All of DermTech's outstanding capital stock will be converted into 16 million shares of newly issued Constellation common stock.

Constellation Alpha Capital Corp. is merging with DermTech, Inc., a molecular genomics company with an initial focus on skin cancer.

"DermTech has developed a deep pipeline of dermatology-focused diagnostic tests with superior clinical sensitivity, improved patient comfort due to non-invasive sample collection and meaningful cost savings for payors.  We are excited to bring this potential opportunity to our shareholders," says Mr. Rajiv Sarman Shukla, Chairman and Chief Executive Officer of Constellation, in a news release. "DermTech has developed a deep pipeline of dermatology-focused diagnostic tests with superior clinical sensitivity, improved patient comfort due to non-invasive sample collection and meaningful cost savings for payors.  We are excited to bring this potential opportunity to our shareholders." 

Dr. John Dobak, Chief Executive Officer of DermTech, adds: "We look forward to completing this transaction, which will allow us to scale up commercialization of our skin cancer products, support the development of new products and expand our collaborations with pharmaceutical partners. DermTech has developed a unique diagnostic platform addressing large commercial opportunities, based on a foundation of science, clinical evidence and physician and patient value.  This transaction provides us an opportunity to utilize and build upon our platform."

Under the terms of the transaction, Constellation will domesticate its jurisdiction of incorporation from the British Virgin Islands to the State of Delaware and DermTech will merge with a wholly-owned subsidiary of Constellation. All of DermTech's outstanding capital stock will be converted into 16 million shares of newly issued Constellation common stock, less the number of shares of Constellation common stock that can be acquired or received pursuant to certain DermTech equity awards.  In addition, Constellation has entered into subscription agreements with new health care focused institutional investors as well as certain existing investors in DermTech to sell approximately 6.2 million shares of its common stock at a purchase price of $3.25 per share for an aggregate of $20 million in a private placement that will close in connection with the closing of the transaction.  It is anticipated that DermTech shareholders will own approximately 63.7 percent of the combined company's shares and the private placement investors will own approximately 24.5 percent of the combined company's shares following the consummation of the merger, but final ownership percentages will depend on the amount of redemptions by Constellation shareholders. 

The definitive agreement contains a minimum cash closing condition of $15 million, which Constellation expects to satisfy with proceeds from the private placement described above.  The merger agreement further provides that the closing of the transaction is subject to approval by Constellation's shareholders and the satisfaction of other closing conditions.  The transaction is expected to close in the third quarter of 2019.  Shares of Constellation common stock may be redeemed by public stockholders for a price of approximately $10.45 upon consummation of the transaction.  Cowen and Company, LLC is acting as financial and capital markets advisor to Constellation.  Greenberg Traurig, LLP is acting as legal counsel to Constellation.  Mintz is acting as legal counsel to DermTech.