In another sign that deal activity is also picking up in the RNAi Therapeutics space, Silence Therapeutics announced this morning that trading has been suspended awaiting the outcome of M&A talks with a private US investor group. It is not the first time that rumors around Silence Therapeutics have had a major influence on the trading of the stock. This time, however, there appears to be a factual basis for the rumors and if the deal materialized it would qualify as a reverse takeover according to the company.
It will be interesting to see whether the deal was negotiated from a position of strength or weakness, and whether there will be a change of scientific direction or IP strategy of Silence Therapeutics, one of the older players in the field. Clearly, their position should have been hampered due to their unfavorable cash and uncertain IP positions. A reverse takeover may thus allow the rumored private investor group from the US to access the public equity markets through Silence Therapeutics and at the same time re-capitalize the company. This may also mean that AtuRNAi will be replaced by another biotechnology as the company’s scientific foundation.
On the other hand, events over the last year may have given Silence Therapeutics investors increased confidence in their freedom-to-operate, and given that the phase I trial for solid cancers has just commenced, they may not want to give up their technology hopes just yet. The US investor group may thus gain access to Silence Therapeutics’ scientific and IP portfolio, although the money they would infuse into the company would mean that they are now the majority owners. A third scenario may be that the US investor group brings with it a complementary RNA Therapeutics asset, be it another set of RNAi triggers, targets (e.g. microRNAs) or delivery technology.
In any case, I am very curious to hear about the news as it should provide for some tantalizing insight into some of the dynamics moving the RNAi Therapeutics financial market. Tomorrow, at the latest, we should know more as the company was to announce its half-year report then.
Note added in proof (9/30/09): at the end of June 2009, Silence's cash position stood at ~US$5M.