BCTX - BriaCell plans spin-out of some pre-clinical assets into new entity

2023-03-30 10:20:27 ET

BriaCell Therapeutics ( NASDAQ: BCTX ) is planning a reorganization under which it intends to spin-out certain pre-clinical assets to an unlisted corporation to own the SpinCo Assets (SpinCo).

The SpinCo Assets include Bria-TILsRx and PKC? inhibitors for multiple uses including cancer.

The company expects that SpinCo Assets will be majority-owned and governed by BriaCell and owned by BriaCell shareholders who will receive SpinCo Shares.

On closing, it is expected that each BriaCell share will be exchanged for one new stock of the post-transaction company and one common share of SpinCo (a SpinCo Share).

SpinCo Shares issued to BriaCell shareholders will consist of 33.33% ownership of SpinCo Shares. Meanwhile, BriaCell will retain SpinCo Shares representing 66.67% ownership of SpinCo.

BriaCell shareholders who receive SpinCo Shares will ultimately own shares in both companies.

BriaCell believes that the transaction will allow capital markets to ascribe value to SpinCo Assets independently of BriaCell's core immunotherapy assets.

BriaCell said it will focus on developing targeted immunotherapies for cancer, while SpinCo will focus on developing the SpinCo Assets.

"Developing them under a separate entity allows us to unlock the development potential of the SpinCo Assets as novel treatments for multiple diseases under a separate balance sheet, allowing for maximizing both entities to maintain their focus, while providing our shareholders the opportunity to own shares in both companies," said BriaCell's President and CEO William Williams.

SpinCo may seek funding and will plan to use the majority of money to advance its assets, according to the company.

BriaCell's President and CEO William Williams will serve as  President and CEO of SpinCo, while Gadi Levin will take up the role of CFO.

SpinCo's board of directors will consist of BriaCell's current board members William Williams, Martin Schmieg, and Jane Gross.

After the transaction, BriaCell will remain listed on both  Nasdaq and the Toronto Stock Exchange, while SpinCo will become an unlisted reporting issuer in Canada.

The transaction, which will be implemented by way of a court approved plan of arrangement, will need approval of 66.67% of votes cast by BriaCell's stockholders, among other things.

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