ESSA Pharma has entered into a definitive agreement with XenoTherapeutics under which Xeno will acquire all of the issued and outstanding common shares of ESSA . XOMA Royalty Corporation a biotechnology royalty aggregator, is acting as the structuring agent and will provide financing to Xeno for this Transaction.
Under the terms of the Business Combination Agreement, ESSA shareholders will receive a cash payment per Common Share that will be determined based upon ESSA's cash balance at closing after deducting certain transaction costs, a reserve for liabilities and legal expenses, and a transaction fee. In addition, each ESSA shareholder will also receive one non-transferable contingent value right for each Common Share that entitles the holder to receive a pro rata portion of up to US$2,950,000 within 18 months following the close of the Transaction.
To expedite the distribution of cash to ESSA shareholders, ESSA will also apply to the Supreme Court of British Columbia for an order authorizing it to make an initial cash distribution to ESSA shareholders prior to the closing of the Transaction. In total, with the initial cash distribution, if authorized, and the cash payable upon closing of the Transaction, each ESSA shareholder is currently estimated to receive approximately US$1.91 per Common Share, exclusive of any payments received pursuant to the CVR.
"After conducting a comprehensive review of the opportunities available to ESSA and considering the communications received from our shareholders, the ESSA Board of Directors has unanimously concluded that entering into this agreement with Xeno and XOMA Royalty is in the best interest of the Company and maximizes value for our shareholders as the Company proceeds with its plans to discontinue operations and wind-down its business," said David Parkinson, M.D., President and CEO of ESSA. "This Transaction delivers cash value to shareholders in an expedited timeframe, with less complexity and value risk when compared to a liquidation, and thus delivers more certain value to shareholders."
Subscribe to our e-Newsletters
Stay up to date with the latest news, articles, and events. Plus, get special offers
from American Pharmaceutical Review – all delivered right to your inbox!
Sign up now!