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CERo is an innovative immunotherapy company seeking to advance the next generation of engineered T cell therapeutics that employ phagocytic mechanisms. Its lead product candidate is expected to enter clinical trials in 2024.
Anticipated cash resources will fund the advancement of CERo’s lead product candidate, CER-1236 to early clinical data in hematological oncology
The transaction reflects a pre-money equity value of $50 million for CERo, pro forma equity capitalization of $145 million and is expected to provide up to $13.7 million held in trust, assuming no redemptions by current Phoenix stockholders and no additional capital raised
Business combination expected to be completed in the second half of 2023, with the combined company to be listed on Nasdaq under the ticker “CERO”
CERo Therapeutics, Inc. (“CERo”), an innovative immunotherapy company seeking to advance the next generation of engineered T cell therapeutics that employ phagocytic mechanisms, and Phoenix Biotech Acquisition Corp. (NASDAQ:PBAX) (“PBAX”), a special purpose acquisition company formed for the purpose of acquiring or merging with one or more businesses, today announced they have entered into a definitive business combination agreement.
Upon closing of the transaction, anticipated to occur in the second half of 2023, the combined company will be named CERo Therapeutics Holdings, Inc. and will be led by CERo and PBAX’s founding members, including Daniel Corey, M.D., CERo’s CEO, Chris Ehrlich, PBAX’s CEO, and Brian G. Atwood, the Chairman of PBAX.
The combined company’s common stock is expected to be listed on the Nasdaq Capital Market under the ticker symbol “CERO.” Mr. Atwood will serve as Chief Executive Officer of the combined company, Mr. Ehrlich will serve as its Chief Financial Officer and Chief Operating Officer and Dr. Corey will serve as its Chief Technology Officer.
“CERo technology is an exciting step forward in cancer cell therapy and I’ve been following the significant progress the company has made since its first round of institutional funding in 2019” Tweet this
“We are thrilled to join forces with PBAX ,” said Daniel Corey, CEO of CERo. “With CERo technology we see an opportunity to engage the body’s full immune repertoire for optimized cellular immunotherapy. Chris and Brian bring a wealth of experience to the CERo team during this important time as we look to test the first CER T cell therapeutic candidate in the clinic.”
“After an exhaustive search for the right target for PBAX, we are thrilled to merge with CERo. The talented founding team has done a tremendous job of creating value in a timely and capital efficient manner and we look forward to working together with them to advance their promising technology to the next level,” stated Chris Ehrlich, CEO and director of PBAX.
“CERo technology is an exciting step forward in cancer cell therapy and I’ve been following the significant progress the company has made since its first round of institutional funding in 2019,” said Brian G. Atwood, Chairman of PBAX. “I’m excited to join Daniel Corey and his team to lead the company’s first therapy, CER-1236, into clinical trials beginning in lymphoma and leukemia, and shortly afterward solid tumors.”
CERo Therapeutics is pioneering a new and powerful class of cell-based therapies that combine the innate and adaptive arms of the immune system into single T cells, effectively creating cells that both phagocytose (“eat”) and lyse (“explode”) targeted cancer cells. This technology drives a more comprehensive and durable anti-tumor response, and demonstrated this in the company’s experiments. Since its Series A financing in 2019, the company has repeatedly demonstrated the ability to destroy cancer cells and tumors across several experimental models of liquid and solid tumors, in both in vivo and in vitro experiments. The company plans to file its first IND in 2024.
The resources of the combined company are expected to provide CERo with the capital to advance CER-1236, its lead product candidate, into clinical trials for hematologic malignancies and expand the clinical development of CER-1236 into other difficult to treat cancers, including solid tumors.
Key Transaction Terms
Upon the closing of the business combination, and assuming no redemptions of shares of PBAX by its public stockholders, CERo would expect to receive up to $13.7 million of cash held in trust. The business combination reflects a pre-money equity value of $50 million for CERo and a pro forma capitalization of the combined company of $145 million. The business combination is subject to a minimum cash condition of $30 million, net of transaction expenses, which is expected to be funded through proceeds of the trust account and additional financing, including investments from existing stockholders of CERo. The parties intend to seek to secure such additional financing through a private placement.
The boards of directors of both CERo and PBAX have unanimously approved the proposed transaction with expected completion in the second half of 2023. The closing of the transaction is subject to approval of PBAX shareholders and the satisfaction, or waiver of, the minimum cash condition and certain other customary closing conditions.
Additional information about the transaction will be provided in a Current Report on Form 8-K to be filed by PBAX with the Securities and Exchange Commission (“SEC”) and will be available on the SEC’s website at www.sec.gov. In addition, PBAX intends to file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus, and will file other documents regarding the proposed transaction with the SEC.
