Incannex Healthcare Ltd (ASX:IHL, NASDAQ:IXHL) has executed a binding commercial term sheet to wholly acquire biotech company APIRx Pharmaceutical USA, LLC, subject to shareholder approval.
APIRx holds an extensive intellectual property portfolio of 19 granted patents and 23 pending, with 22 active clinical and pre-clinical research and development projects in the works.
Its therapeutic candidates are targeting a wide variety of applications, including treating pain, dementia, Parkinson’s disease, restless leg syndrome, gastrointestinal diseases, periodontitis, addiction disorders, skin conditions and ophthalmic (eye) conditions.
The proposed acquisition price for APIRx is US$93.3 million, an all scrip transaction that will see the value of the acquisition paid out in shares.
Potential to position IHL as sector leader
“We believe that bringing together Incannex and APIRx will bolster our position as a leader in the medicinal cannabinoid sector and will further set IHL apart from other players in the industry,” Incannex Healthcare CEO and managing director Joel Latham said.
“With sizeable addressable markets and intellectual property spanning a multitude of unmet medical needs, we’re positioning Incannex to be a significant player in the pharmaceutical sectors of the future.
“I’m excited by this acquisition opportunity on multiple fronts and look forward to working with the APIRx team to deliver on our vision of providing treatments which will make genuine differences to the lives of millions of people.”
The company believes the acquisition of APIRx will significantly strengthen Incannex’s position as a market leader at the forefront of cannabinoid and psychedelic treatment development, additionally it will:
- Add a large portfolio of intellectual property with granted and pending patents;
- Expand Incannex’s addressable markets globally and addressable market sizes by more than US$400 billion per annum;
- Further enhance Incannex’s technical and drug development capability by adding some of the industry’s longest standing and best-known scientists to the Incannex team; and
- Expand the company’s drug delivery capability to include APIRx’s patented delivery technologies.
Creating a global leader in biotech
“We are delighted to partner with the IHL team as we believe that our extensive experience and broad IP asset base is perfectly positioned for further development and expansion within the IHL organization,” APIRx co-founder Dr George Anastassov said.
“Both companies have proven track records to deliver innovative projects and the goal of this transaction to create the global leader in the cannabinoid, psychedelic and combination pharmaceuticals space.
“We intend to do this by innovatively addressing conditions for which there are only modest, or no safe and effective, treatment options.”
APIRx was established as a corporate entity in the Netherlands to coalesce the intellectual property assets of medicinal cannabis pioneers and APIRx co-founders, Dr George Anastassov and Lekhram Changoer.
The two have collaborated since 2003 and have developed the largest privately held pharmaceutical cannabinoid-related patent portfolio in the world.
Dr Anastassov and Changoer previously licensed their technology to AXIM Biotechnologies Inc, where they oversaw a peak market capitalisation of some US$1.2 billion in 2017 prior to the assets being privatised by APIRx.
“APIRx is bringing new drug delivery technologies backed by patents that, when combined with Incannex’s existing intellectual property, will result in IHL being a state-of-the-art, industry-leading cannabinoid and psychedelic platform,” APIRx co-founder Lekhram Changoer said.
“The drug products developed utilising this broader portfolio of technologies gives us the opportunity to develop, in the clinic, a diverse range of innovative products addressing significant unmet medical needs.
“A post-acquisition Incannex will also have greater presence in the United States and Europe, which may benefit the company to more efficiently undertake multi-site clinical trials that will ultimately be required for FDA clinical trial programs aimed at drug approval.”
From here, Incannex will begin documentation of the long form contract required to complete the proposed transaction and seek shareholder approval via an extraordinary general meeting of shareholders, to be announced in due course.
In the meantime, the Incannex medical and scientific team continue to assess APIRx projects to best prioritise the development of the APIRx therapeutic candidates.
Incannex anticipates about A$5.0 million of expenditure on the APIRx product suite in the first 12 months, with an option to reassess the budget to up to A$10 million following the conclusion of the Incannex Loyalty Option Offer in April.