LOS ANGELES, March 8, 2019 /CNW/ -- Stellar
Biotechnologies, Inc. (Nasdaq: SBOT), a leading manufacturer of a
key protein utilized in immunotherapy and immuno-oncology
development pipelines, has executed a share exchange agreement with
privately-held Edesa Biotech Inc., a Canadian company, and Edesa's
shareholders to create a company focused on the development of
innovative therapeutics for dermatological and gastrointestinal
indications with clear unmet medical needs.
Under the terms of the share exchange agreement, Edesa
shareholders have agreed to exchange their shares of Edesa for
newly-issued common shares of Stellar. At the closing, Edesa will
become a wholly-owned subsidiary of Stellar. Following the closing,
current Stellar shareholders are expected to own approximately 10%,
and the current shareholders of Edesa are expected to own
approximately 90%, of the combined company on a fully-diluted
basis, subject to a 2% upward or downward adjustment based upon the
amount of Stellar's working capital balance immediately prior to
the closing. Following the closing, Stellar will change its name to
"Edesa Biotech Inc."
"We believe this proposed business combination provides new
growth opportunities for Stellar shareholders. We have been
impressed with Edesa's management team and are looking forward to
implementing a new vision for the combined company," said
Frank R. Oakes, Stellar President
and Chief Executive Officer.
"This agreement marks another milestone for Edesa and our
mission to efficiently develop novel, safe and effective treatments
for conditions where patients have limited treatment options
available," said Par Nijhawan, MD, Chief Executive Officer of
Edesa. "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."
The proposed transaction, which will result in a change in
control, is expected to close during the second quarter of 2019,
subject to customary closing conditions, including Stellar
shareholder approval for the issuance of Stellar common shares to
acquire Edesa. Following closing, Stellar intends to develop a plan
for the disposition of Stellar's operations, which is expected to
include the wind down or spin-off of Stellar's legacy business.
Following a diligent review of strategic alternatives, Stellar's
Board of Directors has determined that the share exchange agreement
is fair and in the best interests of Stellar and Stellar's
shareholders. For further information about the proposed
transaction, investors should refer to Stellar's SEC filings.
H.C. Wainwright & Co. acted as transaction advisor and
Greenburg Traurig LLP (USA) and
McMillan LLP (Canada) acted as
legal advisors to Stellar. Fasken Martineau DuMoulin LLP
(Canada) and Stubbs Alderton &
Markiles, LLP (USA) acted as legal
advisors to Edesa.
About Stellar Biotechnologies
Based north of Los Angeles at the
Port of Hueneme, Stellar Biotechnologies, Inc. (Nasdaq: SBOT)
is the leader in sustainable manufacture of Keyhole Limpet
Hemocyanin (KLH), an immune-stimulating protein utilized as a
carrier molecule in therapeutic vaccine pipelines (targeting
cancers, immune disorders, Alzheimer's and inflammatory diseases)
and for assessing immune system function. KLH can also be used in
immunotoxicology studies for monitoring the immunomodulatory
effects of drug candidates. Stellar KLH is a trademark of Stellar
Biotechnologies.
About Edesa Biotech Inc.
Edesa Biotech Inc. is a clinical-stage company focused on
efficiently developing innovative treatments that address
significant unmet medical needs. The company's leading product
candidate, EB01, is a novel non-steroidal anti-inflammatory
molecule for the treatment of allergic contact dermatitis which has
demonstrated statistically significant improvements in multiple
clinical studies. Edesa is based in Toronto, Canada.
