ALT5 Sigma Corp (NASDAQ:ALTS), a Nevada-based pharmaceutical company, announced on Monday its intent to acquire Soin Bioscience LLC, a move that aims to bolster its pain management pharmaceutical portfolio. The transaction, facilitated through ALT5's subsidiary Alyea Therapeutics Corporation, involves the innovative "clear patch" pain medication technology developed by Soin Bio.
The non-binding term sheet, signed on November 19, 2024, sets the stage for ALT5's strategic expansion in the biotech sector. The acquisition is in line with ALT5's previously declared intention to separate its biotech operations from its fintech business by the first half of 2025.
Soin Bio's clear patch technology, which is still under investigation and pending clinical trials, offers a novel approach to pain management. The transparent patch can be applied directly to the skin, drying to form an invisible layer that delivers continuous pain medication for up to eight hours. Its design allows for application over complex areas like joints and is not affected by moisture, representing a significant improvement over traditional pain patches.
Completion of the acquisition is contingent upon thorough due diligence, tax structuring, the finalization of definitive agreements, and other standard closing conditions. The term sheet is the preliminary step in the acquisition process, with further developments expected as due diligence progresses and agreements are formalized.
In other recent news, ALT5 Sigma Corporation reported record-breaking transaction volumes for September 2024, surpassing $240 million, a 151% increase year-over-year. This surge contributes to a robust year-to-date total of about $1.5 billion, with the third quarter alone accounting for over $600 million. The corporation also disclosed plans to split into two separate entities, spinning off its biotech business into Alyea Therapeutics Corporation, focusing on non-addictive pain management therapies.
ALT5 Sigma also announced a significant 114% year-over-year increase in its transaction volume for July 2024, exceeding $179 million. This growth contributes to a year-to-date transaction volume of $1.05 billion, marking a 101% increase compared to the same period last year. Alyea Therapeutics, the newly formed company, plans to initiate a large-scale multicenter clinical trial for its lead candidate, JAN123, a non-addictive pain management therapy.
ALT5 Sigma has added Ron Pitters to its Board of Directors. Pitters, with a 20-year background in global fintech and financial services, is expected to contribute significantly to the company's growth.
InvestingPro Insights
ALT5 Sigma Corp's (NASDAQ:ALTS) strategic move to acquire Soin Bioscience LLC comes at a time when the company's financials present a mixed picture. According to InvestingPro data, ALT5 has a market capitalization of $29.83 million, reflecting its current position as a smaller player in the pharmaceutical industry. The company's revenue for the last twelve months as of Q3 2024 stands at $7.11 million, with a gross profit of $3.46 million and a gross profit margin of 48.65%.
Despite the potential of the clear patch technology, ALT5 is currently operating at a loss, with an adjusted operating income of -$7.77 million and an operating income margin of -109.23% for the same period. This acquisition strategy could be seen as an attempt to turn the tide, as suggested by one of the InvestingPro Tips: "ALT5 Sigma is expected to be unprofitable this year, which may impact its ability to invest in growth."
Another relevant InvestingPro Tip notes that "ALT5 Sigma's stock price has significantly outperformed the market over the past year," with a remarkable 457.89% price total return over the last 12 months. This suggests investor optimism about the company's future prospects, possibly including the potential of this acquisition.
For investors seeking a deeper understanding of ALT5 Sigma's financial health and growth potential, InvestingPro offers 7 additional tips that could provide valuable insights into the company's outlook following this strategic move.
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