Under the terms of their merger agreement, the deal can be terminated at any time. Know what happened between Valo Health & Khosla Ventures before the merger.
Here’s what happened between Valo Health and Khosla Ventures at last minute.
Digital technology firm Valo Health and Khosla Ventures Acquisition have terminated their merger plans just a day before a scheduled shareholder vote, citing “market conditions.”
In a statement, Khosla said that the decision not to go forward was mutual. No exact reason was given except that it was based on current market conditions in the biotechnology industry. Under the terms of their merger agreement, the deal can be terminated at any time and with neither party having liability provided that mutual written consent is presented.
“We made this decision to ensure that Valo Health continues to be in an optimal position of strength to pursue our growth strategy and to deliver on our mission to transform drug discovery and development. As we move closer to launching our first Phase 2 trial this year, our second Phase 2 trial in the first half of next year, and continue to aggressively build out the additional unique capabilities of our platform, we have tremendous momentum going into 2022 and beyond,” said David Berry, the founder and chief executive of Valo.
More About Valo Health and Khosla Ventures
Valo Health has an artificial intelligence platform for drug research called the Oral Computational Platform, which can transform vast amounts of data to come up with valuable insights that can accelerate drug creation and development for various types of diseases.
Khosla Ventures Acquisition is a special purpose acquisition firm sponsored by Khosla Ventures LLC affiliates that focuses on various sectors, including artificial intelligence, robotics, health, financial services, and sustainable energy. It was founded by Sun Microsystems co-founder Vinod Khosla in 2004.
In the same press release, KVSA said it is confident of Valo Health’s strength as a company and is optimistic that it will soon find “high-impact targets” to work with. Valo has already produced several drug candidates with the potential to treat a broad range of renal, metabolic, cardiovascular, and neurodegenerative diseases, as well as cancer.
“Khosla Ventures invests in bold, early & impactful companies and believes Valo meets these criteria. By bringing powerful computational approaches and human data across the lifecycle of drug discovery and development – aiming to reduce time, cost and risk to programs - Valo offers to potentially change the value curve for a trillion-dollar market segment. Valo fits squarely into the companies we are excited to back and bring our experience to,” said Samir Kaul, the founding partner and managing director at Khosla Ventures, back in June when the parties were still optimistic about the deal.
Had the merger pushed through, Khosla would have invested some $333 million into the deal, in addition to almost $200 million in added private financing from various investors. For now, it seems that Valo Health will have to support its clinical trial initiatives on its own. The company announced cash holdings of around $250 million in June when the plan for the merger was made public.
