Poolbeg Pharma to merge with Austrian biotech company

Shares in Poolbeg, whose chairman is Irishman Cathal Friel, fell 40% on announcement of the deal, including 'all-share acquisition' by Hookipa

Shares in Poolbeg Pharma fell nearly 40% following the announcement on Thursday morning.

Austrian-based biotech company Hookipa has announced that it has entered into non-binding discussions to merge with biopharmaceutical firm Poolbeg Pharma, which is led by Irishman Cathal Friel.

Poolbeg Pharma is listed on the London Stock Exchange. Shares in the company plunged 40% following the announcement on Thursday morning. Despite being an Austrian-based firm, Hookipa is listed on the Nasdaq in the US.

In a joint statement, the company said the deal will be for an “all-share acquisition” of Poolbeg by Hookipa “to create a strong clinical-stage biopharmaceutical company focused on developing and commercialising innovative medicines for critical unmet medical needs”.

The boards believe that the potential combination would create a Nasdaq-listed combined group operated by a combined management team experienced in successfully developing and commercialising medicines with a focus on execution and operational excellence.

Under the terms of the deal, Poolbeg shareholders prior to the completion of the deal are expected to receive, on a fully-diluted basis, approximately 55% of the equity in the combined group and Hookipa shareholders are expected to hold approximately 45% of the equity.

Poolbeg chairman Cathal Friel is expected to become executive chairman of the new company. 

Mr Friel, originally from Donegal, is expected to become executive chairman of this new company. He currently serves as the chairman of Poolbeg.

Over the years, Mr Friel has orchestrated a number of deals in the pharmaceutical sector including the initial public offering of pharma services company Open Orphan. The company would go on to acquire lab services firm Hvivo and rename itself Hvivo Group.

Poolbeg was spun out as a standalone company by Hvivo in 2021.