The Proposed Transaction is expected to:
- provide Tetra with the most robust Pharmaceutical and
Natural Health Products pipeline of any Cannabinoid
company;
- provide Tetra with more pharmaceutical and natural health
products;
- allow Tetra to sell these products
worldwide;
- give Tetra access to Panag's NHP portfolio which is not
included in the present in-licensing agreement with
Panag.
ORLEANS, ON, Jan. 30, 2019 /CNW Telbec/ - Tetra
Bio-Pharma Inc. ("Tetra" or
the "Company"), a leader in cannabinoid-based drug
discovery and development (TSXV: TBP) (OTCQB: TBPMF), today
announced it has entered into a definitive agreement (the
"Agreement") with the shareholders (the "Vendors") of
Panag Pharma Inc. ("Panag") for the previously-announced
acquisition by Tetra of all of the issued and outstanding shares in
the capital of Panag (the "Proposed Transaction").
Panag is a Canadian-based bio-tech company focused on the
development of novel cannabinoid-based formulations for the
treatment of pain and inflammation. Panag has developed
innovative and patented formulations for the treatment of ocular
diseases and other pain conditions such as general neuropathic
pain. Their significant formulation expertise in the wellness
market will allow Tetra to expand its commercial operations.
Dr. Guy Chamberland, CEO and CSO
of Tetra stated, "In completing this acquisition of Panag Pharma we
have not only acquired a large portfolio of cannabinoid derived
pharmaceutical and natural health products but also a team of
scientists that have a substantial amount of expertise in the
field. Tetra Bio-Pharma looks forward to incorporating Panag
into its operations and accelerating its various drug development
programs including our second-generation inhaled program."
Following the closing of the Proposed Transaction, it is
expected that Panag will remain a separate subsidiary owned 100% by
Tetra and provide Tetra with additional discovery and early phase
drug development capacity. With this robust product pipeline,
Tetra intends to continue to implement its out-licensing program to
generate additional revenues via upfront payments, milestone
payments, and royalties and actively pursue the clinical
development of lead products.
According to Dr. Orlando Hung, a
co-founder of Panag, "The Panag team is very excited to have this
well-timed opportunity with Tetra Bio-Pharma, allowing us to
continue our decades of translational cannabinoid research.
Utilizing the expertise and support from Tetra Bio-Pharma, we are
confident that our partnership and combined skills will position us
to bring effective and safe cannabinoid-based medications, as well
as more innovative cannabinoid delivery systems to market to
help managing patients with pain and inflammation."
Pursuant to the Agreement, Tetra would acquire 100% of the
issued and outstanding shares of Panag for an aggregate
consideration of $12,000,000, on a
debt-free basis and subject to customary post-closing adjustments.
The purchase price would be payable by Tetra delivering to the
Vendors, on the closing date of the Proposed Transaction, (i)
$3,000,000 in cash and (ii)
$9,000,000 payable in common shares
of Tetra ("Common Shares"), at a price per Common Share
equal to the lesser of (i) the 10-day volume weighted average
price of the Common Shares ending as of the date of the Agreement
and (ii) the Discounted Market Price (as that term is defined
in the policies of the TSX Venture Exchange ("TSXV")) of the
Common Shares as at the date that is three business days prior to
the closing date of the Proposed Acquisition. The Agreement also
contemplates the payment by Tetra to the Vendors of an aggregate
amount of up to $15,000,000 in cash
in milestone payments upon the achievement of operational targets
associated with marketing approvals and commercialization of both
human and veterinary drug products by the U.S. Food and Drug
Administration (FDA) and the European Medicines Agency (EMA). Tetra
is committed to fund Panag's research in an amount no less than
$1,200,000 annually for a period of
ten years after the closing date of the Proposed Acquisition. The
milestone payments would be accelerated in the event of a
bankruptcy, insolvency, failure of Tetra to make its funding
commitments to Panag, change of control or sale of all of the
assets of Tetra at any time until December
31, 2028. In addition, in the event of a change of control
of Tetra within 24 months of the closing date of the Proposed
Acquisition, the Vendors would be entitled to receive from Tetra an
additional $10 million.
Two of the Vendors, Bill Cheliak
and Gregory Drohan, are non-arm's
length parties to Tetra within the meaning of the rules of the
TSXV. Mr. Cheliak is the Chairman of the board of directors of the
Company (the "Board") and Mr. Drohan is a director of the
Company. The Proposed Transaction will not result in the issuance
of securities to non-arm's length parties as a group as payment of
the purchase price exceeding 10% of the number of outstanding
shares of the Company on a non-diluted basis.
