Aeterna Zentaris Inc. and Ceapro Inc. announced that they have entered into a definitive agreement to combine operations in an all-stock merger of equals transaction. The combined company is expected to be listed on the Nasdaq Capital Market and the Toronto Stock Exchange, subject to the receipt of all necessary approvals. A new name for the combined company will be announced in the coming weeks and the Transaction is expected to close in the first quarter of 2024.
The combination is attractive for shareholders of both companies, as it is expected to create a long-term sustainable business, which is optimally positioned to deliver value as the biopharma sector recovers from its current levels.
Key attributes of the combined company include:
- Recurring revenue to support business expansion. The combined company will benefit from ongoing revenue from existing Ceapro products – which provide near-term revenue owing to the streamlined development and commercialization opportunities in the cosmeceutical and nutraceutical space – along with license revenue from the partnering of Aeterna’s pharmaceutical products, including Macrilen®/Ghryvelin®, which have the potential to create long-term value for investors. These revenue streams will be used to support the development of high potential-return products and represent a more diversified value proposition for investors.
- Diversified commercial and development product pipeline. The combined company will have a stronghold in the active ingredients market and value-driving cosmeceutical products (i.e. oat beta glucan and avenanthramides, which are found in leading skincare product brands including Aveeno, Jergens, Neutrogena, Lubriderm and other leading brand names) and nutraceuticals. It will also benefit from a robust pipeline of innovative products in development.
- Dual-listing expected to improve trading volume and capital market profile. Shareholders of each company will share in future value creation, with existing securityholders of Aeterna and Ceapro to each own 50% of the combined company, respectively (assuming the exercise of all Transaction Warrants (as defined below)). The anticipated dual Nasdaq and TSX listing is expected to provide additional volume and an improved capital market profile for the combined company.
- Strengthened combined balance sheet. The combined company will be well-capitalized to support ongoing commercial operations while strategically investing in product research and development to advance differentiated, innovative products.
- Operational synergies and leadership. The combined company will benefit from established pharmaceutical research and development capabilities and infrastructure to support development activities and draw on existing executives to form the new management team.
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