The Proposed Transaction is expected to provide Tetra:
- With the most robust Pharmaceutical and Natural Health Products (NHP) pipeline of any Cannabinoid company;
- With more pharmaceutical and natural health products;
- The ability to sell these products worldwide; and
- Access to Panag’s NHP portfolio which is not included in the present in-licensing agreement with Panag.Â
ORLEANS, Ontario, Nov. 06, 2018 — Tetra Bio-Pharma Inc., (“Tetra” or the “Company“),  a leader in cannabinoid-based drug discovery and development (TSX VENTURE: TBP) (OTCQB: TBPMF), today announced it has entered into a non-binding proposal (the “Proposal“) with the shareholders (the “Vendors“) of Panag Pharma Inc. (“Panag“) for the acquisition by Tetra of all of the issued and outstanding shares in the capital of Panag (the “Proposed Transaction“).  Panag is a Canadian-based life sciences company focused on the development of novel cannabinoid-based formulations for the treatment of pain and inflammation.  Panag has developed innovative and patented formulations for the treatment of ocular diseases and other pain conditions such as general neuropathic pain. Their significant formulation expertise in the wellness market will allow Tetra to expand its commercial operations.Â
Dr. Guy Chamberland, CEO and CSO of Tetra stated, “We are very pleased to announce this news to our shareholders. We have been working with Panag for over a year and as a combined entity we will have a robust product pipeline of cannabinoid derived drugs for development as prescription or OTC drugs. Tetra is not just acquiring assets and intellectual property, we are joining a group of world-renowned cannabinoid experts that will help take Tetra to the next level as a pharmaceutical company.â€
Panag will remain a separate subsidiary owned 100% by Tetra and will provide Tetra with additional discovery and early phase drug development capacity. With this robust product pipeline, Tetra intends to continue to implement its out-licensing program to generate additional revenues via upfront payments, milestone payments, and royalties and actively pursue the clinical development of lead products.
“Panag will bring Tetra Natural Health a unique pipeline of products, thereby strengthening our role as a key player in the cannabinoid wellness market,†said Richard Giguere, CEO of Tetra Natural Health. “We look forward to working with Panag to commercialize these products globally and expect to generate revenues from these products by Q4 2019 following completion of the acquisition.â€
According to Dr. Orlando Hung, a co-founder of Panag, “We are very excited to have the opportunity to continue our decades of cannabinoid research work and partner for commercialization with Tetra Bio-Pharma. The timing is perfect as there is an urgent need for non-opioid medications to treat pain and inflammation. We expect the Panag-Tetra Bio-Pharma combined portfolio of cannabinoid products to play a significant role in the management of pain and inflammation. We are particularly pleased to have the support of Tetra Bio-Pharma to advance the development and research of Panag cannabinoid products.â€
Pursuant to the Proposal, Tetra would acquire 100% of the issued and outstanding shares of Panag for an aggregate consideration of $12,000,000, on a debt-free basis and subject to customary post-closing adjustments. The purchase price would be payable by Tetra delivering to the Vendors, on the closing date of the Proposed Transaction, (i) $3,000,000 in cash and (ii) $9,000,000 payable in common shares of Tetra. The Proposal also contemplates the payment by Tetra to the Vendors of an aggregate amount of up to $15,000,000 in cash in milestone payments upon the achievement of operational targets associated with marketing approvals and commercialization of both human and veterinary drug products by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). The milestone payments would be accelerated in the event of a bankruptcy, insolvency, change of control or sale of all of the assets of Tetra.
Two of the Vendors, Bill Cheliak and Gregory Drohan, are non-arm’s length parties to Tetra within the meaning of the rules of the TSX Venture Exchange. Mr. Cheliak is the Chairman of the Board of Directors of the Company and Mr. Drohan is a Director of the Company. The Proposed Transaction will not result in the issuance of securities to non-arm’s length parties as a group as payment of the purchase price exceeding 10% of the number of outstanding shares of the Company on a non-diluted basis.
The Company expects that the Proposed Transaction will be completed by the end of the 2018 calendar year. 100% of the shareholders of Panag have signed the term sheet. Completion of the Proposed Transaction remains subject to a number of conditions, including the completion of a satisfactory due diligence investigation by Tetra, the negotiation of a definitive purchase agreement, the approval by Panag’s shareholders in accordance with the shareholders’ agreement of Panag, the receipt of all required regulatory approvals, including that of the TSX Venture Exchange and such other closing conditions as are customary in transactions of this nature.  There can be no assurance that such conditions will be satisfied and that the Proposed Transaction will be completed as described or at all.
About Tetra Bio-Pharma:
Tetra Bio-Pharma (TSX-V: TBP) (OTCQB: TBPMF) is a biopharmaceutical leader in cannabinoid-based drug discovery and development with a Health Canada approved, and FDA reviewed, clinical program aimed at bringing novel prescription drugs and treatments to patients and their healthcare providers. The Company has several subsidiaries engaged in the development of an advanced and growing pipeline of Bio Pharmaceuticals, Natural Health and Veterinary Products containing cannabis and other medicinal plant-based elements. With patients at the core of what we do, Tetra Bio-Pharma is focused on providing rigorous scientific validation and safety data required for inclusion into the existing bio pharma industry by regulators, physicians and insurance companies.
For more information visit: www.tetrabiopharma.com
About Panag Pharma:
Panag Pharma Inc. is a Canadian based bio-tech company focused on the development of novel cannabinoid-based formulations for the treatment of pain and inflammation. Panag believes that pain relief should be safe, non-addictive and above all; effective. The Panag Pharma team of PhD scientists and medical doctors are among the world’s leading researchers and clinicians in pain treatment and management. They bring a combined experience of over 100 years in research and clinical care of people dealing with chronic pain and inflammatory conditions. Panag’s current pipeline of pain relief products include formulations for the topical application to the skin, the eye and other mucous membranes. Recently approved by Health Canada and currently undergoing clinical trials, Panag Pharma’s Topical AOTC provides a new approach to the treatment of chronic pain and inflammation.
Source: Tetra Bio-Pharma
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking statements
Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding: the anticipated benefits of the Proposed Transaction for Tetra; completion and expected timing of the Proposed Transaction; whether the terms of the Proposed Transaction will be as described in this press release; whether the Proposed Transaction will be successful; the receipt of required regulatory approvals (including stock exchange) in respect of the Proposed Transaction)are forward-looking statements. Forward-looking statements are generally identifiable by use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company’s ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company to obtain sufficient financing to execute the Company’s business plan; competition; regulation and anticipated and unanticipated costs and delays, the success of the Company’s research and development strategies, including the completion of the Panag transaction,, the applicability of the discoveries made therein, the successful and timely completion and uncertainties related to the regulatory process including the applications for Orphan Drug Designation, the timing of clinical trials, the timing and outcomes of regulatory or intellectual property decisions and other risks disclosed in the Company’s public disclosure record on file with the relevant securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that cause results or events not to be as anticipated, estimated or intended. Readers should not place undue reliance on forward-looking statements. No definitive documentation has yet been signed by the parties and there is no certainty that such documentation will be signed. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.
For further information, please contact Tetra Bio-Pharma Inc.
