Phytotech completes merger

Perth-based medical cannabis company Phytotech Medical has completed its $20.7 million merger with Canada-based firm MMJ Bioscience and raised $4.8 million in an oversubscribed placement to sophisticated investors.

Under the terms of the transaction, Phytotech has issued 51 million shares to MMJ’s vendors, with an additional 17 million shares to be potentially issued conditional upon MMJ achieving certain milestones.

The $4.8 million capital raising, which was managed by Merchant Corporate Finance and APP Securities, will fund development of Satipharm, the European pharmaceutical arm of the company.

The board of the company has been restructured, with MMJ managing director Andreas Gedeon becoming managing director of the combined companies while the former Phytotech managing director Boaz Wachtel has stepped into the role of head of international business development.

Perth corporate lawyer Peter Wall remains chair of new company.

Mr Gedeon was keen to highlight the value that the merger brought about in terms of managing the complete supply chain.

“As a combined group, the company now has operations across the entire medical cannabis value chain, from growing the raw product to the end user product, making us a true ‘farm to pharma’ business,” he said.

The group now consists of three subsidiaries: United Greeneries located in Canada; the Swiss pharmaceutical company Satipharm; and Israel-based Phytotech Therapeutics.

United Greeneries will manage cultivation of the plant, Satipharm will be the group’s pharmaceutical and nutraceutical processer, while Phytotech Therapeutics will focus on clinical development.

Phytotech shares were today trading higher, with a 4.4 per cent increase to 35.5 cents a share at 10am Perth time.