iX Biopharma is exploring a spin-off of its pharmaceutical business, including medical cannabis, by way of a listing on the main board of The Stock Exchange of Hong Kong (HKEX).
In a filing to the Singapore Exchange (SGX) on July 12, the company disclosed it intends to restructure its pharmaceutical business to be held by Ligo Pharma, a wholly-owned subsidiary incorporated in the Cayman Islands.
Following the restructuring, the spin-off company will be engaged in manufacturing, research and development and sales of pharmaceutical and medicinal cannabis products. These activities are currently undertaken by iX Biopharma’s wholly-owned subsidiaries iX Syrinx, Arrow Property Trust, iX Biopharma, iX Biopharma Europe and iXB.
Following the completion of the proposed spin-off and listing, iX Biopharma will focus on sales, marketing and distribution of innovative nutraceutical products under its brand Entity.
iX Biopharma states that the rationale for the proposed spin-off and listing is due to the different development, commercialisation and risk profiles between the pharmaceutical and nutraceutical businesses, with the pharmaceutical business subject to longer and more costly requirements. To that end, the company intends for separate management and operations teams to manage the respective businesses.
See also: iX Biopharma gets green light to export medicinal cannabis wafers
In addition, ix Biopharma expects a listing on the HKEX to enable the spin-off company to gain independent access to capital markets, enabling it to raise funds for product development without dilution to the group’s shareholders.
“The listing will relieve the company from the burden of having to continuously obtain financing for the operations and future expansion of this business, while allowing the value of the Pharmaceutical and Medicinal Cannabis Business to be unlocked and unbundled,” iX Biopharma states.
iX Biopharma plans to apply for a listing under the Chapter 18A biotech listing rules established by the HKEX which are specific to the biotech sector.
The proposed spin-off and listing are dependent on approvals from relevant regulatory authorities and shareholders’ approval. iX Biopharma also states it may decide not to proceed with the proposal in the event it deems it not to be in the interests of the company.
Shares in iX Biopharma closed flat at 23.5 cents on July 9.
