Transcept takes over Novacea in all-stock deal

US drugmaker Novacea plans to merge with privately-held Transcept Pharmaceuticals in an all-stock transaction to form a company with an estimated cash balance of $88.0 million to $92.0 million, enough to fund the development of Transcept's late-stage insomnia drug candidate Intermezzo (zolpidem tartrate sublingual lozenge).

Under the terms of the agreement, Novacea will issue new shares of its common stock to Transcept stockholders based on an exchange ratio to be determined prior to the closing, that will see stockholders in the unlisted company own 60% of the combined firm, and Novacea investors with 40%.