NEW YORK, JULY 26, 2019 – PRESS RELEASE – KBL Merger Corp. IV, a Special Purpose Acquisition Company (SPAC), has announced that it has executed a definitive business combination agreement for the merger of a wholly owned subsidiary of KBLM with CannBioRx Life Sciences Corp., a drug development company focused on treating inflammatory diseases.
The transaction is subject to the approval by KBLM's and CannBioRx's respective shareholders. There can be no assurance that the proposed transaction will be completed on the terms set forth in the definitive agreement, or at all.
CannBioRx has three synergistic programs that operate at the intersection of the biotech and cannabis industries:
- A clinical-stage program focused on the discovery and development of novel therapies to treat fibrosis. This fully enrolled Phase 2b program expects results in Dupuytren’s disease during the fourth quarter of 2020.
- A preclinical cannabinoid program focused on the development and commercialization of unique pharmaceutical-grade cannabinoids for arthritis, pain, diabetes and obesity.
- A preclinical program developing innovative, orally available therapies harnessing the brain’s nicotinic receptors to treat inflammatory diseases, such as ulcerative colitis, gout and multiple sclerosis.
“These three unique programs will enable us to efficiently target several key pathways in inflammation and capitalize on two decades of extensive scientific research on the relationship between cannabinoids and inflammation,” said Prof. Sir Marc Feldmann, founder and co-chairman of CannBioRx. “We believe that the use of synergistic combination therapies across our programs could be important for providing cost-effective healthcare in the future. We also believe that creating an entity and robust pipeline in each of its programs diversifies our risk. We are a global company comprised of senior scientists affiliated with Oxford, Stanford and Hebrew Universities. We intend to not only advance drug development and clinical trials for existing programs but also to identify new patent-protected compounds, including novel cannabinoids that expand our therapeutic impact in the industry.”
“Upon the completion of the transaction, we expect to be one of a limited number of NASDAQ-listed companies developing non-plant-touching, pharmaceutical-grade, non-psychoactive cannabinoids. These drugs are intended to provide safer, uniform dosing, according to regulatory agency standards,” added Dr. Marlene Krauss, CEO of KBLM, who will also assume the role of CEO of the combined company. “We believe that CannBioRx’s distinctive position is enhanced by the fact that the cannabinoid program is being developed in tandem with its other novel drug development programs that are also focused on inflammation. The programs range from pre-clinical programs to a program in a Phase 2b clinical trial. This could potentially provide us with a pipeline of drug candidates in sequential stages of development and addresses what we believe to be large untapped markets.”
The founders and co-chairmen of CannBioRx, Feldmann and Prof. Lawrence Steinman, will be charged with leading the drug development programs of the combined company. They both have significant expertise in developing new therapeutics that resulted in billion-dollar markets. Lasker awardee Feldmann performed groundbreaking work in discovering and developing anti-TNF (Tumor Necrosis Factor) therapy. The license of his patent to Centocor Biotech led to the development of Remicade1, and AbbVie licensed his patents for use with Humira2.
Additionally, Steinman’s work led to the development of Tysabri for treating multiple sclerosis and inflammatory bowel disease, which was sold to Biogen and currently generates approximately $2 billion in revenue. Steinman also founded Neurocrine Biosciences, which currently has a market capitalization of approximately $7.7 billion.
Dr. Jonathan Rothbard, CannBioRx’s chief scientific officer, was involved in establishing Amylin Pharmaceuticals, which was acquired by Bristol-Myers Squibb in 2012 for $7 billion. He was also involved in establishing the early-stage biotech companies ImmuLogic Pharmaceutical Corp, CellGate and Cardinal Therapeutics.
“We look forward to working with this stellar team in combination with our decades of expertise in financing, as well as growing and managing public and private companies,” concluded Krauss. “Our mission is to create value for our investors and new modalities of treatment that can potentially be effective in treating illnesses that affect millions of people. Our teams are working together to close the transaction in a timely manner.”
