Macrocure, Ltd. (NASDAQ:MCUR) Still Surging One Month After Merger With Leap Therapeutics

Shares of Macrocure, Ltd. (NASDAQ:MCUR) are still advancing significantly one month out from merger with Leap Therapeutics.

Shares of Macrocure Ltd. MCUR shot up 66.1% after the company announced that it has signed a definitive merger agreement with privately held company, Leap Therapeutics, Inc.

After the completion of the deal, Leap Therapeutics will become a publicly traded company, with Macrocure operating as its wholly owned subsidiary. Leap Therapeutics will apply to have the combined company’s common shares listed on the NASDAQ.

As per the terms of the agreement, Macrocure’s shareholders will exchange their shares for newly issued shares of Leap Therapeutics. In addition, some of Leap Therapeutics’ current investors have agreed to invest an extra $10 million at the closing of the deal. Upon the closing of the transaction, Macrocure shareholders will collectively own approximately 31.8% of the combined entity, while Leap Therapeutics equity holders will own approximately 68.2%.

The combined entity is expected to have a minimum of $30 million in cash to finance future operations. Leap Therapeutics’ current shareholders will enjoy the right to a royalty, under certain circumstances, based on future sales.

The strategic merger agreement with Leap Therapeutics will provide significant potential for Macrocure. It will get access to Leap Therapeutics’ pipeline candidates – DKN-01 and TRX518 – that are designed to provide new and valuable treatment options for patients suffering from aggressive cancers.

On the other hand, Leap Therapeutics will obtain sufficient capital to develop its pipeline candidates. The company expects to achieve substantial clinical milestones during 2016 and 2017. It also expects to initiate randomized studies on its lead candidate, DKN-01, and report data from a repeat-dose study on TRX518.

We note that DKN-01 is currently being evaluated for esophageal cancer and cholangiocarcinoma. The candidate demonstrated clinical activity, as monotherapy, in patients with non-small cell lung cancer and, in combination with paclitaxel, in patients with esophageal cancer. Meanwhile, additional data from a study on DKN-01, being evaluated in combination with Eli Lilly and Company’s LLY Gemzar (gemcitabine) and cisplatin, in patients with cholangiocarcinoma, will be presented at an annual meeting in Oct 2016.

Macrocure currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Anika Therapeutics Inc. ANIK and ANI Pharmaceuticals, Inc. ANIP. Both the stocks sport a Zacks Rank #1 (Strong Buy).

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Shares of Macrocure, Ltd. (NASDAQ:MCUR) are actively moving +29.37% thus far today on the news and have traded in the range of $1.44 – 2.43 during the session.  A number of research firms have recently weighed in on the stock, providing future price targets. The covering firms currently have a consensus one-year price target of $1.50 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  This is the average number from the individual targets provided by the firms.  Analysts are projecting earnings per share of $0.00 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.32 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading +21.74% away from its 50-day moving average of $1.52.  Based on the most recent available data, the equity is -56.57% off of its 52-week high of $4.26 and +146.67% away from its 52-week low which is $0.75.

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Today, the stock opened at $1.47 and the last bid at the time of writing stood at $1.85.  During the session thus far, the equity dipped down to $1.44 and touched $2.43 as the high point.  Macrocure, Ltd. (NASDAQ:MCUR) has a market cap of $32.76M and has seen an average daily volume of 441660 over the past three months.

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