Bard1 makes Sienna an offer it can't refuse: a $45m merger

Cancer diagnostics companies Sienna (ASX:SDX) and Bard1 (ASX:BD1) are merging in a deal that will create a $45m company, and one of the few listed diagnostics companies on the ASX.

The deal, which sees Bard1 buying Sienna, has put a rocket under the latter’s shares which opened 107 per cent higher on Thursday morning at 5.6c.

Andrew Chapman of Merchant Group, a major shareholder in both companies, says the merger will create a company with a $13.7m warchest and cost savings of at least $1m a year.

“It’s a great time to do a deal like this,” he said, as companies across the ASX struggle for money and are looking for ways to save cash.

The two companies will use that cash to look for other companies to buy or to licence new medical technologies.

The list of cancer diagnostics companies on the ASX is very small, including Genetic Technologies (ASX:GTG) with its breast cancer gene risk test and Imagion (ASX:IMX) also with a breast cancer test, and Rhythm Biosciences (ASX:RHY) which is designing a colon cancer diagnostic blood test.

Merchant is also a major shareholder in Rhythm.

Big deal

The particulars of the deal are that Bard1 is offering 13 of its own shares for every five Sienna shares held. It values the latter at 6c a share or $23.7m.

Sienna closed Wednesday with a market cap of $10.7m.

The merged company will bring together a development pipeline of diagnostic tests in pancreatic, ovarian, and breast cancers, Sienna’s bladder cancer hTERT diagnostic test which is already available in the market, Bard1’s tumour marker technology, and Sienna’s molecular net technology for liquid biopsies.

“There is very strong logic for this merger. The combined group will have a deep pipeline of cancer diagnostic tests and an established market channel for commercialising them, providing a strong foundation for future success,” said Sienna chairman Dr Geoff Cumming.

The Sienna board is recommending the deal.

In other news:

Rhythm says it is seeing major delays in collecting blood samples for analytical tests and in signing new hospitals up for clinical trials “as a direct result of government enforced measures, namely the remote working of staff at blood biobanks and the restrictions to pathology collection services for recruitment, processing and provision of cancerous and healthy blood samples… exacerbated by the government suspension of non-urgent or nonemergency surgical procedures.”

This is delaying its submissions for Australian and Europe regulatory approvals.

Pharmaceuticals maker IDT (ASX:IDT) has been asked to help with “certain COVID‐ 19 response activities”, but it won’t say which ones.