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KBL Merger Corp. IV SPAC Announces Non-Binding Term Sheet to Acquire CannBioRx Life Sciences Corp. and its Three Interactive Programs


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KBL Merger Corp. IV, a special purpose acquisition corporation, or SPAC, that completed its IPO in June 2017, announced that it has entered into a non-binding term sheet to acquire CannBioRx Life Sciences Corp. and its three key programs, which, if completed, will constitute KBL’s qualifying business combination transaction. These transactions are subject to due diligence by the parties, the amalgamation and internal reorganization of CannBioRx and the companies comprising the three programs, the negotiation and execution of definitive agreements and approval by the respective Boards of Directors of KBL and CannBioRx, as well as KBL’s and CannBioRx’s respective shareholders. There can be no assurance that the proposed transaction will be completed on the terms set forth in the non-binding term sheet, or at all.

If a definitive agreement is entered into and the transaction is completed, it would result in a publicly traded enterprise to be formed by the amalgamation of three programs of synergistic scientific work focused on treating inflammatory diseases: 180 Therapeutics, a late clinical-stage biopharmaceutical company focused on the discovery and development of novel biologic therapies for treating fibrosis; Katexco Pharmaceuticals, a pre-clinical effort for developing innovative, orally available therapies harnessing the brain’s nicotinic receptors to treat inflammatory diseases; and CannBioRex Pharmaceuticals, a pre-clinical initiative focused on the development and commercialization of man-made cannabinoids for arthritis, pain, diabetes and obesity.

“Bringing together these three unique programs under a single operating umbrella will enable us to target various key pathways in inflammation and capitalize on two decades of extensive scientific research. We also believe that creating a more robust entity will result in a de-risked, greater opportunity for success, as we believe that combination therapies represent the future of cost-effective healthcare,” said Prof. Sir Marc Feldmann. “With this broad portfolio, we believe that we may be able to address many major medical needs that provide opportunities for targeting inflammation. We intend to not only advance drug development and clinical trials for existing programs but also to identify new cannabinoid compounds and other therapeutics for future treatments.”

“The scientific team behind CannBioRx has discovered and developed highly successful pharmaceuticals that have been used to improve the lives of millions of patients worldwide, generating billions of dollars in global revenues,” added Dr. Marlene Krauss, CEO of KBL Merger Corp. IV. “If the proposed transaction is completed, we will bring together highly accomplished scientists in the medical cannabis and biotech industries, with significant expertise in developing new therapeutics and access to a broad intellectual property portfolio. Through the combined entity, KBL will attempt to capitalize on what we believe to be a vast, untapped market opportunity, combining non-plant-touching, pharmaceutical-grade, non-psychoactive cannabis and drug development programs to potentially create more effective treatments.”

Pursuant to the non-binding term sheet and upon closing of the proposed transaction, CannBioRx intends to establish the following leadership team:

Prof. Sir Marc Feldmann, Co-Chairman of the Board of Directors – A leading immunologist, professor at the University of Oxford and the inventor of anti-TNF (tumor necrosis factor) therapy, which is the world’s biggest selling drug class.1 With his team, he discovered the advantages of targeting TNF, as well as using combination therapies. Centocor Biotech (now Janssen Biotech under Johnson & Johnson) licensed Prof. Feldmann’s key patent to develop Remicade, which is one of the highest selling drugs in the world2, and AbbVie licensed his patents for use with Humira, the world’s best-selling drug.3

Prof. Lawrence Steinman, Co-Chairman of the Board of Directors – Professor of Neurology and Pediatrics at Stanford University. His work led to the development of Tysabri, a highly effective treatment for multiple sclerosis and inflammatory bowel disease. Tysabri was bought by Biogen and generates approximately $2 billion in revenue. He also founded Neurocrine Biosciences, a NASDAQ-listed company with an approximately $7.2 billion market cap. His lab at Stanford University is dedicated to understanding the pathogenesis of autoimmune diseases, particularly multiple sclerosis. He was on the Board of Centocor. Dr. Steinman received a B.A. from Dartmouth College and M.D. from Harvard Medical School.

Dr. Marlene Krauss, Chief Executive Officer – Founder and managing director of three (3) KBL healthcare venture capital funds and previously CEO and chairman of three (3) healthcare-oriented KBL SPACs. Dr. Krauss has 35+ years of experience in acquiring, growing and selling more than 30 companies in healthcare services, pharmaceuticals and medical devices. She also trained as a retinal surgeon and is a fellow of the American Academy of Ophthalmology. Dr. Krauss received a B.A. from Cornell University, M.D. from Harvard Medical School and M.B.A. from Harvard Business School.

Dr. Jonathan Rothbard, Chief Scientific Officer – Responsible for helping to establish a variety of biotech startups, including Amylin Pharmaceuticals (acquired by Bristol-Myers Squibb in 2012), ImmuLogic, CellGate and Cardinal Therapeutics. Dr. Rothbard completed his post-doctoral fellowship with Dr. Gerald Edelman at Rockefeller University and served as Head of the Molecular Immunology laboratory at the Imperial Cancer Research Fund in London before returning to Stanford University.

George Hornig, Chief Operating Officer – Has more than 35 years of senior operating, banking and investment experience. He is the Chairman of KBL Merger Corp. IV and former COO of Pine Bridge Investments, Credit Suisse Asset Management and Deutsche Bank (Americas). He was also the co-founder and former COO of Wasserstein Perella & Co. Mr. Hornig received an A.B., M.B.A. and J.D. from Harvard University.

Dr. Krauss concluded, “CannBioRx has multiple assets in different stages of development. These range from pre-clinical programs to our Phase 2b clinical-stage program for Dupuytren’s contracture that is moving to Phase 3. This strategy opens up the possibility of achieving multiple value creation milestones over time. Our teams are working together to complete the definitive and close the transaction in a timely manner.”

1 https://www.frontiersin.org/articles/10.3389/fphar.2017.00460/full
2 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4279876/
3 https://www.fiercepharma.com/pharma/pharma-s-top-meds-next-year-include-abbvie-hotshot-humira-and-some-newer-products
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