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PHILADELPHIA and VANCOUVER, British Columbia, March 30, 2023 (GLOBE NEWSWIRE) -- BriaCell Therapeutics Corp. (NASDAQ:BCTX, BCTXW))))) (TSX:BCT) ("BriaCell" or the "Company"), a clinical-stage biotechnology company specializing in targeted immunotherapies for cancer, announces today that its Board of Directors has unanimously approved a potential reorganization (the "Transaction") that would result in the spin-out of certain pre-clinical pipeline assets of the Company, specifically Bria-TILsRx™, and PKCδ inhibitors for multiple indications including cancer (collectively, the "SpinCo Assets") to an unlisted corporation to own the SpinCo Assets ("SpinCo"). On closing of the Transaction, it is anticipated that the SpinCo Assets will be majority-owned, controlled, and governed by BriaCell and owned by BriaCell shareholders of record who will receive SpinCo Shares as defined herein.
Dr. William V. Williams, BriaCell's President and CEO stated, "Housing the SpinCo Assets in a new corporate structure would be beneficial to both BriaCell shareholders and SpinCo shareholders as we believe there is significant independent value to be had from these assets. Developing them under a separate entity allows us to unlock the development potential of the SpinCo Assets as novel treatments for multiple diseases under a separate balance sheet, allowing for maximizing both entities to maintain their focus, while providing our shareholders the opportunity to own shares in both companies."
On closing of the Transaction, it is expected that each share of BriaCell will be exchanged for one new share of the post-Transaction Company and one common share of SpinCo (a "SpinCo Share"). SpinCo Shares issued to BriaCell shareholders will comprise 33.33% ownership of SpinCo Shares upon closing of the Transaction. BriaCell shareholders who receive SpinCo Shares will ultimately own shares in both companies: BriaCell, which will continue with its mission to develop targeted immunotherapies for cancer, and SpinCo, which will focus on the development of the SpinCo Assets. SpinCo may seek funding subsequent to the closing of the Transaction and will intend to use the majority of the proceeds to advance the development of the SpinCo Assets.
It is anticipated that the SpinCo Shares will be issued to BriaCell shareholders by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the "Act"). BriaCell will retain SpinCo Shares representing 66.67% ownership of SpinCo. It is intended that SpinCo will be managed by Dr. William V. Williams, as President and CEO, and Mr. Gadi Levin, as CFO. SpinCo's board of directors will consist of, BriaCell's current board of directors' members including Dr. William V. Williams, Mr. Martin E. Schmieg, and Dr. Jane A. Gross.
Following the Transaction, BriaCell will remain listed on both the NASDAQ Stock Market and Toronto Stock Exchange, and SpinCo will become an unlisted reporting issuer in Canada.
The Transaction will be implemented by way of a court approved plan of arrangement under the Act. The Transaction will require the approval of: (i) 66.67% of the votes cast by the holders of BriaCell's shares; and, if required, (ii) a simple majority of the votes cast by holders of BriaCell's shares after excluding votes from certain shareholders as required under Multinational Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, at a special meeting of BriaCell's shareholders to be held to consider the Transaction (the "Meeting"). In addition to shareholder approval, the Transaction is also subject to the receipt of court approval and other customary closing conditions for transactions of this nature.
Additional details of the Transaction will be included in an information circular to be mailed to shareholders of BriaCell in connection with the Meeting. Bennett Jones LLP is acting as Canadian legal advisor to the Company. Sichenzia Ross Ference LLP is acting as US legal advisor to the Company.
Strategic Rationale for the Transaction
BriaCell believes that the Transaction will increase shareholder value by allowing capital markets to ascribe value to the SpinCo Assets independently of BriaCell's core immunotherapy assets. SpinCo will provide an opportunity for SpinCo Assets to be funded and developed on their own.
