ESSA Pharma announced that it has entered into a definitive agreement with Realm Therapeutics setting forth the terms of an acquisition whereby ESSA will acquire all of the issued and outstanding shares of Realm in an all-stock transaction.
The acquisition, subject inter alia to Realm Shareholder approval, is intended to be implemented by means of a UK Court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006 and is expected to be completed by mid-year 2019. Upon the closing of the Acquisition, the Company will continue to operate as ESSA Pharma Inc., trade on the Nasdaq Capital Market and TSX-V Market and operate in the United States as ESSA Pharmaceuticals Corp., a Houston, TX-registered wholly-owned subsidiary. The Company will focus on advancing ESSA’s pipeline of novel potential treatments for prostate and other cancers.
The terms of the Acquisition value Realm’s issued and outstanding shares at approximately USD $21.5 million, which represents a 5% premium over Realm’s estimated net cash amount of USD $20.5 million at the closing of the Acquisition. Under the terms of the Acquisition, Realm Shareholders will be entitled to receive approximately 0.058 ESSA ordinary shares for each Realm Share based upon a 60-day volume-weighted average price of ESSA shares of USD $3.19 per share of ESSA as of the close of trading on May 14th, 2019, subject to a final adjustment based on Realm’s final net cash amount prior to closing of the Acquisition. Upon the close of the Acquisition, ESSA’s current management team will continue to lead the Company. In addition, it is expected that the Company’s Board of Directors will be increased to nine members of which three will be Realm-nominated candidates, with two current ESSA directors resigning.
“We are truly excited by the opportunity afforded by this transaction to further advance ESSA’s aniten program of N-terminal domain inhibitors of the androgen receptor,” said Dr. David R. Parkinson, Chief Executive Officer of ESSA. “Our lead candidate EPI-7386 was recently nominated as the IND candidate for the treatment of prostate cancer. We believe that the current transaction, which is intended to be supplemented by an equity financing involving insiders and other investors, will deliver sufficient financial resources to ESSA to achieve multiple value-inflection points and key near-term objectives in the coming two years including: first, completion of a Phase 1 clinical trial for our lead program EPI-7386 in patients with advanced prostate cancer progressing on the latest generation of anti-androgens; secondly, generation of proof-of-concept clinical data from a Phase 1 trial for EPI-7386 in combination with those same anti-androgens in prostate cancer patients; and thirdly, further advance our early preclinical pipeline of novel anitens for the potential treatment of breast cancer.”
“We are very pleased to enter into this transaction with ESSA, whose lead program is a first-in-class therapy for the treatment of castration-resistant prostate cancer, which represents a significant unmet need for patients,” said Alex Martin, Chief Executive Officer of Realm. “Following a comprehensive review of strategic alternatives, Realm’s Board of Directors concluded that the proposed acquisition will provide an opportunity to create meaningful value and, as such we have significant support from our shareholders for the transaction.”
This Announcement is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful. Any securities offered or sold in the United States pursuant to any financing must be either registered under the U.S. Securities Act or offered or sold pursuant an applicable exemption from such registration requirements.
Oppenheimer & Co. Inc. is acting as a financial advisor to ESSA and has delivered a fairness opinion to its Board of Directors. Eversheds Sutherland (International) LLP, Blake Cassels & Graydon LLP, and Skadden, Arps, Slate, Meagher & Flom LLP are acting as UK, Canadian, and US legal counsel, respectively, to ESSA. MTS Health Partners is acting as a financial advisor to Realm. Cooley LLP is acting as US and UK legal counsel and Fasken Martineau DuMoulin LLP is acting as legal counsel to Realm.
Source: Company Press Release.