InMed Pharmaceuticals Inc. (“InMed” or the
“Company”) (Nasdaq: INM), a leader in the manufacturing and
clinical development of rare cannabinoids, today announced that it
has entered into a definitive agreement (“Definitive Agreement”) to
acquire BayMedica Inc. (“BayMedica”), a private company based in
the US that specializes in the manufacturing and commercialization
of rare cannabinoids. The Definitive Agreement follows a previously
signed letter of intent (the "LOI") announced on June 29, 2021. The
transaction, which is subject to certain standard closing
conditions, is expected to close in the coming weeks.
Upon closing, InMed will become a global leader in
the manufacturing of rare cannabinoids, with expertise in three
distinct and complementary cannabinoid manufacturing approaches.
InMed’s proprietary cannabinoid manufacturing process, IntegraSyn™,
combined with BayMedica’s synthetic biology and chemical synthesis
capabilities, will provide InMed with complete manufacturing
flexibility to select the most appropriate, cost-effective method
based on the target cannabinoid and appropriate quality
specifications for the desired market segment. In parallel to
cannabinoid manufacturing, the combined company will continue to
explore the therapeutic potential of cannabinoids and novel
cannabinoid analogs for pharmaceutical drug development, as well as
expand commercial sales of rare cannabinoids to the consumer health
and wellness sector.
Revenues of BayMedica’s initial rare cannabinoid
product, Prodiol® CBC (cannabichromene), have grown steadily since
sales commenced in December 2019, with cumulative revenues in
excess of US$2.5M. BayMedica leads the industry in large batch
production of CBC with current batch sizes of more than 200kg and
an ability to increase to metric ton quantities as market demand
increases. BayMedica is focused on the wholesale to consumer health
and wellness markets, including nutraceuticals, cosmetic,
functional food and beverage, as well as animal health markets. In
addition to CBC, BayMedica has several high value non-intoxicating
rare cannabinoids in various stages of commercial manufacturing
scale-up including CBDV, THCV, CBGV, CBT and CBN for the health and
wellness markets.
Eric A. Adams, President and Chief Executive
Officer of InMed, stated, “This is a transformative transaction for
InMed. This acquisition gives us a breadth of synthetic cannabinoid
manufacturing capabilities to deliver high quality, cost-effective
rare cannabinoids for any segment of the market from consumer
packaged goods (CPG) to prescription pharmaceuticals. After
initializing our research collaboration with BayMedica last
November, it became evident that there are very clear synergies
between our companies. BayMedica brings unparalleled cannabinoid
manufacturing expertise in both chemical synthesis and biosynthesis
together with industry veterans who have been pioneers in this
space.”
Mr. Adams added, “This transaction transforms InMed
into a revenue-generating company, providing tangible value for our
shareholders. BayMedica has demonstrated a rapid increase in sales
since initiating commercialization and we expect to grow these
revenues considerably in the short-to-medium term. We believe this
segment of the industry is reaching an inflection point as
commercial viability is being achieved as well as increased
awareness and appreciation for bio-identical, synthetically
produced cannabinoids.”
BayMedica’s Chief Executive Officer, Shane Johnson,
stated, “The entire BayMedica team is very excited to join InMed.
We look forward to advancing our manufacturing systems together,
enabling us to bring additional rare cannabinoids to the market,
and to leverage our technology and IP to directly contribute to
InMed’s clinical development pipeline. The timing of this
acquisition is ideal given our plans for several high value product
launches.”
Terms of the transaction: Pursuant
to the indicative terms of the Definitive Agreement, InMed will
acquire 100% of BayMedica in exchange for 1.78 million InMed common
shares, to be issued to BayMedica’s equity and convertible debt
holders with any such issued InMed common shares being subject to a
six-month contractual hold period. The total number of InMed common
shares issuable in the proposed transaction may be reduced in the
event that BayMedica’s net liabilities exceed a negotiated
threshold following completion of a financial review of BayMedica’s
closing balance sheet. The Agreement further provides that 470,000
of the InMed common shares issuable on closing will be held in
escrow, subject to cancellation, to satisfy certain potential
post-closing indemnification and other claim(s) that InMed may have
under the definitive agreement in the six- and twelve-month period
following closing of the proposed transaction. In addition,
BayMedica’s equity and debt holders would receive Series A warrants
to acquire up to 800,000 common shares with an exercise price equal
to 125% of the 20-day volume-weighted average closing price of the
Common Shares on Nasdaq prior to the third business day before the
closing of the proposed transaction (the “Deal Share Price”) and
Series B warrants to acquire up to 800,000 common shares of InMed
priced at 200% of the Deal Share Price. Under the terms of the
Definitive Agreement, the closing of the proposed transaction is
subject to various customary closing conditions.
