which, at the time, was the third largest biotech in the world.