Press Releases

Cynapsus Announces Proposed Acquisition of Adagio Pharmaceuticals and Private Placement

Marketwire, April 26, 2022


TORONTO – Cynapsus Therapeutics Inc. (the "Corporation" or "Cynapsus") (CTH: TSX-V) is pleased to announce that it has entered into a preliminary agreement dated April 26, 2022 with Adagio Pharmaceuticals Ltd. ("Adagio") providing for the acquisition by Cynapsus of all of the issued and outstanding shares of Adagio in a share exchange (the "Proposed Transaction"). The acquisition would supersede and replace the License Option Agreement dated July 22, 2022 entered into by Cynapsus and Adagio with respect to the intellectual property owned by Adagio concerning the APL-130277 patent rights and know-how.

“The rationale for acquiring Adagio is twofold,” stated Rochelle Stenzler, Chairperson of Cynapsus. “First, the proposed transaction allows Cynapsus to obtain complete control over the intellectual property relating to our lead drug candidate, APL-130277. In addition, the proposed transaction will align the interests of the Adagio shareholders with those of Cynapsus in risk/reward payoffs. We are encouraged by the progress that Anthony Giovinazzo and his team have made with the APL-130277 asset over the past 8-10 months, and we look forward to advancing the asset to human clinical studies later this year.”

Terms of the Transaction

The Proposed Transaction will be structured as a share exchange with Adagio shareholders to receive newly issued common shares in the capital of Cynapsus (the “Common Shares”) in exchange for all of the issued and outstanding shares of Adagio. The Adagio shareholders will be entitled to the following payments pursuant to the Proposed Transaction:

A. a payment of $1,300,000 on closing, to be satisfied by the issuance of 26,000,000 Common Shares having a deemed value of $0.05 per share;

B. a payment of $1,500,000 conditional upon the successful completion of the APL-130277 phase 1 studies, to be satisfied by the issuance of Common Shares at a deemed value equal to the 30 day volume weighted average trading price ("VWAP") immediately prior to the first public announcement of the results of such studies; and

C. a payment of $2,500,000 conditional upon the successful completion of the APL-130277 final pivotal study, to be satisfied by the issuance of Common Shares at a deemed value equal to the 30 day VWAP immediately prior to the first public announcement of the results of such study.

With respect to the payments described in B and C above, the VWAP of the Common Shares of Cynapsus may not be less than the “discounted market price” as defined in the policies of the TSX Venture Exchange Inc. (the “Exchange”).

Related Party Transaction

The Proposed Transaction constitutes a “related party transaction” pursuant to Multilateral Instrument 61-101 and the policies of the Exchange (the "Related Party Requirements"). Anthony Giovinazzo, President and Chief Executive Officer of the Cynapsus, is also a director, officer and majority shareholder of Adagio. Steps have been taken by the board of directors (the “Board”) of Cynapsus to address any potential conflicts of interest, including but not limited to, the appointment of a special committee of the Board (the “Special Committee”) and obtaining a fairness opinion from Torreya Capital (“Torreya”), a division of Financial West Investment Group, Inc., an independent US FINRA/SIPC registered financial advisor.

Torreya has advised that, in its opinion, based on the various assumptions and limitations set out in its opinion, the consideration to be paid to the shareholders of Adagio pursuant to the Proposed Transaction is fair from a financial point of view to the disinterested Cynapsus shareholders. The Special Committee has concluded that the Proposed Transaction is in the best interests of Cynapsus and recommended approval to the Board. The Board has concluded that the Proposed Transaction is in the best interests of Cynapsus.

Under the Related Party Requirements, the Proposed Transaction is required to be approved by a simple majority of disinterested shareholders. An annual and special meeting of shareholders has been called for May 31, 2022 in Toronto, Canada at which the Proposed Transaction will be considered for approval by shareholders. In addition, pursuant to the Related Party Requirements, if a transaction is a related party transaction, a formal valuation is required, unless exemptions from such requirements are available. By virtue of its listing on the Exchange, the Corporation is exempt from the valuation requirements with respect to the Proposed Transaction.

Closing Conditions

The closing of the Proposed Transaction is conditional upon, among other things, the following:

(a) Completion by the Corporation of satisfactory due diligence.

(b) Completion by the Corporation of the Private Placement (as described below).

(c) All necessary board, shareholder, regulatory and third party approvals.

(d) Execution and delivery of a definitive purchase agreement and all other documentation required to effect the Proposed Transaction.

