After the R&D biotechnology business made an acquisition maneuver, shares of Midatech Pharma plc (NASDAQ: MTP) were up 14.97% to trade at $0.9199 in after-hours trading at the time of our last check.
What has MTP been purchasing?
This week, Midatech Pharma (MTP) revealed that it has made a conditional agreement to purchase all of Bioasis Technologies Inc.’s issued and future share capital (“Bioasis”). Midatech Pharma participated in the transaction (the “Acquisition”) for a total consideration of around C$7.4 million (about £4.4 million) (together, the “Enlarged Group”).
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By issuing 75,884,553 new ordinary shares of 0.1 pence each in the composition of MTP Ordinary Shares, at a ratio of 0.9556 Ordinary Shares for every one Bioasis Share, the acquisition consideration will be met (the “Exchange Ratio”).
Highlights: Confirmation of a conditional agreement for MTP to purchase Bioasis, a biopharmaceutical company listed on the TSX-V that specializes in developing medicines to treat neurological disorders that are uncommon orphan illnesses.
The Enlarged Group plans to concentrate on rare and orphan therapies with two clinical-stage candidates focused initially on CNS diseases. Bioasis has collaborations with pharma firms with potential payments totaling over US$200 million should different evaluation conditions and milestones be met.
In order to promote the Company’s redefined strategy, the MTP Board sees the Acquisition as a compelling strategic opportunity. With less dependence on R&D partnerships and licensing with outside parties, enhanced news flow, including clinical data, and cheaper combined overheads, the transaction will also benefit MTP.
The acquisition is anticipated to provide MTP and its shareholders with a number of important advantages, including a change from a drug distribution framework business to a novel therapeutic company; a concentrate on rare and orphan diseases; and branding distinctiveness for seven years and ten years in the US and Europe.
How would the acquisition aid MTP’s development?
Midatech Pharma (MTP) has the chance to reposition the expanded group as an emergent biotech firm focusing on the discovery of treatments for rare illnesses, supported by Midatech Pharma and Bioasis’ enabling drug delivery systems, by joining the two groups to become Biodexa Pharmaceuticals. MTP has the chance to build a significantly stronger team and change from a drug delivery platform-based firm to a therapeutics company by combining with Bioasis’ optimistic development pipeline.
