Layton Mills' company CannPal Animal Therapeutics (ASX: CP1) may be the target in a scrip-based acquisition from medicinal cannabis industry peer AusCann Group (ASX: AC8), but that doesn't mean he'll be cashing in and walking out the door when the deal is done.
Far from it in fact, as AusCann announced today that Mills would be managing director of the combined company once the transaction is completed, following a recent meeting between the boards of both companies.
Perth-based AusCann's CEO Nick Woolf has decided to tender his resignation, but will stay on as interim CEO until the merger takes place and after that in an advisory capacity to support the transition.
The merger still depends on a vote for the scheme of arrangement, which is due to take place in the first quarter of this year.
When the acquisition was announced in November it was worth around $17.5 million, but a combination of optimism about the deal and medicinal cannabis market prospects in Australia and the US have pushed that value closer to $20 million.
"We're now essentially at the precipice with some of our lead product candidates, particularly our DermaCann product - the recent study we did in dogs with atopic dermatitis, that was really the last piece of the product dossier that's been in development for two or three years," Mills told Business News Australia when the deal was announced last year.
"We're now at the stage where we're talking with multiple top 10 leading animal health partners to commercialise that product in a number of different countries, which is really exciting," added Mills, who was a finalist in the Sydney Young Entrepeneur Awards 2020 and featured in last year's Australia's Top 100 Young Entrepreneurs list.
Mills was also positive for the potential of applying CannPal's expertise in veterinary health for AusCann's human health business, and vice versa.
This sentiment was echoed by outgoing Auscann CEO Nick Woolf today.
"The combination of AusCann and CannPal has clear synergies including multiple revenue streams and the leverage of data in the animal health space for the development of human medicines and vice versa," Woolf said.
"Both companies have established a strong network of alliances that should accelerate success. I look forward to working with Mr Mills during his onboarding and supporting the acquisition and implementation over the next six months.
"I believe that the medicinal cannabis industry in Australia has significant growth potential and the combined company will be well placed to benefit from this."
AusCann chairman Max Johnston said since joining in August 2020 Woolf had been instrumental in advancing studies for existing hard-shell capsules based on the Neuvis platform, kicking off ormulation work of a novel CBD-variant, and engaging an experienced US-based team to develop additional product candidates that address unmet health needs.
"In addition to this, Nick has also taken significant steps toward making AusCann more cost effective and efficient in utilisation of its assets and operations," says Johnston.
"We thank him for all his efforts in taking AusCann forward during his tenure whilst also progressing the proposed acquisition of CannPal. I am pleased that Nick has agreed to provide continuity during the prospective transition and wish him well in his future endeavours."
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