As noted above, completion of the Proposed Transaction is subject to a number of conditions, including Exchange acceptance and disinterested Cynapsus shareholder approval. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Escrow Arrangements

The closing of the Proposed Transaction is conditional upon the closing of the Private Placement by Cynapsus in an amount of no less than $4 million. If the Private Placement is completed for gross proceeds of less than $8 million, then a number of the Common Shares of Cynapsus to be delivered on closing will be subject to escrow arrangements with the Corporation. The number of shares that would be subject to escrow would be calculated by dividing the actual gross proceeds raised in the Private Placement by $8 million and then multiplying the resulting fraction by 26,000,000. The product of the multiplication would provide the number of Common Shares that would be delivered to the shareholders of Adagio at closing and the balance would be subject to escrow. The Common Shares subject to escrow would be released from escrow concurrent with the last closing of future equity financings by Cynapsus, that cumulatively (including the Private Placement) meet or exceed $8 million in the aggregate, provided that such Common Shares deliverable to Mr. Giovinazzo would be subject to the escrow arrangements described below.

All Common Shares issued to Mr. Giovinazzo will be subject to a separate and distinct contractual escrow to be entered into with a third party escrow agent. The escrow arrangement with Mr. Giovinazzo will provide, among other things, for the following escrow releases:

(a) 25% immediately; and

(b) 25% on each of the first, second and third anniversaries of the closing of the Proposed Transaction.

Any of the Common Shares issued to Mr. Giovinazzo that were subject to the Private Placement escrow noted above shall be released from the contractual escrow as if such shares had been delivered at closing.

In the event of a sale of the Corporation, including but not limited to a sale of substantially all of the assets of the Corporation, a merger or acquisition or a plan of arrangement, or whereby a new controlling shareholder is established, all shares then remaining in escrow would be immediately released.

The foregoing is in addition to any escrow that may be imposed by the Exchange.

Private Placement

Cynapsus intends to complete a brokered private placement (the "Private Placement") of units ("Units") of between $4,000,000 and $10,000,000 in connection with the Proposed Transaction. As previously announced, Summer Street Research Partners was retained by Cynapsus to provide financial and advisory services and will act as the Corporation's placement agent for the Private Placement. The Corporation may, at its discretion, increase the size of the Private Placement.

The Private Placement will consist of Units priced at $0.05 per Unit. Each Unit will consist of one Common Share and one share purchase warrant. Each warrant will entitle the holder to acquire one Common Share at a price of $0.10 for a period ending 60 months from the closing date.

Any securities to be issued will be subject to a hold period of four months from the closing date in accordance with the rules and policies of the Exchange and applicable Canadian securities laws and such other further restrictions as may apply under foreign securities laws.

The Corporation intends to use the proceeds from the Private Placement to fund ongoing research and development activities relating to the APL-132077 project, for working capital and to satisfy current liabilities.


The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular to be prepared in connection with shareholder approval of the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Cynapsus should be considered highly speculative.

It is currently anticipated that the Proposed Transaction and Private Placement will be completed on or about June 15, 2011.

About APL 130277

Cynapsus is developing APL 130277 as a convenient and fast acting reformulation of FDA-approved apomorphine (a proven dopamine agonist that addresses motor fluctuation for Parkinson’s patients). APL 130277 is a reformulation of the currently marketed injection of apomorphine into an oral formulation that will follow an expedited clinical development path of 18-24 months based on the FDA’s 505b(2) submission process. In addition to addressing the needs of severe Parkinson’s patients who currently have access to only the inconvenient and painful subcutaneous apomorphine injection, APL 130277 has the potential to become adjunctive therapy for moderate Parkinson’s patients as well. APL 130277 could be used 2 to 3 times daily to allow for a fast rescue of patients experiencing motor fluctuations in addition to therapy with various forms of levodopa.

About Cynapsus Therapeutics

Cynapsus is a specialty pharmaceutical company developing an improved dosing formulation of an approved drug used to treat the symptoms of Parkinson’s disease. The prevalence of Parkinson’s disease, a chronic and progressive neurodegenerative disease that impacts motor activity, is increasing with the aging of the population. Current medications only control the disease’s symptoms; however, these treatments become less effective over time as the disease progresses. Between 25 percent and 50 percent of patients experience episodes in which they cannot move or talk. Cynapsus’ lead drug candidate, APL-130277, is an easy-to-administer, fast-acting and oral reformulation of an approved drug, apomorphine, used to rescue patients from these episodes. Cynapsus is focused on rapidly maximizing the value of APL-130277 by advancing it to pivotal studies in advance of a New Drug Application expected to be completed by the end of 2013, followed by out-licensing to an appropriate pharmaceutical partner. More information about Cynapsus (CTH: TSX-V) is available at and at

Contact Information

Cynapsus Therapeutics
Andrew Williams
(416) 703-2449 x253
[email protected]

Media contacts:

Russo Partners LLC
Derek Moates
[email protected]

Robert E. Flamm, Ph.D.
[email protected]

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cynapsus to be materially different from those expressed or implied by such forward-looking statements. Although Cynapsus has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cynapsus does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended ("the U.S. Securities Act") or any state securities law and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



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