EVE Health Group (ASX: EVE) has launched a $3 million takeover bid for Australian biotech company Nextract as part of a strategic move to transition from a natural wellness brand into a broader health platform targeting regulated markets.
Historically operating in the health and wellness space through its flagship brand Meluka Australia, the acquisition will mark a material shift for the Perth-based firm, positioning it to expand into the pharmaceutical and nutraceutical sectors through Nextract’s proprietary oral delivery systems and solubility-enhancing technologies.
Specifically, it will allow EVE to tap into the global erectile dysfunction (ED) and dysmenorrhoea (period pain) markets — valued at approximately US$5.3 billion and US$10.9b respectively — that Nextract is aiming to disrupt with its lead products.
Nextract specialises in reformulating known molecules into new delivery formats, aiming to develop faster-acting, easier-to-use formats for well-established active pharmaceutical ingredients previously delivered as traditional oral tablets.
Leading the way is an oral, alcohol-free strip to treat ED and a natural, non-hormonal solution for dysmenorrhoea.
The parties expect regulatory approvals to be fast-tracked via Australia’s special access and authorised prescribers schemes for unmet clinical needs, with commercialisation of the new products targeted for year end.
EVE managing director Bill Fry said the acquisition would transform the company into a vertically-integrated pharmaceutical group with a ready portfolio of health-related products.
“Nextract brings deep innovation in delivery formats and regulatory strategy, broadening the way we can deliver clinically-validated wellness solutions,” he said.
“With strong foundations built under the Meluka brand, we believe this acquisition represents a natural and compelling next phase in our evolution.”
The company sees Nextract as complementary to Meluka Australia’s existing operations and expects it to contribute to a growing revenue stream of $2 million.
Under the terms of the proposal, EVE will issue Nextract with approximately 83.33 million shares priced at $0.036 each, for a total consideration of $3 million.
As the deal represents a significant change in the nature of EVE’s activities, the Australian Securities Exchange has determined it will be subject to EVE shareholder approval.
If approved, EVE expects the acquisition to position it at the intersection of natural medicine, regulatory science and innovative delivery technology and open new revenue streams via pharmacy and clinical channels.
On completion of the transaction, Nextract pharmaceutical and regulatory expert Damian Wood will take over as managing director of EVE while Mr Fry will transition to the role of non-executive director.
“EVE’s expansion into regulated pharmacy and clinical health channels comes at an ideal time,” Mr Wood said.
“Nextract’s platform, combined with Meluka’s proven distribution and probiotic expertise, opens the door to new formulations, new markets and scalable growth [and] I am excited to lead this next phase alongside a committed and forward-thinking team.”
Nextract co-founder Stuart Gunzburg will be appointed chief scientific officer of EVE.
EVE’s acquisition of Nextract will be supported by a capital raising of up to $1.5m with a 40:1 share consolidation to reduce the number of shares on issue and better position the company for institutional investment.
Funds raised will be primarily applied to regulatory submissions and the scale-up of initial manufacturing for Nextract’s product portfolio.
Manufacturing is planned to be outsourced to GMP-certified partners, minimising capital intensity while supporting scalable commercial production.
Australian pharmaceutical company LTR Pharma (ASX: LTR) is another making moves to address the lucrative ED market with the development of first-in-class Spontan fast-acting intranasal spray treatment.
LTR signed an agreement in January with pharmaceutical wholesaler Symbion to enable nationwide distribution of Spontan via Symbion’s extensive network.
The partnership grants LTR access to established, scalable pharmaceutical infrastructure and aligns with its strategy to prepare for a full-scale commercial launch following receipt of regulatory approvals.
ED is a serious and common medical problem that can have a significant impact on a patient’s physical and psychological health.
Research shows that worldwide prevalence of the condition has doubled in the last 30 years and is expected to increase to 322 million in 2025.
There is a higher prevalence among men who have undergone radiation or surgery for prostate cancer, those who have a lower spinal cord injury and those with other neurological diseases.
Current oral PDE5 inhibitors are generally proven to be effective and safe but patients are reported to have a high discontinuation rate.
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