Stellar Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may be identified by the use of
words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may," "will," "would," "could," "should,"
"might," "potential," or "continue" and variations or similar
expressions, including statements related to: the expectations
related to the transaction, including the timing of the
transaction, resulting ownership of the combined company, and the
plans relating to the resulting business. Readers should not unduly
rely on these forward-looking statements, which are not a guarantee
of future performance. There can be no assurance that
forward-looking statements will prove to be accurate, as all such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results or
future events to differ materially from the forward-looking
statements. Such risks include, but may not be limited to: the
possibility that Stellar may be unable to obtain shareholder
approval required for the proposed transaction, the expected timing
and likelihood of completion of the proposed transaction, the
possibility that Stellar's working capital decreases prior to the
transaction, and therefore, the Stellar shareholders are subject to
decreased ownership in the combined company, the inability to
successfully integrate the businesses or the risk that such
integration may be more difficult, time-consuming or costly than
expected, the occurrence of any event, change or other
circumstances that could give rise to the termination of the share
exchange agreement, the inability of the parties to meet
expectations regarding the accounting and tax treatments of the
proposed transaction, the potential for the proposed transaction to
involve unexpected costs, the risk that the parties may not be able
to satisfy the conditions to the proposed transaction in a timely
manner or at all, risks related to disruption of management time
from ongoing business operations due to the proposed transaction,
the risk that the expected benefits of the proposed combination are
not realized, the risk that any announcements relating to the
proposed transaction could have adverse effects on the market price
of Stellar's common stock, the ability to maintain and enforce
patents and other intellectual property rights or the unexpected
costs associated with such enforcement or litigation, as well as
general economic and business conditions, technology changes,
competition, changes in strategy or development plans, availability
of funds and resources, anticipated requirements for operating
capital, governmental regulations and the ability or failure to
comply with governmental regulations, changes in trade policy and
international law and other factors referenced in Stellar's filings
with securities regulators. Risks and uncertainties related to
Edesa that may cause actual results to differ materially from those
expressed or implied in any forward-looking statements include, but
are not limited to: the ability of Edesa to obtain regulatory
approval for or successfully commercialize any of its product
candidates, the risk that access to sufficient capital to fund
Edesa's operations may not be available or may be available on
terms that are not commercially favorable to Edesa, the risk that
Edesa's product candidates may not be effective against the
diseases tested in its clinical trials, the risk that Edesa fails
to comply with the terms of license agreements with third parties
and as a result loses the right to use key intellectual property in
its business, Edesa's ability to protect its intellectual property
and the timing and success of submission, acceptance and approval
of regulatory filings. Many of these factors that will determine
actual results are beyond Stellar's, Edesa's or the combined
company's ability to control or predict.
Other risks and uncertainties are more fully described in
periodic filings with the SEC, including the factors described in
the section entitled "Risk Factors" in our Annual Report on Form
10-K filed with the SEC on November 30,
2018 for the year ended September 30,
2018 and any Quarterly Reports on Form 10-Q filed
thereafter, and in other filings that Stellar makes and will make
with the SEC in connection with the proposed transactions,
including the proxy statement described below under "Important
Information and Where to Find It," as well as its filings with the
British Columbia Securities Commission. Existing and prospective
investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
The statements made in this press release speak only as of the date
stated herein, and subsequent events and developments may cause our
expectations and beliefs to change. Unless otherwise required by
applicable securities laws, we do not intend, nor do we undertake
any obligation, to update or revise any forward-looking statements
contained in this news release to reflect subsequent information,
events, results or circumstances or otherwise.
Important Information and Where to Find It
Stellar and Edesa and certain of their directors and
executive officers may become participants in solicitation of
proxies from Stellar shareholders in connection with the proposed
transaction. Additional Information regarding persons who may,
under the rules of the SEC, be deemed to be participants in the
solicitation of the Stellar shareholders in connection with the
proposed transaction, and who have interests, whether as security
holders, directors or employees of Stellar or Edesa or otherwise,
which may be different from those of Stellar shareholders
generally, will be provided in the proxy statement and other
materials to be filed with the SEC.
Each member of Stellar's board of directors and Stellar's
executive officers, and Edesa's board of directors and Edesa's
executive officers may be deemed "participants" in the solicitation
of proxies from the Stellar shareholders in connection with the
proposed transaction.
Information regarding the special interests of these
directors and executive officers in the transaction will be
included in the proxy statement referred to above. Additional
information regarding Stellar's directors' and executive officers'
respective interests in Stellar by security holdings or otherwise
is set forth in Stellar's Annual Report on Form 10-K for the year
ended September 30, 2018 as filed
with the SEC on November 30,
2018.
This communication does not constitute an offer to sell or
the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. A definitive proxy statement
and a proxy card will be filed with the SEC and will be mailed to
Stellar's shareholders seeking any required shareholder approvals
in connection with the proposed transaction. BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION, INVESTORS AND SHAREHOLDERS ARE URGED
TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT STELLAR
MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Shareholders may obtain, free of charge, copies of the definitive
proxy statement and any other documents filed by Stellar with the
SEC in connection with the proposed transaction at the SEC's
website (http://www.sec.gov), at Stellar's website or by writing to
the Corporate Secretary at Stellar Biotechnologies, Inc., 332 E.
Scott Street, Port Hueneme, California 93041.
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SOURCE Stellar Biotechnologies, Inc.
