InMed Pharmaceuticals To Acquire BayMedica, Rare Cannabinoid Manufacturer, For ~$3.66M

InMed Pharmaceuticals INM announced on Monday that it has entered into a definitive agreement to acquire BayMedica Inc., a private company that manufactures rare cannabinoids.

Once the agreement is completed, InMed could become a global leader in the manufacturing of rare cannabinoids as it combines BayMedica’s biology and chemical synthesis capabilities with its own manufacturing flexibility to select the most appropriate, cost-effective method based on the target cannabinoid and appropriate quality specifications for the desired market segment. 

"This is a transformative transaction for InMed. This acquisition gives us a breadth of synthetic cannabinoid manufacturing capabilities to deliver high quality, cost-effective rare cannabinoids for any segment of the market from consumer packaged goods (CPG) to prescription pharmaceuticals," Eric A. Adams, president and CEO of InMed said. "After initializing our research collaboration with BayMedica last November, it became evident that there are very clear synergies between our companies. BayMedica brings unparalleled cannabinoid manufacturing expertise in both chemical synthesis and biosynthesis together with industry veterans who have been pioneers in this space."

BayMedica’s CEO Shane Johnson agrees. 

"The entire BayMedica team is very excited to join InMed. We look forward to advancing our manufacturing systems together, enabling us to bring additional rare cannabinoids to the market, and to leverage our technology and IP to directly contribute to InMed’s clinical development pipeline. The timing of this acquisition is ideal given our plans for several high value product launches," Johnson said.

The definitive agreement follows a previously signed letter of intent announced on June 29, 2021. The transaction, which is subject to certain standard closing conditions, is expected to close in the coming weeks.

Terms of the deal: 
InMed will acquire 100% of BayMedica in exchange for 1.78 million InMed common shares, to be issued to BayMedica’s equity and convertible debt holders with any such issued InMed common shares being subject to a six-month contractual hold period. At current stock prices, the transaction would be valued at approximately $3.66 million.

The total number of InMed common shares issuable in the proposed transaction may be reduced in the event that BayMedica’s net liabilities exceed a negotiated threshold following completion of a financial review of BayMedica’s closing balance sheet. The agreement provides that 470,000 of the InMed common shares issuable on closing will be held in escrow, subject to cancellation, to satisfy certain potential post-closing indemnification and other claim(s) that InMed may have under the definitive agreement in the six-and twelve-month period following closing of the proposed transaction.

Price action:

InMed Pharmaceuticals' shares were trading down 1.44% at $2.06 per share at the time of this writing Monday mid-morning.

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