Incannex Healthcare Ltd (ASX:IHL, NASDAQ:IXHL) has entered into a share sale and purchase agreement to acquire 100% of the issued share capital in APIRx Pharmaceuticals USA, LLC.
When the acquisition is finalised, the stakeholders in APIRx will be issued a total of 218,169,506 new shares in the company at a value of A$0.573 per share scheduled to occur in June 2022.
APIRx will bring to Incannex its 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 in the medicinal cannabinoid sector.
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.
Post-acquisition, APIRx will become a wholly-owned subsidiary of the company, bolstering Incannex’s position as a leader in the medicinal cannabinoid sector.
The market welcomed the news with shares trading as high as A$0.435 on the ASX, up 19.2% from the previous close.
“Significant value growth”
Incannex CEO and managing director Joel Latham said: “The acquisition of APIRx presents us with clear long and short-term opportunities for significant value growth.
“Several drug candidates have shortened regulatory pathways to break into areas of patient need representing very large global markets.
“These candidates are our initial development priority”.
“Incannex’s strong cash position allows us to pursue these near-term product opportunities at the same time as moving at pace to develop the Incannex combination drug candidates.
“Once the acquisition of APIRx has been finalised, Incannex will have many diverse projects under development, the progress over which we will update the stock exchanges with ongoingly”
Agreement summary
Key points in the sale and purchase agreement include:
- The stakeholders of APIRx (sellers) give warranties and indemnities to IHL that are typical for a transaction of this kind, subject to customary liability qualifications, acknowledgements, and limitations, including in respect of minimum claim amounts, claim time limitations, maximum claim cap, no consequential loss and third-party payment reimbursements.
- The sellers provide indemnification of Incannex for any liability incurred by any APIRx group entity arising in relation to or in connection with the APIRx group entity's failure to comply with any of its obligations arising under law, equity, or statute in respect of the intellectual property rights in the period before the completion date.
- The sellers must also ensure that APIRx carries on its business in the ordinary and normal course ahead of completion.
- The sellers have entered a voluntary escrow deed restricting the disposal of any interest in any of the shares to be issued.