INM Stock: Why It Increased Today

By Amit Chowdhry ● September 13, 2021
  • The stock price of InMed Pharmaceuticals Inc (NASDAQ: INM) increased over 10% pre-market today. This is why it happened.

The stock price of InMed Pharmaceuticals Inc (NASDAQ: INM) – ​​a leader in the manufacturing and clinical development of rare cannabinoids – increased over 10% pre-market today. Investors are responding positively to InMed Pharmaceuticals announcing that it has entered into a definitive agreement to buy BayMedica, a private company based in the US that specializes in the manufacturing and commercialization of rare cannabinoids. The definitive agreement follows a previously signed letter of intent announced on June 29, 2021. The deal – which is subject to certain standard closing conditions – is expected to close in the coming weeks.

Upon the closing of the deal, InMed will become a global leader in the manufacturing of rare cannabinoids with expertise in 3 distinct and complementary cannabinoid manufacturing approaches. And InMed’s proprietary cannabinoid manufacturing process IntegraSyn – combined with BayMedica’s synthetic biology and chemical synthesis capabilities – will provide InMed with complete manufacturing flexibility to select the most appropriate, cost-effective method based on the target cannabinoid and appropriate quality specifications for the desired market segment. 

In parallel to cannabinoid manufacturing, the combined company is going to continue to explore the therapeutic potential of cannabinoids and novel cannabinoid analogs for pharmaceutical drug development as well as expand commercial sales of rare cannabinoids to the consumer health and wellness sector.

The revenues of BayMedica’s initial rare cannabinoid product Prodiol CBC (cannabichromene) have grown steadily since sales commenced in December 2019 with cumulative revenues in excess of US$2.5 million. And BayMedica leads the industry in large batch production of CBC with current batch sizes of more than 200kg and an ability to increase to metric ton quantities as market demand increases.

BayMedica is focused on the wholesale for consumer health and wellness markets, including nutraceuticals, cosmetic, functional food and beverage as well as animal health markets. Along with CBC, BayMedica has several high-value non-intoxicating rare cannabinoids in various stages of commercial manufacturing scale-up including CBDV, THCV, CBGV, CBT, and CBN for health and wellness markets.

Pursuant to the indicative terms of the definitive agreement, InMed will acquire 100% of BayMedica in exchange for 1.78 million InMed common shares, to be issued to BayMedica’s equity and convertible debt holders with any such issued InMed common shares being subject to a six-month contractual hold period. And the total number of InMed common shares issuable in the proposed transaction may be reduced in the event that BayMedica’s net liabilities exceed a negotiated threshold following completion of a financial review of BayMedica’s closing balance sheet. 

KEY QUOTES:

“This is a transformative transaction for InMed. This acquisition gives us a breadth of synthetic cannabinoid manufacturing capabilities to deliver high quality, cost-effective rare cannabinoids for any segment of the market from consumer packaged goods (CPG) to prescription pharmaceuticals. After initializing our research collaboration with BayMedica last November, it became evident that there are very clear synergies between our companies. BayMedica brings unparalleled cannabinoid manufacturing expertise in both chemical synthesis and biosynthesis together with industry veterans who have been pioneers in this space.”

“This transaction transforms InMed into a revenue-generating company, providing tangible value for our shareholders. BayMedica has demonstrated a rapid increase in sales since initiating commercialization and we expect to grow these revenues considerably in the short-to-medium term. We believe this segment of the industry is reaching an inflection point as commercial viability is being achieved as well as increased awareness and appreciation for bio-identical, synthetically produced cannabinoids.”

— Eric A. Adams, President and Chief Executive Officer of InMed

“The entire BayMedica team is very excited to join InMed. We look forward to advancing our manufacturing systems together, enabling us to bring additional rare cannabinoids to the market, and to leverage our technology and IP to directly contribute to InMed’s clinical development pipeline. The timing of this acquisition is ideal given our plans for several high value product launches.”

— BayMedica’s Chief Executive Officer Shane Johnson

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.