Preliminary proxy filed for proposed Redx acquisition and related financings
Skye Bioscience has entered an agreement to acquire all issued and to-be-issued share capital of Redx Pharma Limited through a UK scheme of arrangement and filed a preliminary proxy seeking the stockholder approvals required for the change-of-control transaction. At the assumed 0.0892 exchange ratio, pre-transaction Skye holders are expected to own approximately 5.38% of the combined company; if Skye's valuation falls to the $2.0 million floor, the ratio would be 0.6496 and that ownership would decline to approx...
Key takeaways
Transaction structure: Skye will acquire the entire issued and to-be-issued share capital of Redx through a court-sanctioned UK scheme of arrangement.
Stockholder approvals: A special meeting will consider five proposals; approval of the Transaction, Share Issuance and Articles proposals is required to complete the deal.
Ownership dilution: Pre-transaction Skye holders are expected to own 5.38% of the combined company at a 0.0892 exchange ratio, or 0.78% if the $2.0 million valuation floor applies and the ratio becomes 0.6496.
Share issuance: Skye expects to issue approximately 109,218,976 shares under the base case or 794,079,692 under the valuation-floor case, before the proposed reverse stock split.
Transaction financing: The PIPE has $67.9 million of commitments that may increase to $72.9 million; the ELOC can provide up to $22.0 million, and Redx issued $36.0 million of Series A shares.
Combined company: The business would be renamed Fibrx Therapeutics, Inc., expected to trade as FBRX, and led by Redx management and a seven-member Redx-designated board.
Pipeline: RXC008 is a GI-restricted pan-ROCK inhibitor for fibrostenotic Crohn's disease with an open U.S. IND, FDA Fast Track designation and a planned Phase 2 trial.
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