Tekmira Pharmaceuticals, based in Vancouver, a developer of RNA interference (RNAi) therapeutics, and OnCore Biopharma, a Doylestown, Pa.-based biopharmaceutical company dedicated to discovering, developing and commercializing an all-oral cure for patients suffering from chronic hepatitis B virus (HBV) infection, have agreed to merge to create a new global HBV company focused on developing a curative regimen for hepatitis B patients by combining multiple therapeutic approaches.

This transaction is expected to bring together the companies' broad experience in antiviral drug development, Tekmira's phase I-ready HBV RNAi therapeutic and OnCore's multiple HBV programs, to build a robust portfolio of compounds aimed at eradicating HBV.

The combined company's most advanced products are expected to be TKM-HBV, an RNAi therapeutic designed to eliminate HBV surface antigen (HBsAg) expression, a key component of host immune suppression, which is on track to begin human clinical trials in the first quarter of 2015; and OCB-030, a second-generation cyclophilin inhibitor focused on the suppression of viral replication, as well as stimulation and reactivation of the body's immune response, which is anticipated to enter human clinical trials in the second half of 2015. The combined company anticipates progressing additional programs toward the clinic to achieve the goal of expeditiously evaluating combination regimens.

The combined pipeline is expected to target the three pillars necessary to develop a curative regimen for HBV, including assets focused on suppressing HBV replication, reactivating and stimulating the host immune response directed at HBV and eliminating covalently closed circular DNA (cccDNA). The parties believe that, together, these three pillars are the foundation for achieving a curative regimen.

Dr. Mark J. Murray, CEO of Tekmira, said, "Our new company has the potential to advance multiple, highly active, complementary agents into the clinic in rapid succession, and create an HBV therapeutics powerhouse, thereby potentially offering significant benefits to the global medical community working to improve the lives of HBV patients."

Patrick Higgins, CEO of OnCore, said, "Tekmira and OnCore share a vision that effective combination regimens will ultimately cure HBV, a goal now being realized for hepatitis C virus. This merger is expected to bring together the promise of TKM-HBV with our existing HBV portfolio and accelerate our timeline for combination clinical trials. It is expected to deliver both near-term catalysts and long-term value creation. We believe that the ability to rapidly and sequentially combine novel HBV therapeutics is extremely valuable. We intend to utilize our collective expertise in liver disease and a focused development program, as we did at Pharmasset, to expeditiously and efficiently meet our shared goals."

"We intend to take a focused, iterative approach to identifying the most effective combination regimens, while applying what we learn at each stage to optimize future compounds and combinations," said Dr. Michael Sofia, the combined company's chief scientific officer and an inventor of sofosbuvir (Sovaldi) for the treatment of hepatitis C. "We believe that the ability to combine multiple unique programs housed in the same company is a significant competitive advantage, and should provide considerable efficiency in terms of speed and ease of decision-making. Combining the OnCore and Tekmira HBV portfolios underpins our vision to accelerate the delivery of a curative HBV regimen."

OnCore will merge with a wholly-owned subsidiary of Tekmira and thereby become a wholly-owned subsidiary of Tekmira. Stockholders of OnCore will hold approximately 50% of the total number of outstanding shares of capital stock of Tekmira. The implied market value of the combined company, based on the closing price of Tekmira common shares on the NASDAQ Global Market on Jan. 9, is approximately $750 million.

The transaction is expected to close in the first half of 2015.

The combined company plans to retain top executives and board members from Tekmira and OnCore. The new company's management team will include Mark J. Murray, Ph.D., CEO; Patrick T. Higgins, president and chief operating officer; Bruce Cousins, chief financial officer; Michael J. Sofia, Ph.D., chief scientific officer; Mark Kowalski, M.D., Ph.D., chief medical officer; Bryce Roberts, chief legal officer; Michael J. McElhaugh, chief business officer; and Michael J. Abrams, Ph.D., chief discovery officer.

William T. Symonds, PharmD, who led the clinical development of sofosbuvir for the treatment of HCV infection at Pharmasset and later Gilead Sciences, will be chief development officer and lead the clinical development of the portfolio.

Vivek Ramaswamy will be chairman of the combined company; Dr. Daniel Kisner, M.D., will be its vice-chairman. The combined company will be headquartered in Vancouver, BC.