Incannex to acquire US biotech for $124 million

Melbourne-based pharmaceutical company Incannex (ASX: IHL) is in a US$93.3 million (AUD$124 million) deal to acquire a US biotech outfit with intellectual property (IP) in the medicinal cannabis space. 

Incannex, which is developing medicinal cannabis products of its own, hopes to benefit from target APIRx Pharmaceutical USA’s 22 active clinical and pre-clinical research and development projects aiming to treat a variety of diseases, illnesses and disorders.

The move comes not even a month after Incannex landed on the Nasdaq under the ticker symbol IXHL.

The acquisition is for the US arm of APIRx - a corporate entity initially established in the Netherlands to consolidate the IP of company co-founders Dr George Anastassov and Lekhram Changoer. Once the takeover is complete, the clinical researchers will join Incannex on a full-time basis. 

Incannex said the all-scrip deal will strengthen the dual-listed company’s position as a market leader in the cannabinoid and psychedelic treatment space, particularly with the acquisition of APIRx USA’s portfolio of IP with granted and pending patents.

The 22 active clinical and pre-clinical research projects are targeted at treating an extensive range of conditions including pain, dementia, Parkinson’s Disease, restless leg syndrome, gastrointestinal diseases, periodontitis, addiction disorders, skin conditions and ophthalmic conditions.

Incannex says APIRx USA’s patents related to medicated chewing gum (MCG) are of particular interest, noting a focus of the combined group will be the ongoing development of the target’s CheWell, CanQuit and CanQuit-O cannabinoid combination MCG to treat cannabis addiction, nicotine addiction and opioid addiction.

Ultimately, Incannex says the deal will expand its addressable market sizes by over $400 billion per annum, and enhance its technical and drug development capability by adding skilled scientists to the team.

“We believe that bringing together Incannex and APIRx will bolster our position as a leader in the medicinal cannabinoid sector and will further set IHL apart from other players in the industry,” Incannex CEO and managing director Joel Latham said.

“With sizeable addressable markets and intellectual property spanning a multitude of unmet medical needs, we’re positioning Incannex to be a significant player in the pharmaceutical sectors of the future.

“I’m excited by this acquisition opportunity on multiple fronts and look forward to working with the APIRx team to deliver on our vision of providing treatments which will make genuine differences to the lives of millions of people.”

APIRx co-founder Dr George Anastassov said he was delighted to partner with IHL.

“Both companies have proven track records to deliver innovative projects and the goal of this transaction to create the global leader in the cannabinoid, psychedelic, and combination pharmaceuticals space," Dr Anastassov said.

“We intend to do this by addressing conditions for which there are only modest, or no safe and effective, treatment options.”

IHL shareholder approval will now be sought for the deal, with shares in the company down 1.43 per cent to $0.69 per share at 11.23am AEDT.