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NEW YORK - Protagenic Therapeutics, Inc. (NASDAQ:PTIX), a biotech company focused on stress-related disorders, has announced a definitive share exchange agreement with Phytanix Bio Inc., a firm specializing in cannabinoid-based medicines. The transaction, completed on Monday, May 16, 2025, results in the formation of a combined entity named Phytanix, Inc. According to InvestingPro data, Protagenic enters this merger with a market capitalization of $1.63 million and maintains more cash than debt on its balance sheet.
The merger aligns Protagenic’s peptide assets with Phytanix Bio’s cannabinoid and modified stilbenoid compounds, expanding the combined pipeline to include treatments for central nervous system (CNS) and stress-related disorders. The new entity boasts five preclinical assets and one clinical-stage asset, PT-00114, which is in Phase I/IIa trials and targets the BLA pathway, potentially qualifying for regulatory data exclusivity. The deal comes as Protagenic’s stock has experienced significant volatility, with InvestingPro showing an 85% decline over the past year and currently trading at $3.03, near its 52-week low of $2.35.
Protagenic shareholders benefit from a broader patent estate and the addition of CNS programs to the company’s existing portfolio. The combined talent pool is expected to advance development and regulatory activities.
Under the share exchange agreement terms, Protagenic issued common and preferred stock to Phytanix Bio’s shareholders. The preferred stock and warrants issued are convertible into common stock, subject to stockholder approval in compliance with Nasdaq rules.
Post-merger, ownership distribution stands at approximately 35% for pre-merger Protagenic shareholders and 65% for Phytanix Bio stockholders, calculated on a fully diluted basis. The company’s current financial health score is rated as WEAK by InvestingPro, with analysts projecting continued challenges as net income is expected to decline this year. InvestingPro subscribers have access to over 10 additional key insights about Protagenic’s financial outlook and market position.
Protagenic’s Executive Chairman, Garo H. Armen, PhD, stated, "This combination aligns two pipelines with complementary assets and expertise to address unmet needs in neuropsychiatry, CNS, and other disorders." Barrett Evans, President and CEO, expressed enthusiasm for uniting the teams to advance the programs for patients and shareholders.
The merger is subject to customary closing conditions, including regulatory approvals and the green light from Protagenic’s stockholders for the conversion of the preferred stock.
This news is based on a press release statement and reflects the information available as of the date of the release. Investors are advised to read any forthcoming proxy statements and other documents filed with the SEC for a complete understanding of the transaction and its implications.
In other recent news, Protagenic Therapeutics has announced a reverse stock split of its common stock at a 1-for-14 ratio, effective May 5, 2025. This decision, approved by stockholders, aims to meet Nasdaq’s minimum bid price requirement for continued listing. The reverse stock split will reduce the number of outstanding shares from approximately 8.24 million to around 588,750, with adjustments for fractional shares. Additionally, Protagenic Therapeutics has repriced certain outstanding stock options, originally set between $4.00 to $19.92, to $0.2655 per share, aligning with the closing price on the date of the Annual Meeting. This adjustment, approved by stockholders, could potentially make stock options more attractive to employees.
Furthermore, during a special meeting on April 18, 2025, stockholders authorized the Board to implement the reverse stock split at a ratio between 1-for-10 and 1-for-20. The Board has the discretion to determine the exact ratio and timing before January 31, 2026. Protagenic Therapeutics has also ensured that stockholders holding pre-split stock certificates will receive information on their post-split stock ownership. These developments reflect the company’s strategic moves to manage its capital structure and align with common practices in the industry.
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