Atai’s proposal to purchase the company will serve as a stalking horse bid under the Sale and Investment Solicitation Process.IntelGenx Corp. (OTCQB: IGXT) (TSX: IGX) was granted protection under the Companies Creditors Arrangement Act, which is the Canadian version of bankruptcy.
The company told investors that on May 27, the court granted an order that approved a sale and investment solicitation process for its assets. The court also approved an agreement of purchase by Atai Life Sciences AG for IntelGenx solely to serve as a “stalking horse” bid under the CCAA’s Sale and Investment Solicitation Process.
IntelGenx’s statement noted that the stalking horse bid establishes a baseline price and deal structure for the solicitation of superior bids from qualified interested parties and provides certainty that a going-concern solution for the business of IntelGenx has already been identified.
IntelGenx is a drug delivery company focused on the development and manufacturing of pharmaceutical films. The company announced in May that it was facing a short-term liquidity crisis as a result of its inability to secure necessary bridge financing. This led to a lack of time and financial resources to complete an ongoing digital offering.
The liquidity crisis was also exacerbated by delays in the regulatory approval process for the commercialization of certain of IntelGenx’s products, resulting in the postponement of additional revenue streams.
IntelGenx told investors in March that it agreed to produce three products for Tilray in Canada as part of a settlement in a breach of contract claim against Tilray around a 2018 agreement for medical cannabis oral strips.
Atai announced its earnings in May and told investors that co-founder Florian Brand would step down as chief executive officer by year’s end. Srinivas Rao, the other co-founder and current chief scientific officer, assumed the role of co-CEO on June 1 before becoming sole CEO subject to appointment requirements, according to the firm.
Financially, Atai had cash and securities worth $121.3 million at the end of March, down from $154.2 million at 2023 year-end. However, it expects its current funds and debt facility to sustain operations into 2026.