SciSparc Signs Non-Binding Letter of Intent for Spin Off of Advanced Clinical Stage Pharmaceutical Portfolio to Publicly Traded Company
SciSparc announced signing a non-binding letter of intent (LOI) to spin off its advanced clinical-stage pharmaceutical portfolio and equity stake in SciSparc Nutraceuticals to Miza III Ventures. Valued at $11.6 million, the assets will be exchanged for 63.3 million Miza shares and up to 48 million contingent rights. The deal's final terms will determine SciSparc's controlling stake in Miza, estimated between 75% and 84.53%. The transaction aligns with SciSparc's strategy to enhance shareholder value and follows a merger agreement with AutoMax Motors. Key portfolio assets include SCI-110 for Tourette syndrome and Alzheimer's disease, and SCI-210 for autism.
- SciSparc's assets are valued at approximately $11.6 million.
- SciSparc will acquire a controlling stake in Miza, between 75% and 84.53%.
- The transaction supports SciSparc's strategy to create shareholder value.
- The agreement is non-binding, leaving uncertainty in the deal's finalization.
- Completion of asset transfer is contingent on pre-determined milestones.
Insights
The spin-off of SciSparc’s advanced clinical stage pharmaceutical portfolio to Miza III Ventures Inc. presents several financial implications for investors. The valuation of SciSparc’s assets at approximately
Short-term, the transaction might cause some volatility in SciSparc’s stock price as investors digest the implications of the spin-off. Long-term, the strategy aligns with creating value by focusing on specific sectors (pharmaceuticals and supplements), potentially leading to a more streamlined and efficient operation.
It’s important to note that the agreement is non-binding, meaning terms can still change. Investors should monitor the final definitive agreement for any alterations that could impact the expected benefits.
This spin-off can significantly impact SciSparc’s position in the pharmaceutical market. By transferring advanced clinical stage assets to a new entity, SciSparc is effectively creating a specialized unit that could focus more closely on the development and commercialization of its therapies. The strategic move could enhance focus and operational efficiency, potentially accelerating the time to market for their central nervous system disorder treatments.
Furthermore, holding a majority stake in the resulting entity could allow SciSparc to benefit from any future successes without bearing the full operational burden. This structure is advantageous if the assets reach commercialization, as it might attract more specialized investment and talent to the new entity.
For retail investors, it's essential to consider the potential increase in value from the spin-off, balanced against the risks associated with the developmental stage of the pharmaceuticals involved.
The spin-off's impact on SciSparc’s pharmaceutical portfolio is noteworthy, especially concerning the clinical trials of SCI-110 and SCI-210. The dedicated focus on these assets could mean more resources and attention for their development, which is vital given the complex nature of treating central nervous system disorders such as Tourette syndrome, Alzheimer’s disease and autism.
The phase IIb clinical trial for SCI-110 and the commencement of phase II for SCI-210 are at important junctures where additional investment and specialized management could significantly increase the likelihood of successful outcomes. Positive advancements in these trials could lead to substantial value creation.
Investors should be aware of the inherent risks of clinical trials, including potential delays and the outcomes that may differ from expectations. Hence, while the spin-off strategy seems promising, it’s grounded in the assumption that the clinical trials will progress as anticipated.
According to the agreement, SciSparc’s pharmaceuticals assets are valued at approximately
TEL AVIV, Israel, July 08, 2024 (GLOBE NEWSWIRE) -- SciSparc Ltd. (Nasdaq: SPRC) (“Company” or “SciSparc”), a specialty clinical-stage pharmaceutical company focusing on the development of therapies to treat disorders and rare diseases of the central nervous system, announced today it signed a non-binding letter of intent (the “LOI”) to spin off its advanced clinical stage pharmaceutical portfolio and its equity stake in SciSparc Nutraceuticals Inc. (collectively, the “Target Assets”). The LOI references a proposed asset and share purchase agreement (the “Agreement”), the definitive agreement of which is to be negotiated between the Company and Miza III Ventures Inc. (“Miza”) (TSXV: MIZA.P), a publicly traded company on the Toronto Stock Exchange Venture in Canada.
The Agreement is based on the approximate total USD 3.3 million (CAD 4.5 million) enterprise value of Miza, when including its USD 1.0 million cash position, and an approximate USD 11.6 million (CAD 15.8 million) value of SciSparc’s assets.
Pursuant to the LOI, SciSparc will sell, assign, convey and transfer to Miza the Target Assets in consideration for 63,300,000 common shares of Miza and up to 48,000,000 Miza contingent rights based on pre-determined milestones. Following the closing of such transaction, SciSparc would hold a controlling interest in Miza, the exact percentage of which is contingent on agreeing definitive terms between the parties. The resulting entity, of which SciSparc will hold a stake in the resulting entity ranging from a minimum of approximately
The Agreement aligns with SciSparc's strategy of creating value for its shareholders and follows the merger agreement and transaction concerning AutoMax Motors Ltd., as previously announced by SciSparc on April 11, 2024.
SciSparc’s pharmaceutical portfolio includes SCI-110 for treating persons with Tourette syndrome, which is subject to a phase IIb clinical trial, SCI-110 for treating persons with Alzheimer’s disease, the phase II clinical trial of which has been completed, and SCI-210 for treating children with autism, subject to a randomized, double-blind and placebo-controlled trial that commenced in the first quarter of 2024.
About SciSparc Ltd. (Nasdaq: SPRC):
SciSparc Ltd. is a specialty clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists. SciSparc’s focus is on creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the Company is currently engaged in the following drug development programs based on THC and/or non-psychoactive CBD: SCI-110 for the treatment of Tourette syndrome, for the treatment of Alzheimer's disease and agitation; SCI-160 for the treatment of pain; and SCI- 210 for the treatment of ASD and status epilepticus. The Company also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seed oil-based products on the Amazon.com Marketplace.
Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. For example, SciSparc uses forward-looking statements when it discusses the proposed Agreement and the prospective resulting controlling interest of SciSparc in Miza. The Company may not enter into or complete a definitive agreement for the proposed transaction with Miza or, even if it does, it may not create shareholder value. Because such statements deal with future events and are based on SciSparc's current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of SciSparc could differ materially from those described in or implied by the statements in this press release. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including those discussed under the heading "Risk Factors" in SciSparc's Annual Report on Form 20-F, as amended, filed with the SEC on April 1, 2024, and in subsequent filings with the U.S. Securities and Exchange Commission. Except as otherwise required by law, SciSparc disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date they were made, whether as a result of new information, future events or circumstances or otherwise.
Investor Contact:
IR@scisparc.com
Tel: +972-3-6167055
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