Health: Zelda wants to buy a private US-based medicinal cannabis company
Health & Biotech
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Zelda Therapeutics (ASX:ZLD) wants to acquire private US-based medicinal cannabis and cannabinoid science company Ilera Therapeutics in an all-scrip deal.
This could be the second Australia-North America medicinal cannabis deal of the year with Creso Pharma (ASX:CPH) hoping to be acquired by Canadian pot stock PharmaCielo.
But investors have been cautious on the move thus far, with Zelda shares rising only around 7.7 per cent in early trade on Wednesday.
The so-called merger of equals would create a “leading global therapeutic medicinal cannabis company”, Zelda says, bringing together a pipeline of drug candidates, revenue generating medicines, and a combined strategy to disrupt global medicinal cannabis and pharmaceutical markets, with operations in both Australia and the US.
The two have been working together since March this year, when they signed a heads of agreement to co-develop ‘full-spectrum products’ and put them through clinical trials.
Full-spectrum in cannabis refers to using the whole plant, rather than a synthetic version or a specific extract.
The new company would be called Zelira Therapeutics, and its board would consist of three members of Zelda’s current team and three of Ilera’s.
Stockhead was told that the proposed Zelira business would remain listed on the ASX. The company could also look at a potential NASDAQ listing.
The rationale for the merger is to together develop and sell medicinal cannabis products. Zelda’s managing director Dr Richard Hopkins has previously told Stockhead that his business can help Ilera get around tricky US federal laws, which prohibit the plant.
Zelira generate revenues from proprietary cannabis formulations developed by Ilera and recently launched in Pennsylvania under the HOPE brand. It will also generate proprietary dermatology-focused products for both the retail and cannabis regulated markets.
“This is a transformational opportunity for both companies. The merger will create one of the world’s leading medicinal cannabis companies with a rich pipeline of clinically validated products under development and unique access to the world’s largest and fastest growing cannabis markets,” Zelda chairman Harry Karelis told investors.
A shareholder vote will take place at Zelda’s annual general meeting by the end of November, with the completion of acquisition expected by mid-December if all goes to plan. Over at Creso, its proposal has been approved in its first court hearing, and its shareholder vote will take place on November 11.
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