BioPharmX And Timber Pharmaceuticals to Merge


BioPharmX Corporation (NYSE American: BPMX) and Timber Pharmaceuticals LLC, a privately held biopharmaceutical company focused on the development and commercialization of treatments for orphan dermatologic diseases, today announced that they have entered into a definitive merger agreement. Under the terms of the merger agreement, subject to the approval of BioPharmX's stockholders and Timber's members, a wholly-owned subsidiary of BioPharmX will be merged with and into Timber, with Timber surviving the merger as a wholly-owned subsidiary of BioPharmX. As a condition to the closing of the Merger, Timber has agreed to secure not less than $20 million of financing for the combined company. The Merger is currently expected to be completed in the second calendar quarter of 2020. Upon completion of the Merger, BioPharmX will change its name to Timber Pharmaceuticals, Inc. and the officers and directors of Timber will become the officers and directors of BioPharmX.

"We are pleased to reach a merger agreement with BioPharmX, which provides us with the opportunity once the merger is completed to have our shares traded in the public market and to expand our investor base as we strategically build our pipeline in rare dermatologic diseases that have no approved treatments," said John Koconis, chief executive officer of Timber. "This merger also expands our resources and expertise to build momentum in our development programs targeting new therapies for underserved patient populations living with some of the most serious conditions in medical dermatology."

"This transaction with Timber reflects the continued commitment of our management team and Board of Directors to deliver value to our stockholders," stated David S. Tierney, M.D., chief executive officer of BioPharmX. "Following a comprehensive strategic process led by Locust Walk, a global life sciences transaction firm, we have determined that a merger with Timber and the $20 million financing they are bringing to the transaction, will enable BioPharmX stockholders to participate in Timber's broader pipeline of drugs to treat rare and orphan dermatological diseases and is in the best interest of our stockholders."

Timber is currently advancing a late-stage clinical development pipeline in rare dermatologic diseases, comprising:

  • TMB-001, a proprietary topical formulation of isotretinoin currently being evaluated in a Phase 2b clinical trial for the treatment of moderate to severe subtypes of congenital ichthyosis (CI), a group of rare genetic keratinization disorders that lead to dry, thickened, and scaling skin. A prior Phase 1/2 study involving 19 patients with CI demonstrated safety and preliminary efficacy of TMB-001, as well as minimal systemic absorption. In 2018, the U.S. Food & Drug Administration (FDA) awarded $1.5 million to support clinical trials evaluating TMB-001 through its Orphan Products Grant program.
  • TMB-002, a proprietary topical formulation of rapamycin currently being evaluated in a Phase 2b clinical trial for the treatment of facial angiofibromas (FAs) in tuberous sclerosis complex (TSC), a multisystem genetic disorder resulting in the growth of hamartomas in multiple organs. TSC results from dysregulation in the mTOR pathway, and as a topical mTOR inhibitor, TMB-002 may address FAs in TSC without the systemic absorption of an oral agent.
  • TMB-003, a proprietary formulation of sitaxsentan, a new chemical entity in the U.S., which is a selective endothelin-A receptor antagonist currently in preclinical development as a topical or subcutaneous agent for the treatment of localized scleroderma, a rare autoimmune connective tissue disorder (CTD) that leads to inflammation and thickening of the skin.

Following the closing of the merger, the combined company will also evaluate BioPharmX's Phase 3 ready proprietary topical minocycline gel programs for a strategic partnership, co-development or other non-dilutive value creation strategy. This product has previously been studied by BioPharmX in the treatment of inflammatory lesions of acne vulgaris and papulopustular rosacea.

Under the merger agreement, following the merger, (i) the Timber members, including the investors funding the $20 million investment, will own approximately 88.5% of the outstanding common stock of BioPharmX, and (ii) the BioPharmX stockholders will own approximately 11.5% of the outstanding common stock of BioPharmX, subject to certain adjustments as more particularly set forth in the merger agreement. The merger agreement contains customary representations, warranties and covenants made by BioPharmX and Timber, including covenants relating to both parties using their best efforts to cause the transactions contemplated by the merger agreement to be satisfied, covenants regarding obtaining the requisite approvals of the BioPharmX stockholders and the Timber members, covenants regarding indemnification of directors and officers, and covenants regarding BioPharmX's and Timber's conduct of their respective businesses between the date of signing of the merger agreement and the closing of the merger. The merger agreement also contains certain termination rights for both BioPharmX and Timber, and, in connection with the termination of the merger agreement under specified circumstances, BioPharmX and Timber may be required to pay the other party a termination fee.

In connection with the merger agreement, BioPharmX and Timber also entered into a credit agreement, pursuant to which Timber has agreed to make a bridge loan to BioPharmX in an aggregate amount of $2.25 million. The bridge loan is secured by a lien on all of BioPharmX's assets. Further, in connection with the bridge loan, BioPharmX has issued a warrant to Timber to purchase approximately 2.3 million shares of BioPharmX common stock at a nominal exercise price. The bridge loan warrant is exercisable commencing on its issuance and expires 30 months thereafter.

Further, simultaneous with the execution of the merger agreement, BioPharmX entered into an agreement with certain holders of common stock purchase warrants to purchase shares of BioPharmX common stock to exchange their warrants in a transaction exempt from registration under Section 3(a)(9) of the Securities Act of 1933. In the exchange, BioPharmX will issue an aggregate of 850,000 shares of common stock to the holders of the warrrants in exchange for out-of-the money warrants to purchase approximately 2.3 million shares of BioPharmX common stock which contain language that would have allowed the holders to convert the warrants into shares of BioPharmX common stock at the time of the consummation of the merger based on the "Black Scholes Value" of the warrants at the time of the consummation of the merger.

Chardan is acting as the financial advisor to Timber in the proposed transaction and Lowenstein Sandler LLP is acting as its legal counsel. Locust Walk is acting as the financial advisor to BioPharmX in the proposed transaction and Akerman LLP is acting as its legal counsel.

About Timber Pharmaceuticals LLC

Timber Pharmaceuticals is a privately held biopharmaceutical company focused on the development and commercialization of treatments for orphan dermatologic diseases. The company's investigational therapies have proven mechanisms-of-action backed by decades of clinical experience and well-established CMC (chemistry, manufacturing and control) and safety profiles. Timber is initially focused on developing non-systemic treatments for rare dermatologic diseases including congenital ichthyosis (CI), tuberous sclerosis complex (TSC), and localized scleroderma. For more information, visit

About BioPharmX® Corporation

BioPharmX Corporation (NYSE American: BPMX) is a specialty pharmaceutical company focused on developing prescription products utilizing its proprietary HyantX Topical Delivery System for dermatology indications. To learn more about BioPharmX, visit

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