Gleneagle targets biotech

09/12/2015 - 10:49

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Gleneagle Gold will make a second attempt at a reverse takeover with plans to buy a local unlisted medical cannabis company in a deal worth about $8 million.

Gleneagle targets biotech

Gleneagle Gold will make a second attempt at a reverse takeover with plans to buy a local unlisted medical cannabis company in a deal worth about $8 million.

Under the terms of the deal, Gleneagle will wholly acquire Zelda Therapeutics in exchange for 1.6 billion shares at a price of 0.5 cents each, and will adopt its target’s business model.

Biotech company Zelda plans to conduct human clinical trials on the effectiveness of cannabis-based formulations for treating conditions such as eczema, acne and post-burn itch.

As part of the acquisition, Gleneagle will be required to complete a minimum $3 million capital raising at a price yet to be determined, in order to comply with ASX relisting rules.

Current Gleneagle directors will resign once the deal is compelted, to be replaced by Zelda's current board, led by executive chairman and experienced biotech executive Harry Karelis.

Other Zelda directors are CPS Capital executive Jason Peterson, Orthocell chairman Stewart Washer and California-based Mara Gordon, who is a co-founder of Aunt Zelda's.

Zelda has been granted exclusive, gloabal access to anecdotal treatment data generated by Aunt Zelda's over several years, and will use this to design a series of phase-2 human clinical trials.

Zelda has also partnered with local company AusCann, chaired by former federal politician and medical practitioner Mal Washer, who is also Stewart Washer's father.

AusCann seeks to become a licenced producer of medical cannabis.

The company hopes to be reinstated to the ASX by the end of March next year.

Its Gleneagle’s second try at leaving the resources industry via a backdoor listing, after a proposal to buy Melbourne-based unlisted biotech company Myostin Therapeutics for $2 million in March was canned in September.

Zelda isn’t the first medical cannabis company to attract the attention of a listed company looking to reinvent itself.

Odin Energy announced plans to buy local cannabis and hemp aggregator The Hemp Corporation in April, although that deal was cancelled in August. Odin is now pursuing a Singapore-based tech company.

Capital Mining was negotiating the purchase of US-based cannabinoid company Nutrawerx in March, but that deal was also shut down in August.

International Goldfields is still progressing its planned acquisition of hemp and cannabis biotech company Winter Garden Biosciences, with due diligence on the deal completed in August.

Medical marijuana company MMJ Phytotech listed on the ASX earlier this year after completing a $5.9 million IPO.

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