ESSA Pharma to be acquired by XenoTherapeutics in all-cash deal

SOUTH SAN FRANCISCO/VANCOUVER/BOSTON - ESSA Pharma Inc. (NASDAQ:EPIX), a biotechnology company with a market capitalization of $76 million and strong liquidity position according to InvestingPro data, announced Monday it has entered into a definitive agreement to be acquired by XenoTherapeutics, Inc., a non-profit biotechnology company, with XOMA Royalty Corporation (NASDAQ:XOMA) providing financing for the transaction.

Under the terms of the agreement, ESSA shareholders will receive cash payments estimated at approximately $1.91 per share, plus one non-transferable contingent value right (CVR) per share that could provide up to an additional $0.06 within 18 months following the transaction’s close. The offer comes as ESSA’s stock trades at $1.71, down about 68% over the past year, with the stock currently showing signs of undervaluation based on InvestingPro’s Fair Value analysis.

The deal comes as ESSA proceeds with plans to discontinue operations and wind down its business. The company will apply to the Supreme Court of British Columbia for authorization to make an initial cash distribution to shareholders before the transaction closes.

"This transaction delivers cash value to shareholders in an expedited timeframe, with less complexity and value risk when compared to a liquidation," said David Parkinson, President and CEO of ESSA.

The transaction requires approval from at least 66⅔% of votes cast by ESSA shareholders and securityholders, as well as court approval. ESSA directors and senior officers, who collectively own approximately 2.23% of outstanding shares, have agreed to vote in favor of the deal.

The agreement includes customary deal-protection provisions, including a $2.5 million termination fee payable by ESSA under certain circumstances.

The transaction is expected to close in the second half of 2025. Leerink Partners is serving as ESSA’s exclusive financial advisor.

The announcement is based on a press release statement from the companies. Want deeper insights into biotech companies like ESSA? InvestingPro offers exclusive financial health scores, valuation metrics, and professional-grade analysis tools to help you make informed investment decisions.

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