SAN FRANCISCO and TEL AVIV, Israel , March 16, 2020 (GLOBE NEWSWIRE) -- Kalytera Therapeutics, Inc. (TSX VENTURE: KLY and OTCQB: KALTF) (the "Company" or "Kalytera") announced today that, in connection with the Company's previously announced intention to acquire Stero Biotechs, Ltd. (“Stero”), the Company and the former shareholders of the Company’s subsidiary, Talent Biotechs Ltd., have agreed to extend the maturity date of the secured promissory note in favor of such shareholders (the “Promissory Note”) to May 15, 2020, the date by which the Company expects to complete the acquisition of Stero.
Stero’s Program in Steroid Sparing
Stero is a privately held Israeli company that is developing cannabidiol (“CBD”) for co-administration with steroids, so that the effective dosages of steroids can be significantly reduced, thereby potentially avoiding or reducing the many safety issues relating to steroid administration. Stero currently has two ongoing Phase 2a clinical studies evaluating CBD in steroid sparing, and has data from earlier clinical studies demonstrating that co-administration of CBD with steroids may significantly reduce the need for steroid treatment, with the potential to reduce steroid dosing by as much as 80%.
The Acquisition of Stero Should Position Kalytera as a Leader in CBD Pharmaceutical Development
"The acquisition of Stero should position Kalytera as a leader in the development of CBD pharmaceuticals,” stated Robert Farrell, President and CEO of Kalytera. “Stero's issued U.S. patent covers the use of CBD for steroid sparing in more than 130 named diseases in which steroid treatment is indicated, and Stero's programs in steroid sparing address large commercial opportunities, much larger than the market opportunity in GVHD that Kalytera is currently addressing. With the acquisition of Stero, we will have a much more robust CBD pharmaceutical development program, with vastly greater potential value.”
Mr. Farrell went on to state that,“Kalytera is working closely with the former Talent shareholders to place Kalytera in a leadership position in the development of CBD pharmaceuticals, and I would like to express my appreciation to them for their cooperation and assistance relating to both the proposed acquisition of Stero, and our corporate partnering and financing initiatives relating to our GVHD program. To date, we have not received an acceptable corporate partnership offer for our GVHD program reflecting the true value of that program. Therefore, we will continue our GVHD program, with a goal of completing by year-end all work required by the U.S. FDA for initiation of a Phase 3 clinical study in prevention of GVHD. In connection with the acquisition of Stero, we will engage both Canadian and Israeli investment banks and advisers to manage a private placement financing of at least USD $10M (the “Private Placement”), which is planned to close concurrently with the closing of the Stero acquisition. We will allocate USD $6M of the proceeds from the Private Placement to advance our GVHD program to Phase 3 clinical testing, as well as to payment of current debts and liabilities.”
Promissory Note to be Paid from Proceeds of Private Placement that is Planned to Close Concurrently with the Acquisition of Stero
Kalytera previously announced that on February 19th 2020, the European Patent Office granted Kalytera's Patent EP 2 991-733 B1 covering the use of CBD in the prevention and treatment of GVHD, and that the issuance of this patent caused Kalytera to become obligated to make a milestone payment to the former Talent shareholders of USD $2 million. Under an agreement entered into with the former Talent shareholders in October 2019, Kalytera has the option to delay 50% of this amount for a period of one year from the date of issuance of the patent, provided that Kalytera issues to the former Talent shareholders 13,320,000 Kalytera common shares. Kalytera intends to exercise this option to delay payment of 50% of the amount due, USD $1 million, and, accordingly, will issue 13,320,000 common shares to the former Talent shareholders, with the balance of USD $1 million to be added to the original principal amount of the Promissory Note, which was approximately USD $2 million, but which is now approximately USD $3 million. Kalytera intends to pay the Promissory Note in cash from the net proceeds of the Private Placement.
About Kalytera Therapeutics
Kalytera Therapeutics, Inc. ("Kalytera") is pioneering the development of a next generation of cannabinoid therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of novel cannabinoid medicines for a range of important unmet medical needs, with an initial focus on graft versus host disease.
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This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives and other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavourable. Kalytera undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Kalytera believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Kalytera's control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Kalytera disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.