Situation Assessment

• Pipeline Therapeutics is a privately held biotechnology Company focused on restoring the function of CNS disorders through remyelination. Pipeline’s lead asset is a preclinical remyelination therapy for Multiple Sclerosis
• Sirocco Therapeutics is a privately held biotechnology company developing assets to treat hearing losses and related disorders. Sirocco’s lead asset is an IND-ready therapy for hearing loss
• Both companies are portfolio companies of Versant Ventures
• Both companies expressed an interest in merging in order to build a complete portfolio centered around neuro-regeneration
• Pipeline selected Locust Walk as its exclusive valuation, deal negotiation, and strategic advisor
• Locust Walk developed a detailed valuation of both companies, which it leveraged in an arms-length negotiation with Sirocco to determine merger terms

Key Activities

• Worked with senior management team to define goalposts for deal terms that align with company goals and could ensure deal success
• Developed in-depth comparable deals analysis and binomial option analysis to fairly value both companies and guide term negotiations
• Conducted thorough diligence, built DCF valuation model and negotiated model inputs with Sirocco’s advisor to come to agreement on relative value of both companies
• Locust Walk provided guidance on the fairness of the transaction and the relative value to Pipeline’s Board of Directors
• Assisted the management team during negotiations with Sirocco’s advisor

Successful Outcome

• Pipeline and Sirocco successfully completed the merger on friendly terms with an agreed upon deal split
• Locust Walk successfully negotiated the terms of the merger within four weeks