RE:Week 01: CZO is down 5,3%, the market is up 0,2%Chair of Aeterna: “Ceapro has well-established and growing commercial operations, with potential value-creating pipeline opportunities in large and growing cosmetic and consumer health markets. We believe that the new company will have the capital resources to support this ongoing growth, in addition to continuing to maximize the value of Aeterna’s existing assets, including Macimorelin.” news release
The Chair of AEZS highlights CZO's potential value-creating pipeline in large and growing markets and believes AEZS has the capital to support CZO's plan. CZO is scaling PGX-YBG 10X with industry leader Natex right now which Gilles has noted is commercial scale and will allow sales of the immune immune booster and position CZO for larger scale deployment. CZO has previously provided information concerning a $40 million immune booster plant($100 million net present value, 20% discount rate, 3% market share) and fossi doesn't want people to talk about it. Ronnie Miller, arguably the most important biotech executive in Canada in the last 20 years, is "thrilled" with how the merger and its resources complements CZO's plans for significant growth and believes it is the best plan forward.
“We are thrilled with this exciting transaction to merge with Aeterna and combine two complementary companies and teams, in support of our plan to drive significant growth,” said Ronnie Miller, Chairman of Ceapro. “After careful consideration, we believe this transaction is the best way forward for Ceapro and our valued shareholders.” news release
Gilles has put himself in the catbird seat being on the Board of Directors of both companies and it willing to bet his life work at CZO on the merger. The merger is supported by fairness opinions from Raymond James and Bloom Burton. Gilles should know very well what the terms of a potential diagnostic deal at AEZS are and we have precedents to work with. Gilles is excited.
Given the US$15 target price for AEZS from H.C. Wainwright, which would value AEZS at C$100 million, and that it is a merger of equals with each shareholder group holding 50% of the new company, it is arguably a potential C$200 million deal.
As CZO's cash falls to ~$C10 million, and it ramps up capital spending with the avenanthramide clinical trial at full speed, the simultaneous 5X and 10X scale-ups of PGX, as well as other pipeline activities and costs associated with this proposed merger, fossi presents no alternative plan. CZO's major client hasn't been said to hve returned yet. There could be delays in the PGX ramp-up given the risks of early-stage development. The financing market has been very difficult for early-stage biotech. Ronnie Miller believes this merger is the best path forward. With the ability to monitize the diagnostic for upfront payments or a sale all together CZO may have found a way to finance without warrants that will also add significant other assets to CZO's mission.