Reunion Neuroscience Inc. (NASDAQ: REUN) (TSX: REUN) will be acquired by MPM BioImpact, an investment firm focused on biotechnology, in an all-cash deal valued at US$13.1 million.
Under the agreement announced May 31, Reunion shareholders will receive $1.12 U.S. per share, which represents a 43.1 per cent premium over the company’s 30-day weighted average share price. Based on the Bank of Canada’s exchange rate, the offer is equivalent to $1.52 per share.
Reunion’s board of directors unanimously recommended that shareholders vote in favour of the deal at a meeting expected around July 12. Certain shareholders and all of Reunion’s officers and directors, who control about 34 per cent of shares, have agreed to support the transaction.
Completion of the deal is subject to shareholder, regulatory and court approval, Reunion holding at least $8 million U.S. in cash, and other customary closing conditions. It’s expected to close in the third quarter.
“We believe this all-cash transaction maximizes value and is in the best interest of our shareholders,” Reunion president and CEO Greg Mayes said in a statement.
Read more: Reunion Neuroscience struggles to maintain Nasdaq listing requirements
Read more: Reunion Neuroscience files lawsuit against Mindset Pharma for copying drug compound
Reunion is focused on developing treatments for mental health conditions. Its lead drug candidate is RE104, a psychedelic compound for postpartum depression that’s in early-stage clinical trials.
MPM BioImpact managing partner Ansbert Gadicke said the deal reflects the firm’s strategy of investing in “breakthrough science and innovative products that can address the world’s greatest unmet medical needs.”
The company, which was formerly known as Field Trip Health, was struggling to maintain the US$1.00 minimum share price requirement on the Nasdaq Stock Exchange. Last April, the biotechnology company received a letter from the Listing Qualifications Department of the exchange explaining that it had failed to hold the minimum share price for 30 consecutive business days.
Reunion now has until October 16 to fulfill the requirements, which entails holding the minimum share price for 10 consecutive business days between now and that date. If the company fails to do so, it may be granted an additional 180 days to fulfill the requirements before potentially being delisted from the exchange.
Reunion filed a lawsuit last March alleging that Mindset Pharma Inc. (CSE: MSET) (FSE: 9DF) (OTCQB: MSSTF) copied Reunion’s compound.
The company filed the lawsuit in the United States District Court for the District of New Jersey, alleging that Mindset knowingly copied Reunion’s RE104 compound and misleadingly presented that exact composition to the Patent Office as Mindset’s invention while applying for a patent.
Natalia@mugglehead.com
