Benzinga | Dec 28, 2021 09:03AM EST

Aditxt Signs Share Exchange Agreement to Acquire AiPharma in Cash, Stock Deal

Aditxt Inc. (NASDAQ:ADTX), a biotech innovation company with a mission to improve the health of the immune system, has signed a share exchange agreement to acquire AiPharma Global Holdings LLC, a wholly-owned subsidiary of AiPharma Group Ltd. ("AiPharma"). The share exchange agreement contemplates that the transaction would involve two steps. First, an initial closing is expected to occur upon the satisfaction of certain conditions no later than January 31, 2022, at which Aditxt will acquire 9.5% of the issued and outstanding equity interests in AiPharma in exchange for the issuance of approximately 4.8 million shares of common stock of Aditxt and a cash payment of $250,000. Second, Aditxt would then acquire the remaining 90.5% of the issued and outstanding equity interests in AiPharma in exchange for the issuance of approximately 39.9 million shares of common stock of Aditxt and a cash payment of $250,000 at a secondary closing, subject to the satisfaction or waiver of certain conditions to closing, including, but not limited to, shareholder and Nasdaq approval.

Business Highlights:

AiPharma holds directly, or through its affiliates worldwide (excluding Japan), exclusive rights to Avigan and all formulations of Favipiravir. This broad-spectrum oral antiviral drug targets COVID-19 and other infectious diseases. Avigan has regulatory approval to treat COVID-19 and influenza in Mexico, United Arab Emirates, India, Indonesia, Malaysia, Japan, and Thailand. Other countries buy the treatment under compassionate patient programs. In the United States, Phase 3 PRESECO (PREventing Severe COVID-19) clinical trial evaluating Avigan for the treatment of mild-to-moderate COVID-19 did not achieve statistical significance on the primary endpoint of time to sustained clinical recovery. AiPharma is currently planning to launch a new global clinical trial involving escalated doses of monotherapy and combination therapy.In September 2021, AiPharma entered into a strategic alliance with Appili Therapeutics (TSX:APLI) (OTCQX:APLIF) ("Appili"), an infectious disease biopharmaceutical company, pursuant to which AiPharma and Appili intend to establish minority positions in each other's businesses.Appili has a pipeline of five therapeutics and recently announced positive one year challenge results from its preclinical study evaluating the efficacy of ATI-1701, a vaccine to protect against a potential bioterrorism agent, 1,000 times more infectious than anthrax.The senior leadership team, who have a successful track record in rapid commercialization, will remain in place to support the acceleration of Aditxt's growth strategy.Together, the combined companies would offer an enhanced value proposition with a suite of monitoring and treatment solutions for infectious diseases enabling detection, prevention, and treatment, expanding the offering to AiPharma's existing global network of distributors.Aditxt Co-Founder and CEO Amro Albanna commented, "We are taking steps that we believe will transform Aditxt into a fully-integrated commercial-stage global biopharmaceutical business, with focus on all aspects of immune diagnosis and therapeutics. The proposed transaction with AiPharma would commercially establish Aditxt in the infectious disease space complementing our current therapeutic programs in autoimmunity, dermatology, organ transplantation, and central nervous system. This transaction mirrors the parallel steps we are taking in immune diagnosis with the recently announced intent to acquire a company in the Point-of-Care space which would technologically and commercially complement AditxtScore(tm). These combined transactions would allow us to execute our strategy of growth, global expansion, and product portfolio diversification, consistent with our priorities to advance our immune monitoring and treatment technologies to advance human health globally. We look forward to working with the AiPharma team to bring valuable therapeutic options to extend and improve the quality of life of millions of patients."

"Since our launch, AiPharma has worked to develop and deliver transformative solutions to patients around the world. We remain committed and steadfast in bringing an effective broad spectrum anti-viral treatment to the market while leveraging our strong pipeline of opportunities and our commercial network," stated Alessandro Gadotti, Chief Executive Officer of AiPharma. "The acquisition of AiPharma, with our strong commercial portfolio and robust pipeline, will support Aditxt's near-term ambition to develop novel therapies and technologies in areas of immunology with a high unmet medical need. We are delighted at the prospect of being acquired by Aditxt at this exciting juncture in their journey; AiPharma will help fuel strategic growth and deliver future pipeline and M&A activities so that even more patients can access critical medicines and technologies now and in the future."

The description of the proposed transaction contained herein is only a high-level summary. Additional information about the proposed transaction, including a copy of the share exchange agreement, will be provided in a Current Report on Form 8-K to be filed by Aditxt with the Securities and Exchange Commission ("SEC") and available at the SEC's website at www.sec.gov. In addition, Aditxt intends to file a registration statement on Form S-4 with the SEC, including a proxy statement/prospectus, and will file other documents regarding the proposed transaction with the SEC.

The definitive agreement follows Aditxt's prior announcement on August 25, 2021, of its intention to acquire AiPharma and Aditxt's bridge loan funding to AiPharma, subject to certain closing conditions. There is no assurance that Aditxt's acquisition of AiPharma will be completed.