Normally, investors get excited when two biotech companies announce a merger. The exception is when the merger is more about desperation than transformation.

The combination of QLT (QLTI) and Aegerion Pharmaceuticals (AEGR) announced Wednesday fits that latter description. The two troubled biotech companies announced a "strategic merger" which will result in a combined company newly renamed Novelion Therapeutics.

QLT has been in a near-constant state of restructuring for several years. Assets have been sold off and two previous attempts at mergers with Auxilium Pharmaceuticals and InSite Vision were proposed but called off. QLT's market cap is $76 million and its stock price has dropped 64% over the past year.

Aegerion has struggled with slumping sales of its cholesterol-lowering drug Juxtapid and federal investigations into its marketing practices. The company's market cap is $39 million and the stock has lost 93% in the past year.

When the merger closes, Novelion will continue to market Aegerion's two approved drugs, Juxtapid and Myalept, while also developing QLT's orphan disease drug QLT091001, which is targeted at a rare form of inherited retinal disease.

Current Aegerion CEO Mary Szela will serve as Novelion's CEO.

Under terms of the merger, each Aegerion share of common stock will be exchanged for 1.0256 shares of QLT common stock. An investor syndicate has committed to purchase $22 milllon in QLT stock at a price of $1.76 per share to support the merger.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.