This morning we received news that Reunion Neuroscience has been sold to MPM BioImpact, a private biotechnology investment firm.

It’s been a volatile time for the Field Trip team. Last year, the company split into two entities as Field Trip Splits Into Two Independent Public Companies with Reunion Neuroscience being formed to focus on drug development and remaining on the NASDAQ (REUN). We then had Reunion Sueing Mindset Pharma over patent claims on its lead compound RE104). Then Field Trip Health, the clinic and treatment entity, began a run of bad news as Field Trip Health & Wellness Closes Clinics in 5 Locations and Field Trip Files for Credit Protection; CEO Resigns.

And now Reunion, who still has a potentially interesting lead drug candidate, has been sold to a private biotech investment firm.

The deal shows that MPM would acquire Reunion in an all-cash transaction valued at approximately US$13.1 million — taking the company private and bringing it under its group of private subsidiaries.

If approved, ..”all holders of outstanding common shares of Reunion will be entitled to receive US$1.12 in cash for each Share held immediately prior to the effective time of the Arrangement. Based on the Bank of Canada daily exchange rate as of the close of business on May 31, 2023, this would be approximately $1.52 per Share in Canadian dollars, representing a premium of approximately 43.1% over the trailing 30-trading-day volume weighted average price.”

See the full press release below.

Reunion Neuroscience Announces US$13.1 Million Take-Private Transaction with MPM BioImpact

Reunion Common Shareholders to Receive Consideration of US$1.12 Per Share in Cash

Represents a 43.1% Premium to the 30-Day Volume Weighted Average Price

Reunion Presents Encouraging Phase 1 Final Analysis at American Society of Clinical Psychopharmacology Annual Meeting, Enabling Advancement into Phase 2 in 2H 2023

TORONTO, June 01, 2023 (GLOBE NEWSWIRE) — Reunion Neuroscience Inc. (NASDAQ: REUN, TSX: REUN) (“Reunion” or the “Company”), a clinical-stage biopharmaceutical company committed to developing innovative and patented therapeutic solutions for underserved mental health conditions, announced today that it has entered into a definitive arrangement agreement dated May 31, 2023 (the “Arrangement Agreement”) with MPM BioImpact (“MPM”), a world-leading biotechnology investment firm, whereby affiliates of MPM would acquire Reunion in an all-cash transaction valued at approximately US$13.1 million by way of a statutory plan of arrangement under the Canada Business Corporations Act (the “Arrangement”).

Pursuant to the terms and conditions of the Arrangement Agreement, all holders of outstanding common shares (“Shares”) of Reunion (the “Shareholders”) will be entitled to receive US$1.12 in cash for each Share held immediately prior to the effective time of the Arrangement. Based on the Bank of Canada daily exchange rate as of the close of business on May 31, 2023, this would be approximately $1.52 per Share in Canadian dollars, representing a premium of approximately 43.1% over the trailing 30-trading-day volume weighted average price.

Reunion’s board of directors (the “Board”), after consultation with its financial and legal advisors and acting on the unanimous recommendation of a special committee of independent directors of Reunion (the “Special Committee”), has determined that the Arrangement is in the best interests of the Company and is fair to Shareholders. The Board unanimously recommends that Shareholders vote IN FAVOUR of the Arrangement at a special meeting of Shareholders expected to be held on or around July 12, 2023 (including any adjournment or postponement thereof, the “Meeting”). The Company has fixed a record date of June 12, 2023 for purposes of determining Shareholders entitled to receive notice of, to attend and to vote at the Meeting.

“We believe that this all-cash transaction maximizes value and is in the best interest of our shareholders,” said Greg Mayes, Reunion President and CEO. “We are thrilled that MPM recognizes the value and differentiation of our clinical pipeline and look forward to working with them to bring this transaction to a close for the benefit of Reunion’s shareholders.”

“MPM BioImpact is excited to partner with Reunion and for the opportunity to develop next-generation solutions for underserved mental health conditions,” added Ansbert Gadicke, Managing Partner, MPM BioImpact. “This transaction reflects MPM BioImpact’s strategy of investing in breakthrough science and innovative products that can address the world’s greatest unmet medical needs.”

The Arrangement

Completion of the Arrangement will, among other things, require the approval by at least two-thirds (66⅔ percent) of the votes cast by the Shareholders at the Meeting. Certain Shareholders, and all of the Company’s officers and directors, representing in aggregate approximately 34% of the issued and outstanding Shares, have entered into voting and support agreements with MPM in support of the Arrangement.

Completion of the Arrangement remains subject to the satisfaction (or waiver) of a number of conditions precedent, including, but not limited to the following material conditions:

• approval of the Shareholders at the Meeting;
• obtaining all applicable regulatory approvals, including approval of the Ontario Superior Court of Justice (Commercial List) (the “Court”) of the Arrangement;
• the net cash held by the Company being equal to or greater than US$8,000,000 as of the close of business on the third business day immediately prior to closing of the Arrangement (subject to reduction under certain circumstances); and
• the performance or completion in all material respects with all obligations required to be performed by the Company and MPM under the Arrangement Agreement.

Subject to the satisfaction or waiver of the conditions precedent for completion of the Arrangement, the Arrangement is expected to close in the calendar third quarter of 2023. Upon completion of the transaction, Reunion will no longer be traded or listed on any public securities exchange and will be wholly-owned by affiliates of MPM.

The foregoing summary is qualified in its entirety by the provisions of the respective documents. Reunion will file a material change report in respect of the Arrangement, and copies of the Arrangement Agreement, the plan of arrangement and the forms of voting support agreements will be filed with the applicable Canadian securities regulators and will be available for review on SEDAR at www.sedar.com. Full details of the Arrangement will be included in a management information circular from Reunion that is expected to be filed on SEDAR and mailed to Shareholders on or around June 21, 2023. See also “Additional Information and Where to Find It” further below.

Advisors

Oppenheimer & Co. Inc. is serving as exclusive financial advisor to the Special Committee of the Board of Directors of Reunion and PI Financial Corp. rendered a fairness opinion to Reunion, and Bennett Jones LLP and Morgan, Lewis & Bockius LLP are serving as legal advisors. McCarthy Tétrault LLP and Wilmer Cutler Pickering Hale and Dorr LLP are serving as legal advisors to MPM.

About Reunion Neuroscience Inc.
Reunion is committed to developing innovative therapeutic solutions for underserved mental health conditions. The Company’s lead asset, RE104, a proprietary, novel, serotonergic psychedelic compound and the only 4-OH-DiPT prodrug in clinical development, is being developed as a potential treatment for postpartum depression that could provide rapid symptom relief and durable efficacy. RE104 is protected under U.S. Patent No. 11,292,765 issued on April 5, 2022 (priority June 30, 2020), with claims for composition of matter, methods of manufacturing, formulations and methods of use for a genus of hemi-ester tryptamines, including RE104, which could provide protection out to June 30, 2041. Reunion is also developing the RE200 series, which includes preclinical compounds with enhanced receptor selectivity to address additional therapeutic applications.

About MPM BioImpact
MPM is a world-leading biotechnology investment firm with three decades of experience creating and investing in innovative biotechnology companies seeking to deliver transformative therapies to patients in the areas of highest unmet medical need. MPM strives to power novel medical breakthroughs that transform patients’ lives. It invests across the biotech landscape with its early stage venture capital funds, and with impact funds investing in both private and public companies. For more information visit www.mpmcapital.com.