InMed Pharmaceuticals Inc. witnessed a dramatic surge in its stock price on Tuesday, with shares leaping 108.6% to $1.42 in heavy Nasdaq trading. The microcap biotech firm, based in Vancouver, announced a definitive agreement to merge with privately-held Mentari Therapeutics in an all-stock transaction, effectively pivoting the company's focus toward migraine prevention therapies.
The merger, which is structured as a reverse takeover, will see the combined entity operate under the Mentari Therapeutics name and trade on the Nasdaq Capital Market under a new ticker symbol. The deal is bolstered by an oversubscribed $290 million private placement, providing substantial capital to advance Mentari's pipeline of migraine treatments.
Under the terms of the agreement, pre-merger InMed shareholders will own approximately 1.51% of the combined company. The pro forma equity value of the merged entity is estimated at around $421.4 million, inclusive of the private placement proceeds. Trading volume was exceptionally heavy, with roughly 69.6 million shares changing hands, far exceeding the typical volume for the microcap stock. InMed's market capitalization stood at approximately $5.7 million prior to the announcement.
Eric A. Adams, CEO of InMed, stated that the board had been evaluating strategic alternatives and concluded that the merger with Mentari represented the 'highest potential value creation opportunity' for shareholders. Julianne Bruno, Chair of Mentari, noted that the deal provides Mentari with the necessary capital and public market infrastructure to accelerate its migraine programs.
Mentari's lead drug candidate, MT-001, is an anti-PACAP antibody, while MT-002 is a bispecific antibody targeting both CGRP and PACAP signaling proteins implicated in migraine pathogenesis. The company plans to file a first-in-human regulatory application for MT-001 around mid-2026, with a similar filing for MT-002 targeted for the first quarter of 2027. This approach aims to address the significant unmet need in migraine prevention, as current CGRP-targeting therapies—such as AbbVie's Qulipta, Teva's Ajovy, Amgen's Aimovig, and Eli Lilly's Emgality—fail to provide adequate relief for 40-50% of patients.
InMed's financial position had been deteriorating, with a net loss of $3.0 million for the quarter ended March 31 and cash, cash equivalents, and short-term investments of $5.2 million. The company is winding down its BayMedica commercial operations, underscoring the strategic shift. Additionally, InMed amended preferred investment options held by Armistice Capital Master Fund, reducing the exercise price from $16.60 to $0.80 for options on up to 278,761 common shares, though no guarantee of exercise was provided.
The transaction is subject to customary closing conditions, including shareholder approval, effectiveness of a registration statement with the SEC, and the closing of the private placement. The drug candidates remain experimental, and there is no assurance of clinical or regulatory success. The merger represents a fundamental transformation for InMed, transitioning from a cash-burning microcap focused on cannabinoid assets to a well-funded migraine drug developer with a promising pipeline.
