Shares of Acer Therapeutics (ACER) surged 43% on Friday. Investors are anticipating a possible merger with Relief Therapeutics (OTC:RLFTF, EBS: RLF.SW).
Last week, Relief Therapeutics announced that it has received a CHF 10 million private placement, this amounts to around $10.7 million. According to the announcement, the net proceeds will be used to acquire additional assets to expand and diversify their drug pipeline for general corporate purposes.
This financing provides us with significant additional flexibility. We are taking important steps, beginning with the option agreement with Acer Therapeutics, to grow and broaden our pipeline. At the same time, we look forward to the long-term results from the ongoing U.S. trial in critical COVID-19 with our core asset, RLF-100, and to taking the next steps in its development.Jack Weinstein, Chief Financial Officer 🧬 Relief Therapeutics
The private placement shares, trading on the SIX Swiss Exchange and ranking pari passu (carrying the same rights) with Relief’s existing shares, were delivered from Relief’s treasury shares that were issued out of its authorized share capital under exclusion of the existing shareholders’ pre-emptive rights.
Interestingly, 5 days before the private placement the company has increased share capital with creation of treasury shares.
The release states, “Relief Therapeutics a biopharmaceutical company with its lead compound RLF-100TM (aviptadil) in advanced clinical development to treat severe COVID-19 patients, today announced that its Board of Directors approved an increase of the Company’s registered share capital from 3,246,727,248 to 3,371,727,248 shares through the issuance of 125,000,000 shares at an issue price of CHF 0.01. The 125,000,000 new shares, to be issued out of the Company’s authorized capital, are fully subscribed for by Relief Therapeutics International SA, its 100% wholly owned subsidiary, and will be listed on the SIX Swiss Exchange on or around March 11, 2021. Execution of the transaction will provide Relief with treasury shares, offering greater financial flexibility to raise funds in an efficient manner and in line with its equity plans for the Company and its subsidiaries.”
Investors anticipate Relief Therapeutics to merge with Acer Therapeutics
With the raising of funds through private placement and increase of share capital, many investors are expecting Relief Therapeutics to acquire Acer Therapeutics.
Two months ago, Acer and Relief entered into an option agreement for exclusivity to negotiate a collaboration and license agreement for the worldwide development and commercialization of ACER-001.
Under the terms of the Option Agreement, Acer will receive from Relief a $1 million non-refundable payment in return for exclusivity until June 30, 2021 to negotiate and enter into a definitive collaboration and license agreement between Acer and Relief for the development of ACER-001. Further, in connection with entering into the Option Agreement, Relief will make a $4.0 million loan to Acer. The loan, which will be secured by a lien on all of Acer’s assets, will bear interest at the rate of 6% per annum and will be due in one year.