Advisors
Cooley LLP and Ellenoff Grossman & Schole LLP are acting as legal counsel to CERo. Cohen and Company Capital Markets, a Division of J.V.B. Financial Group, LLC is acting as the financial advisor and lead placement agent to PBAX. Goodwin Procter LLP is serving as legal counsel to PBAX.
About CERo Therapeutics, Inc.
CERo is an innovative immunotherapy company advancing the development of next generation engineered T cell therapeutics for the treatment of cancer. Its proprietary approach to T cell engineering, which enables it to integrate certain desirable characteristics of both innate and adaptive immunity into a single therapeutic construct, is designed to engage the body’s full immune repertoire to achieve optimized cancer therapy. This novel cellular immunotherapy platform is expected to redirect patient-derived T cells to eliminate tumors by building in engulfment pathways that employ phagocytic mechanisms to destroy cancer cells, creating what CERo refers to as Chimeric Engulfment Receptor T cells (“CER-T”). CERo believes the differentiated activity of CER-T cells will afford them greater therapeutic application than currently approved chimeric antigen receptor (“CAR-T”) cell therapy, as the use of CER-T may potentially span both hematological malignancies and solid tumors. CERo anticipates initiating clinical trials for its lead product candidate, CER-1236, in 2024 for hematological malignancies.
About Phoenix Biotech Acquisition Corp.
Phoenix Biotech Acquisition Corp. (NASDAQ: PBAX) is a blank-check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. For more information about PBAX, visit www.phoenixbiotechacquisitioncorp.com.
Additional Information about the Business Combination and Where to Find It
This press release relates to the proposed business combination by and between PBAX, CERo and PBCE Merger Sub, Inc., a wholly-owned subsidiary of PBAX (“Merger Sub”). In connection with the proposed business combination, PBAX intends to file with the Securities and Exchange Commission (SEC) a Registration Statement on Form S-4 (“Registration Statement”), which will include a preliminary proxy statement and a preliminary prospectus relating to the shares of PBAX common stock to be issued in connection with the proposed business combination. This press release is not a substitute for the Registration Statement, the definitive proxy statement/final prospectus or any other document that PBAX has filed or will file with the SEC or send to its stockholders in connection with the proposed business combination. This document does not contain all the information that should be considered concerning the proposed business combination and is not intended to form the basis for any investment decision or any other decision in respect of the proposed business combination.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, PBAX’S STOCKHOLDERS AND OTHER INTERESTED PARTIES ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY AMENDMENTS THERETO AND ANY OTHER DOCUMENTS FILED BY PBAX WITH THE SEC IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION OR INCORPORATED BY REFERENCE THEREIN IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED BUSINESS COMBINATION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION AND THE PARTIES TO THE PROPOSED BUSINESS COMBINATION.
The definitive proxy statement/final prospectus will be mailed to stockholders of PBAX as of a record date to be established for voting on the proposed business combination. Additionally, PBAX will file other relevant materials with the SEC in connection with the proposed business combination. Copies of the Registration Statement, the definitive proxy statement/final prospectus and all other relevant materials for the proposed business combination filed or that will be filed with the SEC may be obtained, when available, free of charge at the SEC’s website at www.sec.gov. In addition, the documents filed by PBAX may be obtained, when available, free of charge from PBAX at www.phoenixbiotechacquisitioncorp.com. PBAX stockholders may also obtain copies of the definitive proxy statement/final prospectus, when available, without charge, by directing a request to PBAX’s Secretary at Phoenix Biotech Acquisition Corp., 2201 Broadway, Suite 705, Oakland, CA 94612, Attention: Secretary.
No Offer or Solicitation
This press release is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed business combination or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. The proposed business combination will be implemented solely pursuant to the Business Combination Agreement, by and between PBAX, Merger Sub and CERo, dated June 4, 2023, and filed as Exhibit 2.1 to the Current Report on Form 8-K filed by PBAX on June 5, 2023, which contains the full terms and conditions of the proposed business combination.
Participants in Solicitation
This press release may be deemed solicitation material in respect of the proposed business combination. PBAX and CERo and their respective directors and executive officers, under SEC rules, may be deemed to be participants in the solicitation of proxies from PBAX’s stockholders in connection with the proposed business combination. Investors and security holders may obtain more detailed information regarding the names and interests in the proposed business combination of PBAX’s directors and officers in PBAX’s filings with the SEC, including PBAX’s initial public offering prospectus, which was filed with the SEC on October 8, 2021 and PBAX’s subsequent annual reports on Form 10-K and quarterly reports on Form 10-Q. To the extent that holdings of PBAX’s securities by insiders have changed from the amounts reported therein, any such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to PBAX’s stockholders in connection with the business combination will be included in the proxy statement/prospectus relating to the proposed business combination when it becomes available. You may obtain free copies of these documents, when available, as described in the preceding paragraphs.
Source: CERo Therapeutics
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