Biotech companies in $24m merger

South Perth-based BARD1 Life Sciences is forming a new cancer diagnostic business with a fellow listed medtech company in Victoria.

BARD1 says the combined group will focus on delivering innovative cancer diagnostics to address unmet needs in early cancer detection.

It has entered into a merger implementation agreement with Sienna Cancer Diagnostics, under which the Perth company will acquire all of Sienna’s shares for $23.7 million.

Sienna shareholders will receive 13 BARD1 shares for every five Sienna shares, valuing the Melbourne-based company’s shares at 6 cents.

Sienna’s trading price surged 100 per cent on the ASX today to trade at 5.4 cents at 12:40pm AEST.

BARD1 shares were also up on the deal, trading 8 per cent higher at 2.7 cents per share.

Chairman Peter Gunzburg said the merger would create a larger Australian medical technology company with marketed products, a strong cancer diagnostics pipeline and early revenues.

The combined entity is expected to have cash reserves of around $13.7 million.

BARD1 disclosed in its interim financial report it had $8.7 million in cash, as at December 31, supported by a $7.5 million capital raising last July.

BARD1 says the merger will also create an extended portfolio of in-market and pipeline cancer diagnostic products to enable early-stage testing for a range of cancers, including ovarian and breast.

The company is being advised by Kidder Williams as financial adviser and MinterEllison as legal adviser to the transaction.

Sienna's shareholder meeting to approve the scheme is expected to be held in July.

Sienna says the combined group will create significant savings by eliminating duplicate resources and generate further opportunities for growth.

The board has unanimously recommended shareholders vote in favour of the offer.