Stellar Biotechnologies (NASDAQ:SBOT) has executed a share exchange agreement with closely-held Edesa Biotech to create a new company focused on the development of innovative therapeutics for dermatological and gastrointestinal indications with unmet medical needs.
Under the accord, Edesa shareholders have agreed to exchange their shares for newly issued common shares of Stellar so that at closing, Edesa will become a wholly-owned subsidiary of Stellar.
Following closing, which is expected in the second quarter of 2019, current Stellar shareholders are expected to own about 10%, and current shareholders of Edesa about 90%, of the combined company on a fully-diluted basis.
Stellar plans to change its name to Edesa Biotech. Stellar also intends to develop a plan after closing for the disposition of its operations, which is expected to include the wind down or spin-off of its legacy business.
“We believe this proposed business combination provides new growth opportunities for Stellar shareholders,” Frank Oakes, president and CEO of Stellar, said in a statement.
Dr. Par Nijhawan, CEO of Edesa, said the agreement marks another milestone for the company and its mission to efficiently develop novel, safe and effective treatments for conditions where patients have limited treatment options available.
“We believe we are at a significant inflection point in our company’s history and look forward to offering shareholders additional value creation opportunities as we reach milestones in our clinical programs,” he added.
