Not all of Jounce's shareholders were delighted with the reverse merger that the US biotech announced with the UK developer Redx last month. The deal’s attraction for Redx was clear: the US biotech's substantial $130m cash pile, a Nasdaq listing plus 63% of the new entity. Jounce's investors were offered a CVR that promised to pay 80% of any legacy asset sale proceeds, but their cash would effectively be transferred to a bet on Redx’s early-stage pipeline; a setback with one of the group’s lead programmes last week showed this work to be far from a dead cert. As such, today’s unsolicited bid by the activist investor Tang Capital will probably find wide support; calls for floundering biotechs to return cash to shareholders are growing louder as dire financing conditions persist. Tang, which has amassed a 10% stake in Jounce, is offering $1.80 per share in cash and has matched Redx’s CVR offer; Jounce’s cash is worth about $2.5 per share. This signals a win for Tang and kind of a win for Jounce shareholders – the stock was at $7 a year ago. Pity Redx, which once again sees opportunity slip through its fingers, towards US shores.
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