Activist investor answers call for Jounce's cash

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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