MGC Pharmaceuticals Ltd to acquire worldwide clinical and medical research
The acquisition leverages the medical research expertise in-house which will reduce preclinical lead times, provide the ability to better define clinical trial protocols and build stronger relationships with regulators moving forward.
() () () () is acquiring MediCaNL Inc, an Israeli company providing specialist services worldwide to the pharmaceutical sector for the development of new medicines.
MediCaNL offers clinical and preclinical trial services as well as assistance with clinical trials in the form of research data from past studies of all Phase I to IV using a variety of treatment methods.
Transaction terms include consideration of A$6 million in MXC shares, 30% on settlement and 70% in instalments as deferred consideration, following shareholder approval.
On completion of the acquisition, MediCaNL will design, manage and run 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 managing director Roby Zomer said: “The acquisition of MediCaNL is a strategically important moment and is crucial in being able to deliver on our ambitious plans for MGC Pharma.
“By acquiring MediCaNL and bringing their services and expertise in-house, we not only cut significant costs from our forecasted clinical trial expenditure but also remove much of the red tape involved in the preclinical and clinical trial process.’
“MediCaNL is led by some of the world’s most renowned doctors and scientists who will be a great asset to the MGC Pharma team.
“They operate at the highest levels of quality and integrity, enabling MGC Pharma to establish and nurture stronger relationships with regulators in the years to come as we expand our suite of products and undergo more clinical trials.”
Cost savings
The MediCaNL acquisition is expected to deliver immediate cost savings to MGC Pharma.
Normally, MGC would pay a significant fee to a third-party provider to manage and operate its clinical trial program, but MediCaNL will become an internal business unit running at cost only for MGC Pharma.
This will eliminate the retail operating margins being paid to third party CRO providers on all future clinical trials, as MGC Pharma will be undertaking multiple clinical trials in 2021/22 and in future years.
Shares of the company, which has a market cap of approximately A$137 million, have been as much as 7% higher to A$0.064.
MediCaNL CEO Dr Nadya Lisodover, who has been working with MGC Pharma over the past two years, guiding its clinical trials and offering regulatory advice as a consultant CRO to the company, will work full-time for MGC Pharma as chief research officer to streamline and improve the cost-effectiveness of the company’s clinical trial process.
Notably, in 2020, MediCaNL generated revenues of almost $1 million, with a profit margin of 25%.
MediCalNL clients and projects
MediCaNL has worked on seven Investigational New Products (INP) in conjunction with the FDA, two having been approved and four ongoing – highlighting their experience with the pharmaceutical regulators worldwide.
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 going forward.
Material transaction terms
The consideration for the acquisition is A$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 consideration shares to be issued at settlement and the remaining 70% to be issued in instalments (deferred consideration) as follows (subject to shareholder approval):
- 20% on the date which is four months…
Read More: MGC Pharmaceuticals Ltd to acquire worldwide clinical and medical research