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SynAct Pharma to make strategic acquisition of Swiss biotech company

SynAct Pharma AB has entered into a conditional agreement on acquisition of TXP Pharma AG, a privately owned Swiss-incorporated biotech company researching and developing pharmaceutical drugs for the treatment of autoimmune and inflammatory diseases.

Key highlights:

Among the sellers of TXP are, directly and indirectly, Torbjørn Bjerke, chairman of the board of directors of SynAct, Jeppe Øvlesen, CEO of SynAct, Thomas Jonassen, board member and CSO of SynAct, Thomas Boesen, COO of SynAct and Jim Knight, CBO of SynAct. The completion of the acquisition of TXP is conditional on that the acquisition and the issue of the consideration shares are approved at an extraordinary general meeting in SynAct.

The transaction process has been handled by a committee composed of the four non-conflicted members of the board of directors, chaired by Uli Hacksell. In its work, the committee has been supported by legal and financial advisors and has also obtained a third-party valuation of TXP’s assets as well as a so-called fairness opinion issued by Ernst & Young AB.

“By combining the pipeline and scientific capabilities of SynAct and TXP, we strengthen SynAct’s leading position within therapies for resolution treatment through melanocortin biology, and boosts its growing development portfolio. Also, we can now tackle the full range of inflammatory and autoimmune diseases with two complementary platforms, which underscores SynAct’s place in the forefront of developing pharmaceuticals to treat these severe and debilitating diseases where there is a great unmet medical need," commented Uli Hacksell, board member of SynAct.

The acquisition of TXP

TXP is a privately held, Swiss-incorporated biotech company researching and developing pharmaceutical drugs which are planned to be used for treatment of autoimmune and inflammatory diseases by stimulation (agonist) of melanocortin receptors. TXP has created a platform of more than 70 unique analogs of the naturally occurring melanocyte stimulation hormone (MSH) with a range of selectivity when binding to the melanocortin receptors. By using a propriety platform, TXP has developed peptides which are both stable and selective in stimulation of the different receptors.

TXP-11 is TXP’s most developed project, which is in preclinical phase and has completed regulatory toxicology studies required to initiate Phase 1 studies in humans. TXP-11 is a peptide which is administered intravenously and whose primary indication is the prevention of organ failure and damage in connection with surgical operations. The project is expected to advance into Phase 1 in 2023. TXP’s development portfolio also includes TXP-35 and TXP-59, both very potent melanocortin receptor agonists, identified as candidates for slow-release formulation. This gives the potential to further development within the wide range of inflammatory and autoimmune diseases where stimulation of melanocortin receptors has proved successful.

Through the acquisition of TXP, SynAct’s position within therapies for resolution treatment through melanocortin biology is strengthened. The acquisition of TXP gives SynAct two platforms that complement each other and create a versatility to develop therapies to address the full range of inflammatory and autoimmune diseases. The development portfolio is strengthened, and the aim is that SynAct, as a result of the acquisition, will shortly have two projects in clinical development and another two in a relatively advanced preclinical phase. A direct advantage of this is that the possibilities of a strong, continuous and value-creating news flow increase.

Transaction terms and funding

The completion of the acquisition of TXP is conditional upon approval at the extraordinary general meeting which is planned to be held on 12 January 2023.

Subject to the extraordinary general meeting resolving to approve the acquisition and the issue of the consideration shares, the acquisition of TXP is expected to be completed around 16 January 2023.

The purchase price for the acquisition is composed of a fixed purchase price of SEK 136 million and a potential additional purchase price of SEK 55 million. The fixed purchase price will be paid through the issuance of in the aggregate 2,172,523 new issued shares in SynAct, corresponding to a dilution of approximately 6.8 per cent (after completion of the directed cash new issue). In determining the number of shares issued, a settlement price of SEK 62.60 per share (corresponding to the volume-weighted average price of the company's shares on Nasdaq Stockholm during 30 trading days up to and including the trading day prior to the date of signing of the share purchase agreement) has been used.

In connection with the acquisition, SynAct has also resolved to execute a directed cash new issue of SEK 80 million which is announced through a separate press release. The completion of the directed cash new issue is not conditional upon the completion of the acquisition of TXP.

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