The Board formed a special committee (the "Special
Committee") for purposes of evaluating the Proposed
Transaction. The Special Committee was composed of Benoit Chotard and Carl
Merton, both of whom have no interest in Panag or the
Proposed Transaction. On December 24,
2018, the Special Committee received a fairness opinion (the
"Fairness Opinion") from Paradigm Capital stating that the
purchase price under the Proposed Transaction is fair, from a
financial point of view, to the shareholders of Tetra. In light of
the Fairness Opinion and of other considerations and upon the
recommendation of the Special Committee, the Board approved the
Proposed Transaction. Because of their interests in the Proposed
Transaction, Mr. Cheliak and Mr. Drohan recused themselves from all
meetings and discussions of the Board relating to the Proposed
Transaction and abstained from voting on the resolutions of the
Board approving the Proposed Transaction.
The Company expects that the Proposed Transaction will be
completed in February 2019.
Completion of the Proposed Transaction remains subject to a number
of conditions, including the receipt of the approval of the TSXV
and such other closing conditions as are customary in transactions
of this nature. There can be no assurance that such
conditions will be satisfied and that the Proposed Transaction will
be completed as described or at all.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this release.
About Tetra Bio-Pharma:
Tetra Bio-Pharma (TSX-V: TBP) (OTCQB: TBPMF) is a
biopharmaceutical leader in cannabinoid-based drug discovery and
development with a Health Canada approved, and FDA reviewed,
clinical program aimed at bringing novel prescription drugs and
treatments to patients and their healthcare providers. The Company
has several subsidiaries engaged in the development of an advanced
and growing pipeline of Bio Pharmaceuticals, Natural Health and
Veterinary Products containing cannabis and other medicinal
plant-based elements. With patients at the core of what we do,
Tetra Bio-Pharma is focused on providing rigorous scientific
validation and safety data required for inclusion into the existing
bio pharma industry by regulators, physicians and insurance
companies.
For more information visit: www.tetrabiopharma.com
About Panag Pharma:
Panag Pharma Inc. is a Canadian based bio-tech company focused
on the development of novel cannabinoid-based formulations for the
treatment of pain and inflammation. Panag believes that pain relief
should be safe, non-addictive and above all; effective. The Panag
Pharma team of PhD scientists and medical doctors are among the
world's leading researchers and clinicians in pain treatment
and management. They bring a combined experience of over 100 years
in research and clinical care of people dealing with chronic pain
and inflammatory conditions. Panag's current pipeline of pain
relief products include formulations for the topical application to
the skin, the eye and other mucous membranes. Recently approved by
Health Canada and currently undergoing clinical trials, Panag
Pharma's Topical AOTC provides a new approach to the treatment of
chronic pain and inflammation.
Forward-looking statements
Some statements in this release may contain forward-looking
information. All statements, other than of historical fact, that
address activities, events or developments that the
Company believes, expects or anticipates will or may
occur in the future (including, without limitation, statements
regarding: the anticipated benefits of the Proposed Transaction for
Tetra; completion and expected timing of the Proposed Transaction;
whether the terms of the Proposed Transaction will be as described
in this press release; whether the Proposed Transaction will be
successful; the receipt of the approval of the TSXV
in respect of the Proposed Transaction) are forward-looking
statements. Forward-looking statements are generally identifiable
by use of the words "may", "will", "should", "continue", "expect",
"anticipate", "estimate", "believe", "intend", "plan" or "project"
or the negative of these words or other variations on these words
or comparable terminology. Forward-looking statements are subject
to a number of risks and uncertainties, many of which are beyond
the Company's ability to control or predict, that may cause the
actual results of the Company to differ materially from those
discussed in the forward-looking statements. Factors that could
cause actual results or events to differ materially from current
expectations include, among other things, without limitation, the
inability of the Company to obtain sufficient financing to execute
the Company's business plan; competition; regulation and
anticipated and unanticipated costs and delays, the success of the
Company's research and development strategies, including the
completion of the Proposed Transaction, the applicability of the
discoveries made therein, the successful and timely completion and
uncertainties related to the regulatory process including the
applications for Orphan Drug Designation, the timing of clinical
trials, the timing and outcomes of regulatory or intellectual
property decisions and other risks disclosed in the Company's
public disclosure record on file with the relevant securities
regulatory authorities. Although the Company has attempted to
identify important factors that could cause actual results or
events to differ materially from those described in forward-looking
statements, there may be other factors that cause results or events
not to be as anticipated, estimated or intended. Readers should not
place undue reliance on forward-looking statements. No definitive
documentation has yet been signed by the parties and there is no
certainty that such documentation will be signed. The
forward-looking statements included in this news release are made
as of the date of this news release and the Company does not
undertake an obligation to publicly update such forward-looking
statements to reflect new information, subsequent events or
otherwise unless required by applicable securities
legislation.
SOURCE Tetra Bio-Pharma Inc.