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Lpath Inc. to Merge With Texas-Based Apollo Endosurgery

San Diego drug developer Lpath Inc. is calling it quits, and merging with Austin, Texas-based Apollo Endosurgery.

Apollo’s security holders are expected to own about 96 percent of the combined company, and Lpath security holders will own about 4 percent.

“Following an extensive and thorough review of strategic alternatives, we have chosen to merge with Apollo because we believe the transaction provides Lpath stockholders with an attractive opportunity for value appreciation,” said Gary Atkinson, Lpath’s CEO, in a statement.

The merger agreement contains certain termination rights for both Lpath and Apollo.

When the merger closes, Apollo’s major investors plan to invest about $29 million in the combined company, the release said.

Lpath suffered a major clinical trial failure in 2015 with its experimental eye drug iSONEP, which was being developed to treat wet age-related macular degeneration. The drug did not show a statistically significant improvement in visual clarity in patients.

The company suffered a similar blow earlier in the year, when its kidney cancer drug failed a midstage trial.

Lpath announced layoffs and cost-cutting measures last summer, and a company spokesperson at the time said Lpath was working hard to reprioritize and focus on programs that will bring the most value.

Lpath currently employs seven people in San Diego. Lpath’s spokesperson could not confirm that the San Diego office would close, but noted that the CEO said it was “likely.”

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