Wednesday 22 June 2022

US-based Pasithea Therapeutics Corp. (NASDAQ: KTTA) has acquired preclinical-stage company Alpha-5 integrin, LLC, which is developing a monoclonal antibody for the treatment of amyotrophic lateral sclerosis and other neuroinflammatory disorders, such as Multiple Sclerosis, the company said.

Alpha-5's lead therapeutic candidate has a novel mechanism of action with the potential to improve clinical outcomes in patients with ALS, and is supported by post-mortem studies and with reproducible significant improvement in behavior and survival in the SOD1 mice model.

The acquisition includes Alpha-5 proprietary antibodies with novel intellectual property and brings to Pasithea a group of seasoned scientists and a state-of-the-art laboratory.

The company acquired all of the outstanding equity interests in Alpha-5 at an enterprise value for USD 3.75m, payable in 3.26m shares of Pasithea common stock, valued at USD 1.15 per share, an 11% premium to the closing price on June 21, plus 1 m warrants.

An entity controlled by Paul B. Manning, chairman and CEO of PBM Capital, a healthcare-focused investment firm, is Alpha-5's majority owner and, following the transaction, will own approximately 10% of Pasithea common stock. Cassel Salpeter and Co. acted as financial advisor to the company on this transaction.

At the closing of the transaction, the company acquired all of Alpha-5's issued and outstanding equity interests in exchange for 3,260,870 shares of Pasithea common stock plus warrants to acquire an additional 1m shares at an exercise price of USD 1.88 per share for a period of five years.

The number of shares was calculated by dividing a USD 3.75m enterprise value by USD 1.15 per share of Pasithea common stock, an 11% premium to the closing price on June 21. There are potential future earnouts based on net sales.

There will be no post-closing adjustments for cash and working capital, the company said.