Opgen and Curetis show that misery loves company
The molecular diagnostics group Opgen made a fairly dismal debut on the Nasdaq back in 2015, and has performed horribly since; its shares have lost 99.8% of their value since the IPO, and have gone through two major reverse stock splits. The Netherlands' Curetis, another diagnostics specialist, also floated in 2015, and has seen its share price drop a mere 93%. So today’s combination of these groups, neither of which is profitable, will have to work wonders to reverse these declines. The deal is structured as an all-share takeout of Curetis by Opgen: the US company will pay with 2.7 million new shares, and current holders will retain only a 27.5% ownership of the combined business. Opgen's stock is up 80% today, valuing Curetis at $32m, and the combined business at $44m. On a conference call today both management teams outlined plans to wring synergies from their combined operations – for example, the new group is to have 130 employees, whereas the two companies had a total of 166 at the end of 2018. The closing of the transaction is contingent on an interim equity financing, so this morning's share price surge is surprising.