The stockholders of CannBioRx will receive, in the aggregate, a number of shares of KBLM based on a pre-money valuation of $175 million (with deductions for liabilities existing at the closing of the transaction in excess of $5 million divided by 10). The definitive agreement contains a closing condition requiring KBLM to have net tangible assets of at least $5 million after giving effect to any redemptions of KBLM common stock by the KBLM stockholders prior to the merger.
Upon the closing of the transaction, CannBioRx intends to establish the following leadership team:
- Prof. Sir Marc Feldmann, Co-Chairman of the Board of Directors – A renowned immunologist, Fellow of Royal Society, Member of the National Academy of Sciences USA, Crafoord Prize awardee and European inventor-of-the-year, he is an Emeritus professor at the University of Oxford and inventor of anti-TNF (Tumor Necrosis Factor) therapy, which is the world’s biggest selling drug class.3 With his team, he discovered and developed the advantages of targeting TNF, as well as using combination therapies. For his groundbreaking work, he was knighted by the Queen in U.K. and also received the Australian equivalent, Companion of Order of Australia.
- Prof. Lawrence Steinman, Co-Chairman of the Board of Directors – Professor of Neurology and Pediatrics at Stanford University. Prof. Steinman has been on the faculty at Stanford for 39 years, and his lab is dedicated to understanding the pathogenesis of autoimmune diseases, particularly multiple sclerosis. He was on the Board of Directors of Centocor, as well as received a B.A. from Dartmouth College and M.D. from Harvard Medical School. Prof. Steinman is an elected member of the National Academy of Sciences and National Academy of Medicine, and is the recipient of the Charcot Prize for Lifetime Achievement in Multiple Sclerosis and Cerami Prize for Translational Medicine.
- Dr. Marlene Krauss, President and Chief Executive Officer – Founder and Managing Director of three (3) KBL venture capital funds with institutional investors. Dr. Krauss was previously CEO and chairman of three (3) healthcare-oriented KBL SPACs and managed more than $1 billion in healthcare investments. She has decades of experience in acquiring, growing and selling more than 30 companies. She trained and practiced as a retinal surgeon and is a fellow of the American Academy of Ophthalmology. Dr. Krauss received a B.A. from Cornell University, M.D. from Harvard Medical School and M.B.A. from Harvard Business School.
- Dr. Jonathan Rothbard, Chief Scientific Officer – Responsible for helping to establish a variety of successful biotech companies, including Amylin Pharmaceuticals (acquired by Bristol-Myers Squibb in 2012 for $7 billion), ImmuLogic, CellGate and Cardinal Therapeutics. Dr. Rothbard completed his post-doctoral fellowship with Dr. Gerald Edelman at Rockefeller University and served as Head of the Molecular Immunology Laboratory at the Imperial Cancer Research Fund in London before returning to Stanford University.
- George Hornig, Chief Operating Officer and Acting Chief Financial Officer – Has more than 35 years of senior operating, banking and venture capital investment experience. He is the Chairman of KBL Merger Corp. IV and former Senior Managing Director and COO of PineBridge Investments, Credit Suisse Asset Management and Deutsche Bank (Americas). He was also a co-founder and former COO of Wasserstein Perella & Co. Mr. Hornig received an A.B., M.B.A. and J.D. from Harvard University.
- Prof. Jagdeep Nanchahal, Chief Medical Officer – A Fellow of the Royal College of Surgeons and surgeon-scientist who acquired considerable skills using human disease tissue to identify mechanisms of disease. He modernized technology, first developed by Prof. Feldmann, for unravelling the complexity of rheumatoid arthritis. Prof. Nanchahal has driven the identification of new (patented) targets in fibrosis and is performing the Depuytren’s disease clinical trial, for which he raised a grant from the Wellcome Trust.
- Prof. Raphael Mechoulam, Scientific Advisor and Co-Founder – The pioneer of the field of cannabis chemistry, identifying the major components, synthesizing them and discovering the body’s own cannabinoids, known as endocannabinoids. Prof. Mechoulam is an elected member of the Israel Academy of Sciences and Humanities and twice a recipient of the Israel Prize in Exact Sciences.
The Form 8-K relating to the definitive agreement for the proposed transaction to be filed with the SEC can be viewed at www.sec.gov.
