- Factor Therapeutics (FTT) has shaken up its board and announced it’s looking to buy a vet imaging technology pipeline
- Today, Factor told the market it’s signed a term sheet agreement with veterinary medical imaging company LONGMILE
- The company has developed a range of portable medical imaging devices to use on horses and small animals
- The term sheet means the company can hold off on a binding investment contract until it’s completed due diligence
- It also includes a 120-day exclusivity agreement, so Factor can work out an offer without having to worry about other prospective buyers
- In addition to today’s news, Factor has appointed Dr David Brookes as its new Chair as Dr Cherrell Hirst prepares to step down
- As Factor dots the I’s and crosses the T’s on the new transaction, its shares will remain suspended from trading
- Shares last traded for half a cent each in mid-July
Factor Therapeutics (FTT) has shaken up its board and announced it’s looking to buy a vet imaging technology pipeline.
Today, Factor told the market it’s signed a term sheet agreement with the veterinary division of Brain Biosciences — meaning the company can hold off on a binding investment contract until it’s completed due diligence.
The division, known as LONGMILE, specialises in using Positron Emission Tomography (PET) — a type of medical imaging — in the veterinary medicine space.
What does LONGMILE do?
The team has developed a portable device for imaging horse limbs, as well as the world’s first PET device for standing, sedated horses.
LONGMILE also offers a portable medical imaging unit for scanning small animals. It comes in two different sizes and weighs just 23 kilograms.
The company’s headquarters, factory, and research and development lab are located in Washington D.C.
What does the agreement involve?
The tentative agreement includes a 120-day exclusivity agreement, so Factor can work out an offer without having to worry about other prospective buyers.
To protect that right, FTT will have to pay US$25,000 (around A$35,150) upfront, and then another US$25,000 once a formal acquisition is complete.
For now, the term sheet has a couple of non-binding conditions. Each party must be satisfied with the commercial due diligence and be able to negotiate a price which covers “transfer pricing, manufacturing capacity and ongoing technology and intellectual property development.”
Factor must also prove it has at least $3 million on hand when the buy goes through so it can fund future commercial activity.
Finally, Factor needs to bring new experts on board to support the new pipeline. It’s part of the reason the company’s announced a change to its executive team today.
Board shake-up
Factor’s Chair, Dr Cherrell Hirst, will step down on July 30 to make way for the appointment of Dr David Brookes.
David joined the factor board in May last year and currently serves as aa Non-Executive Director on the boards of two other ASX-listers. He’s served on the executive team of many public and private biotechs in the past and is a Fellow of the Australian College of Rural and Remote Medicine
“I am excited to be assuming the role of Chairman of Factor Therapeutics. The signing of the term sheet with LONGMILE opens the door for an exciting and successful future for Factor as a veterinary imaging company providing innovative and market-leading devices to the world,” David said.
“On behalf of the board, we thank Cherrell for her unwavering commitment to the company and its shareholders. Cherrell has led the board with skill and diligence since her appointment as Chair in April 2014. We wish her the best following this planned transition,” he continued.
Outgoing Chair, Dr Cherrell Hirst, said “The signing of this term sheet with LONGMILE marks the beginning of a new era for Factor and its shareholders. I am very pleased to have led the company to this point and know that it is in good hands for the future with directors experienced in nuclear medicine, development and commercialisation.”
“We look forward to completing final diligence and commercial terms in order to bring this opportunity in full to shareholders in the coming months,” Cherrell concluded.
As Factor dots the I’s and crosses the T’s on the new transaction, its shares will remain suspended from trading. Shares last traded for half a cent each in mid-July.