The acquisition leverages in-house medical research expertise, which will reduce pre-clinical lead times, provide the opportunity to better define clinical trial protocols and forge stronger relationships with regulators in the future.
() () () () acquires MediCaNL Inc, an Israeli company providing specialist services worldwide to the pharmaceutical industry for the development of new drugs.
MediCaNL offers clinical and preclinical trial services as well as clinical trial support in the form of research data from previous studies of all phases I to IV using a variety of treatment methods.
The terms of the transaction include consideration of A $ 6 million in MXC shares, 30% on settlement and 70% in installments as deferred consideration, upon shareholder approval.
Upon completion of the acquisition, MediCaNL will design, manage and execute all clinical trials for MGC Pharma in accordance with the European Medicines Agency, Federal Drug Administration, ICH Good Clinical Practice and Israeli health regulations.
“Strategic acquisition removes red tape”
MGC Pharma Co-Founder and CEO Roby Zomer said: “The acquisition of MediCaNL is a strategically important and crucial moment in order to be able to realize our ambitious plans for MGC Pharma.
“By acquiring MediCaNL and bringing their services and expertise in-house, we have not only reduced the significant costs of our planned clinical trial expenses, but we have also removed much of the bureaucracy involved in the trial process. preclinical and clinical.
“MediCaNL is led by some of the world’s most renowned physicians and scientists, who will be a valuable asset to the MGC Pharma team.
“They operate at the highest levels of quality and integrity, allowing MGC Pharma to build and maintain stronger relationships with regulators in the years to come as we expand our product line and do more. ‘clinical tests. “
The acquisition of MediCaNL should enable MGC Pharma to realize immediate cost savings.
Normally, MGC would pay significant fees to a third party vendor to manage and operate its clinical trial program, but MediCaNL will become an internal business unit operating at cost only for MGC Pharma.
This will eliminate retail operating margins paid to third-party CRO vendors on all future clinical trials, as MGC Pharma will be undertaking multiple clinical trials in 2021/22 and into the years ahead.
Shares of the company, which have a market capitalization of around A $ 137 million, rose 7% to A $ 0.064.
MediCaNL CEO Dr Nadya Lisodover, who has worked with MGC Pharma for the past two years, guiding its clinical trials and providing regulatory advice as a CRO consultant to the company, will work full time for MGC Pharma as as director of research to streamline and improve the profitability of the company’s clinical trials process.
Notably, in 2020, MediCaNL generated almost $ 1 million in revenue, with a profit margin of 25%.
MediCalNL clients and projects
MediCaNL worked on seven New Investigational Products (INP) in collaboration with the FDA, two having been approved and four ongoing – highlighting their experience with pharmaceutical regulators around the world.
Currently, MediCaNL has 11 clients, excluding MGC Pharma, and is working on 40 different projects and clinical trials.
MediCaNL will provide expert regulatory and preclinical knowledge, including 18 years of research management experience, which MGC Pharma will leverage in the future.
Important trading conditions
The consideration for the acquisition is AU $ 6 million in MXC shares, based on the volume-weighted average price per share of the company calculated on a 10-day VWAP from settlement, with 30% of the shares of consideration to be issued upon settlement and the remaining 70% to be issued in installments (deferred consideration) as follows (subject to shareholder approval):
- 20% on the date that is four months from the date of settlement;
- 20% on the date that is seven months from the date of settlement;
- 20% on the date which is 10 months from the date of settlement; and
- 10% on the date which is 13 months from the date of settlement.
The company will seek shareholder approval for the issuance of the deferred consideration at a future meeting of shareholders.
Long-term growth strategy
This acquisition will allow MGC to accelerate the process of bringing drugs and products to market by increasing its processing capacity and making clinical trial performance and design an outsourced business.
This will also lead to continued cost savings, as MGC will undertake one Phase III clinical trial and two Phase II clinical trials for CannEpil, CogniCann and CimertA in 2021, as well as two Phase I clinical trials scheduled for the second half of 2021. .
MediCaNL also offers a number of clear operational and strategic opportunities, which allows the company to accelerate the implementation of its long-term growth strategy.
- Streamline the clinical trial process saving time and costs;
- Leverage existing expert relationships to significantly strengthen internal expertise and capacity; and
- Foster better relationships with regulators around the world.
This will advance MGC’s ongoing clinical research and provide an accelerated and more streamlined route to commercialization for the company’s proprietary IMPs.