For more information on this transaction and to
hear more about InMed’s future developments, please join Eric A.
Adams and Shane Johnson for an Edison Research hosted webinar on
Thursday, September 16, 2021 at 11:00 am ET. To register
for the webinar please use the following registration
link: Webinar Registration
About InMed: InMed Pharmaceuticals
is a clinical-stage company developing a pipeline of
cannabinoid-based pharmaceutical drug candidates, initially focused
on the therapeutic benefits of cannabinol (“CBN”), and is
developing IntegraSyn™ to produce pharmaceutical-grade
cannabinoids. The Company is dedicated to delivering new
therapeutic alternatives to patients that may benefit from
cannabinoid-based pharmaceutical drugs. For more information,
visit www.inmedpharma.com.
About BayMedica: BayMedica Inc. is
a revenue-stage biotechnology company leveraging synthetic biology
and pharmaceutical chemistry to develop an efficient, scalable, and
proprietary platform to produce high quality, rare cannabinoids for
consumer applications and cannabinoid-derived new chemical entities
for pharmaceutical applications. For more information,
visit www.baymedica.com.
Investor Contact: Colin
ClancySenior Director, Investor RelationsT: +1 604 416 0999E:
cclancy@inmedpharma.com
Edison Group:Joe Green/Laine
YonkerT: +1.646.653.7030/+1.646.653.7035E:
jgreen@edisongroup.com / lyonker@edisongroup.com
Cautionary Note Regarding Forward-Looking
Information: This news release contains
"forward-looking information" and "forward-looking statements"
(collectively, "forward-looking information") within the meaning of
applicable securities laws. Forward-looking statements are
frequently, but not always, identified by words such as “expects”,
“anticipates”, “believes”, “intends”, “potential”, “possible”,
“would” and similar expressions. Such statements, based as they are
on current expectations of management, inherently involve numerous
risks, uncertainties and assumptions, known and unknown, many of
which are beyond our control. Forward-looking information is based
on management's current expectations and beliefs and is subject to
a number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. Forward-looking information in this news release
includes statements about: BayMedica’s plans for further product
launches; statements regarding future revenues; the results and
potential benefits of the combination of InMed and BayMedica’s
business models and their future growth potential; the satisfaction
of all closing conditions for the completion of the
transaction.
With respect to the forward-looking information
contained in this news release, InMed has made numerous assumptions
regarding, among other things: the proposed transaction with
BayMedica occurring on the terms described in this news release if
at all; the proposed transaction with BayMedica completing and the
anticipated results and potential of BayMedica’s business and the
combination of BayMedica’s business with InMed’s business
occurring; continued economic and market stability; delivering new
therapeutic alternatives to patients that may benefit from
cannabinoid-based pharmaceutical drugs; advancing IntegraSyn™ to
commercial scale production; IntegraSyn™ being a commercially
viable solution for large-scale, pharmaceutical-grade GMP
production of rare cannabinoids; and developing a pipeline of
cannabinoid-based pharmaceutical drug candidates. While InMed
considers these assumptions to be reasonable, these assumptions are
inherently subject to significant business, economic, competitive,
market and social uncertainties and contingencies.
Additionally, there are known and unknown risk
factors which could cause InMed's actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking information contained herein. Known risk factors
include, among others: regulatory filings may not be filed or
approved on a timely basis, or at all. A more complete discussion
of the risks and uncertainties facing InMed’s stand-alone business
is disclosed in InMed’s filings with the Security and Exchange
Commission and the most recent Annual Information Form and other
continuous disclosure filed with Canadian securities regulatory
authorities on SEDAR at www.sedar.com.
All forward-looking information herein is qualified
in its entirety by this cautionary statement, and InMed disclaims
any obligation to revise or update any such forward-looking
information or to publicly announce the result of any revisions to
any of the forward-looking information contained herein to reflect
future results, events or developments, except as required by
law.
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