Revolution Medicines, a clinical-stage oncology company, has announced its plans to acquire biopharmaceutical company EQRx in an all-stock deal. This strategic move is projected to contribute over $1 billion to Revolution Medicines' balance sheet.
The definitive agreement to acquire EQRx has been signed, with the exact number of shares to be issued to be determined closer to the shareholder vote on the deal. This calculation will be based on an exchange-ratio formula that includes approximately 7.7 million Revolution shares and additional shares equivalent to $870 million, divided by a price that represents a 6% discount to Revolution's five-day weighted average share price leading up to the vote.
More than 40% of EQRx's voting shares have already committed their support for the takeover, ensuring a smooth transition. The transaction is anticipated to be finalized by November.
Earlier this year, EQRx revealed plans to realign its business strategy, focusing on a streamlined organization dedicated to a pipeline of therapies while reducing cash burn. With $1.3 billion in cash, cash equivalents, and short-term investments, EQRx has taken significant steps towards achieving this goal. In the first quarter of this year, however, the company recorded a loss of $82.6 million.
As news of the acquisition broke, trading in EQRx's shares was suspended during premarket activity. Meanwhile, Revolution Medicines' stock experienced a slight dip of 0.7% after closing at $26.25 on Monday.
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