The9 Signed a Definitive Share Purchase Agreement to Invest in GenAI LLM Digital Precision Medicine Platform for Brain Disease WM Therapeutic

Rhea-AI Summary

The9 (NCTY) has signed a definitive agreement with WM Therapeutic to purchase additional shares, totaling 30% ownership. The agreement includes cash payment and issuance of restricted shares. WM Therapeutic focuses on GenAI large language model brain disease screening platform and AI drug clinical research platform.

Insights

Financial Analyst

The agreement between The9 and WM Therapeutic represents a strategic investment move, signifying The9's deeper foray into the healthcare tech sector. The financial commitment of $1.5 million in cash and a substantial issuance of restricted shares underscores the importance The9 places on this venture. The lock-up conditions tied to market capitalization milestones indicate a performance-based confidence in The9's growth trajectory. Investors should note, however, that such share-based transactions can dilute existing shareholder value. An increase in outstanding shares typically leads to earnings per share (EPS) reduction unless the investment significantly boosts The9's profitability. The potential release of shares upon a qualified IPO of WM Therapeutic or The9 acquiring a majority stake could further impact the stock's liquidity and volatility.

Biotech Market Analyst

WM Therapeutic's focus on AI-driven precision medicine for central nervous system diseases taps into a growing market need for innovative healthcare solutions. The use of GenAI, multi-omics and brain-computer interface technologies positions WM Therapeutic at the forefront of personalized medicine. The strategic investment by The9 could be seen as a move to diversify its portfolio into a high-growth industry. For stakeholders, the collaboration with established pharmaceutical and insurance companies and inclusion in the Johnson & Johnson JLab family, are indicators of WM Therapeutic's industry validation and potential for successful commercialization. However, the biotech industry is known for its high R&D costs, regulatory hurdles and long development timelines, which could pose risks to The9's investment returns.

Healthcare Investment Advisor

The9's investment in WM Therapeutic aligns with the burgeoning trend of tech companies investing in healthcare innovation, particularly in AI and digital health. The multi-stage clinical pipeline addressing a range of neurological disorders presents diverse opportunities for The9. However, the success of this investment hinges on WM Therapeutic's ability to navigate the complex regulatory environment, achieve clinical efficacy and ultimately bring products to market. The potential benefits of AI in reducing drug development costs and timelines could be a game-changer, yet the actualization of these benefits remains uncertain until proven in a real-world setting. Investors should weigh the potential long-term gains against the inherent risks of the biotech sector.

SHANGHAI, March 26, 2024 /PRNewswire/ -- The9 Limited (Nasdaq: NCTY) ("The9"), an established Internet company, today announced that it signed a definitive share purchase agreement (the "Agreement") with WM Therapeutic Co., Ltd. ("WM Therapeutic"), a company operating Generative AI (GenAI) large language model (LLM) multi-dimensional and multi-omics digital precision medicine platform for brain disease, to purchase an additional 21.7% shares of WM Therapeutic by cash and issuance of The9's restricted shares. The9 had invested 8.3% shares of WM Therapeutic in 2021. With the signing of this Agreement, The9 will own 30% of WM Therapeutic. The9 is also granted a purchase option to purchase up to 51% of the total shares of WM Therapeutic under certain conditions.

WM Therapeutic develops GenAI large language model brain disease screening platform and digital human personalized psychological consultant, AI precision diagnostic equipment, personalized neuromodulation treatment equipment, Generative AI large language model and AI drug clinical research platform. These products are based on AI multi-dimensional omics data analysis technology, original drug discovery technology and brain-computer interface research technology, cohort research on millions of brain diseases, multi-dimensional omics database, constructing brain disease digital targets and digital pathology models and individual characteristics to achieve clinical precision diagnosis and treatment of central nervous system diseases.

Pursuant to the Agreement, The9 will pay cash consideration of US$1.5 million and will issue 251,290,500 restricted Class A ordinary shares (equivalent to 837,635 ADSs) to WM Therapeutic. The restricted Class A ordinary shares to be issued to WM Therapeutic will be subject to lock-up conditions and will only be released according to the following schedule: (i) when the market capitalization of The9 reaches US$200 million, 4,737,000 Class A ordinary shares (equivalent to 15,790 ADSs) of The9 will be released from the lock-up; (ii) when the market capitalization of The9 reaches US$500 million, 1,894,800 Class A ordinary shares (equivalent to 6,316 ADSs) of The9 will be released from the lock-up, and (iii) when the market capitalization of The9 reaches US$1 billion, 947,400 Class A Ordinary shares (equivalent to 3,158 ADSs) of The9 will be released from the lock-up. The rest of the restricted shares shall be released from the lock-up when either of the following conditions are met: WM Therapeutic completes a qualified IPO and its shares owned by The9 become freely tradable in the open market; or if and when the The9 exercises its super pro-rata right and, as a result, holds a minimum 51% of the then total share capital of WM Therapeutic.

"Currently, in response to the huge unmet clinical needs, our pipeline under development covers depression, anxiety, Alzheimer's disease, bipolar disorder, autism, attention deficit and hyperactivity disorder, and sleep disorders, etc. Our development pipeline for each disease is at different clinical stages. We have established partnerships with world-renowned pharmaceutical companies and insurance companies. As a member of the Johnson & Johnson JLab family, we use the WM-AI drug clinical research platform to assist in the development of new central nervous system drugs. As a WM-digital companion diagnostics product, it helps clarifying disease subtypes, improving the success rate of clinical trials, reducing the cost of new drug development and shortening the time to market for pipelines under development," said Ms. Yan Gao, Founder and CEO of WM Therapeutic.

Safe Harbor Statement

This current report contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond The9's control. The9 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about The9's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: The9's goal and strategies; The9's expansion plans; The9's future business development, financial condition and results of operations; The9's expectations regarding demand for, and market acceptance of, its products and services; The9's expectations regarding keeping and strengthening its relationships with business partners it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in The9's filings with the SEC. All information provided in this current report is as of the date hereof, and The9 does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

The9 Limited
17 Floor,
No. 130, Wu Song Road,
Hong Kou District,
Shanghai 200080, PRC

About The9 Limited

The9 Limited (The9) is an Internet company listed on Nasdaq in 2004. The9 aims to become a global diversified high-tech Internet company, and is engaged in blockchain business including the operation of cryptocurrency mining. The9 is also stepping into AI application business in different industries.

 

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SOURCE The9 Limited

FAQ

What is the ticker symbol for The9 ?

The ticker symbol for The9 is NCTY.

What percentage of WM Therapeutic shares will The9 own after the agreement?

After the agreement, The9 will own 30% of WM Therapeutic shares.

What technologies does WM Therapeutic focus on?

WM Therapeutic focuses on GenAI large language model brain disease screening platform, AI drug clinical research platform, and more.

What payment methods are included in the agreement between The9 and WM Therapeutic?

The agreement includes a cash payment of US$1.5 million and issuance of 251,290,500 restricted Class A ordinary shares to WM Therapeutic.

Who is the Founder and CEO of WM Therapeutic?

Ms. Yan Gao is the Founder and CEO of WM Therapeutic.