TORONTO--(BUSINESS WIRE)--Antibe Therapeutics Inc. ("Antibe" or the "Company") (TSXV:ATE, OTCQX:ATBPF) is pleased to announce that it has entered into agreements to complete strategic transactions that mark the transition of the Company from a development-focused biotechnology company to a diversified healthcare company with both development and commercial-stage assets across a broad range of markets.
In addition to the ongoing development of its lead clinical candidate, ATB-346, and its pipeline of drugs that target inflammatory and degenerative conditions, Antibe is undertaking a strategic thrust into regenerative medicine.
Summary of Transactions
-
Antibe will acquire an 85% interest in Citagenix Inc. ("Citagenix"), a
Montreal-based sales and distribution company with a focus on
regenerative medicine;
- creates a diversified healthcare products company with annual revenues of approximately C$10 million
- creates a commercial infrastructure for additional products
- Antibe will acquire the remaining 15% interest in Citagenix upon fulfillment of a regulatory condition
- Antibe proposes to complete a non-brokered private placement of convertible debentures and warrants for gross proceeds of up to $2.75 million.
Antibe has entered into share purchase agreements to acquire 85% of Citagenix. Citagenix is a privately held, Montreal-based regenerative medicine company, specializing in bone grafting and related procedures. It markets, manufactures, sells and distributes a broad range of high-quality dental and orthopaedic surgical products, as well as a line of highest-quality, German-made surgical instruments. Citagenix has a fully established commercial infrastructure with annual revenues of $9.7 million for the 12-month period ending August 31, 2015. As at August 31, 2015, Citagenix had current assets of $2.94 million, total assets of $3.03 million, current liabilities of $1.05 million, long-term debt of $0.16 million, preferred shares of $1.14 million, and shareholders’ equity of $0.68 million. The financial information for Citagenix is unaudited.
Antibe believes there is opportunity for organic growth of the existing product portfolio, addition of new products and expansion into the U.S., Europe, Middle East and Asian markets in the near term. Antibe has agreed to further develop the sales capacity of Citagenix by investing an additional $2.25 million in Citagenix in the next year. Antibe has agreed to purchase 85% of the common shares and 100% of the preference shares of Citagenix, by paying $400,000 in cash and issuing 25,876,421 Antibe common shares at a deemed price of $0.15375 per common share. The Citagenix vendors have agreed to a lock-up of the Antibe common shares they will receive as consideration, with 25% of such shares to be released on the closing date, and an additional 25% to be released on each of the 6 month, 9 month and 12 month anniversary of the closing date. The purchase price of Citagenix represents approximately 0.5x the current unaudited annual revenue of Citagenix. Antibe has agreed to purchase the remaining common shares of Citagenix by issuing 2,857,500 Antibe common shares at a deemed price of $0.20 per common share subject to the vendor clearing a Personal Information Form (“PIF”) with the TSX Venture Exchange. Further information concerning the vendor of the remaining Citagenix shares will be disclosed in a subsequent news release following clearance of the PIF. Citagenix will operate as a subsidiary of Antibe and its financial statements will be consolidated with those of Antibe.
Daniel Legault, CEO of Antibe, commented, "We believe this transaction is transformative for Antibe. We have obtained a commercial infrastructure and we are excited for the opportunity to work with our new colleagues at Citagenix. The Citagenix product portfolio and large existing customer base provide a platform to grow the business and we expect and sustained growth of these revenues over time by selectively adding class-leading and innovative products to our product line."
Uwe Tritthardt, CEO of Citagenix, stated, "We are very excited by becoming an important part of the new Antibe fully integrated healthcare company. Joining with Antibe will provide Citagenix the funding needed to accelerate our growth strategy."
In connection with the above transaction, Antibe intends to complete a non-brokered private placement of senior secured convertible debentures (the "Debentures") and warrants (the "Warrants") for gross proceeds of up to $2.75 million. The Debentures will have a term of three years from the date of their issuance, bear interest at a rate of 10% per year, be convertible at the option of the holder into common shares of Antibe at a price of $0.22 per share and be secured by the assets of Antibe. Purchasers of the Debentures will be issued an aggregate of up to 5,500,000 Warrants to purchase common shares of Antibe. The Warrants will be each exercisable for the purchase of one common share of Antibe at a price of $0.31 for a period of 3 years. The Bloom Burton Healthcare Lending Trust, a healthcare-specialized institutional investor, is expected to be the lead investor in the private placement.
John Wallace, Antibe’s founder and CSO, added, “This is a transformative day for Antibe and our shareholders. We believe that these transactions will provide new avenues of growth for Antibe and, most importantly, with immediate revenues to deliver value while we continue to develop ATB-346 and our other potential blockbuster NSAID derivatives. In addition, while there is strong strategic fit between the two companies, their therapeutic areas and patient populations served, the acquisition of Citagenix provides diversification of our business and a growth platform. We are pleased that Antibe has transformed into an integrated healthcare and biotechnology company with a focus on inflammation, pain and regenerative medicine.”
Each of the Citagenix acquisition and the offering of the Convertible Debentures and Warrants is conditional on the prior approval of the TSX Venture Exchange.
About Antibe Therapeutics Inc.
Antibe develops safer medicines for pain and inflammation. Antibe’s technology involves linking a hydrogen sulfide-releasing molecule to an existing drug to produce a patented, improved medicine. Antibe’s lead drug ATB-346 targets the global need for a safer non-steroidal anti-inflammatory drug (NSAID) for chronic pain and inflammation. ATB-352, the second drug in Antibe’s pipeline, targets the urgent global need for a safer analgesic for treating severe acute pain, while ATB-340 is a GI-safe derivative of aspirin.
About Citagenix Inc.
Citagenix is a leader in the sales and marketing of tissue regenerative products servicing the orthopaedic and dental marketplaces. Since its inception in 1997, Citagenix has become the largest source of knowledge and experience in the Canadian medical device industry when it comes to bone regeneration and is known as a valuable reference and resource by clinicians. Operating in Canada through its direct sales teams, and a network of distributor partnerships around the world, Citagenix is active in 15 countries. For more information about the company, please visit www.citagenix.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) and no stock exchange, securities commission or other regulatory authority accepts responsibility for the adequacy or accuracy of this release nor approved or disapproved of the information contained herein.
Forward Looking Information
This news release includes certain forward-looking statements which may include, but are not limited to, the transition of the Company to a diversified healthcare company, the development of ATB-346 and other drugs, the thrust into regenerative medicine, the acquisition of shares of Citagenix and acquisition of the remaining shares of Citagenix, the completion of non-brokered private placement, opportunities for organic growth, growth of the business and revenue and the addition of products to the company’s product line. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "will", "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions. Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results, performance, or achievements to differ materially from those expressed or implied in this news release. Factors that could cause actual results to differ materially from those anticipated in this news release include, but are not limited to, Citagenix financial performance not matching past performance, risks associated with drug development generally, failure to satisfy closing conditions for the Citagenix transactions (including failure to clear the necessary PIF) and the private placement, not obtaining future financing on adequate terms, or at all, anticipated sales not achieving expected volumes and not obtaining TSX Venture Exchange approval for the transactions described herein. Antibe Therapeutics Inc. assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements except as required by applicable law.
