DelMar Pharmaceuticals Inc. agreed to acquire privately held Adgero Biopharmaceuticals Holdings Inc. in an all-stock deal.
San Diego-based DelMar will issue common shares to Adgero's shareholders, with DelMar and Adgero's shareholders owning 50.5% and 49.5% stakes in the combined company, respectively, upon completion of the transaction.
DelMar expects the deal to close in the third quarter of 2020, subject to closing conditions, including approval from shareholders of both companies. The acquisition is approved by the directors of both companies.
Additionally, the deal is subject to the closing of financing worth at least $10 million and a continued listing of DelMar's shares on the Nasdaq Capital Market.
The transaction will not include securities to be issued in the financing that occurs prior to the deal close as well as compensation payable in connection with the acquisition and the financing. Moreover, 1,470,092 outstanding warrants to buy Adgero's common shares will be exchanged for a warrant to purchase DelMar's common shares based on the deal's exchange ratio.
DelMar expects to change its name to Kintara Therapeutics Inc. on completion of the deal and its shares will trade on the Nasdaq under the new ticker symbol KTRA.
The combined company will have seven board members, of which four will be designated by DelMar. Two of these directors will be nominated by Adgero and approved by DelMar, while the remaining two nominees must be approved by both companies.
Saiid Zarrabian, DelMar's president and CEO, will retain his position in the combined company. DelMar's CFO Scott Praill and Chief Scientific Officer Dennis Brown will also continue in their respective positions.
Adgero is developing photodynamic therapy for the treatment of rare and unmet medical needs in cancer. Photodynamic therapy combines a drug with a light source to treat certain diseases.
Its cancer therapy REM-001 has been studied in four phase 2/3 trials in patients with cutaneous metastatic breast cancer, who had a history of chemotherapy treatment and/or failed radiation therapy.
DelMar is currently evaluating its experimental treatment VAL-083 in patients with unmethylated glioblastoma, a type of brain tumor, in two phase 2 studies. The company is also developing the drug for the treatment of platinum-resistant ovarian cancer.
Lowenstein Sandler LLP was external legal counsel to DelMar, while Gracin & Marlow LLP was external legal counsel to Adgero. Ladenburg Thalmann & Co. Inc. provided a fairness opinion to DelMar.