Health Solutions Company Announces Merger Agreement With Therapeutics Firm
ReShape Lifesciences® Enters Into Merger Agreement With Vyome Therapeutics and Asset Purchase Agreement With Biorad Medisys.
Disclaimer: The following article provides a detailed overview of the merger agreement between ReShape Lifesciences® and Vyome Therapeutics, as well as the asset purchase agreement with Biorad Medisys. It is intended for informational purposes only and should not be construed as financial or investment advice.
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On July 10, 2024, ReShape Lifesciences® (Nasdaq: RSLS), a company in weight loss and metabolic health solutions, announced its entry into a definitive merger agreement with Vyome Therapeutics, Inc., a private clinical-stage company focused on immuno-inflammatory and rare diseases. This merger pinpoints a success for both companies as they aim to leverage their combined strengths to advance medical innovations and expand their reach. Simultaneously, ReShape entered into an asset purchase agreement with Biorad Medisys Pvt. Ltd., which includes the sale of key assets related to ReShape’s weight loss systems. These moves are poised to reshape the landscape of metabolic and immuno-inflammatory health solutions, bridging innovation corridors between India and the United States.
Approval and Ownership Structure
The merger between ReShape Lifesciences® and Vyome Therapeutics brings together two companies with complementary expertise and goals. Under the terms of the merger, ReShape and Vyome will combine in an all-stock transaction. This implies that Vyome's shareholders will receive shares of ReShape's stock in exchange for their existing Vyome shares. The boards of directors of both companies have unanimously approved the merger agreement. Upon the closure of the merger, existing ReShape stockholders will hold approximately 11.1% of the combined company, subject to adjustments based on ReShape’s net cash at closing relative to a target amount of $5 million. The combined company will be renamed Vyome Holdings, Inc. and is expected to trade under the Nasdaq ticker symbol “HIND,” symbolizing the alignment with the U.S.-India innovation corridor.
The board of directors of the newly formed entity will comprise six directors appointed by Vyome and one director designated by ReShape. The executive management team will include Vyome's current executive officers, ensuring continuity and leveraging their expertise in immuno-inflammatory and rare diseases.
In conjunction with the merger, ReShape has entered into an asset purchase agreement with Biorad Medisys Pvt. Ltd. ReShape will sell substantially all of its assets, including the Lap-Band® System, Obalon® Gastric Balloon System, and the Diabetes Bloc-Stim Neuromodulation™ (DBSN™) System, to Biorad. However, this excludes ReShape's cash holdings. Biorad will assume nearly all of ReShape's liabilities, with the purchase price set at $5.16 million in cash, adjustable based on ReShape's accounts receivable and payable at closing compared to those amounts as of March 31, 2024.
The cash received from the asset purchase will contribute to ReShape’s net cash position, which plays a crucial role in determining the ownership distribution between ReShape and Vyome stockholders post-merger. This divestiture allows ReShape to focus on its core competencies while enabling Biorad to expand its portfolio in the metabolic health domain.
Investor Agreements and Capital Commitments
In line with these transactions, ReShape, Vyome, and Vyome’s wholly-owned subsidiary, Vyome Therapeutics Ltd., have secured commitments from certain accredited investors. These investors have committed to purchasing a minimum of $7.3 million in securities of ReShape, Vyome, and Vyome’s subsidiary. Under these agreements, certain accredited investors have agreed to purchase up to $5.8 million in shares of the combined company's common stock immediately following the merger completion. This commitment may be further increased through additional investments, providing a robust financial foundation for the merged entity as it embarks on its new journey.
The combination of ReShape and Vyome aims to create a powerful entity dedicated to advancing immuno-inflammatory health solutions. Vyome's pipeline of clinical-stage assets, combined with ReShape's market experience, will enable the development and commercialization of innovative therapies targeting unmet medical needs. The merger reveals the importance of leveraging the innovation corridors between India and the United States. By capitalizing on India's world-class scientific research capabilities and the U.S.’s strong market infrastructure, the combined company is well-positioned to accelerate the development of its therapeutic assets and bring them to market efficiently.
Through the asset purchase agreement with Biorad Medisys, ReShape can streamline its focus on developing cutting-edge metabolic health solutions without the burden of managing a broad portfolio of weight loss systems. This divestiture allows the company to allocate resources more effectively and pursue growth opportunities in its core areas of expertise. The leadership structure of the combined entity, with Vyome’s executives at the helm and a board predominantly composed of Vyome appointees, ensures that the company will benefit from experienced guidance as it navigates its new direction. This governance model is expected to drive the successful integration of the two companies and the realization of their shared vision.
The merger between ReShape Lifesciences® and Vyome Therapeutics, along with the asset purchase agreement with Biorad Medisys, represents a transformative moment for all parties involved. By combining their strengths and focusing on core competencies, the newly formed Vyome Holdings, Inc. is positioned to become a leading player in the fields of metabolic and immuno-inflammatory health solutions.
These decisions highlight the importance of global collaboration and innovation in addressing complex health challenges. As the combined company moves forward, it will continue to leverage the unique strengths of the U.S. and Indian markets to bring advanced therapies to patients in need.
Disclaimer: This article is intended for informational purposes only and does not constitute financial or investment advice. Readers should seek professional guidance before making any investment decisions.
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