Relief Therapeutics (now MindMaze) signs non-binding LOI for Renexxion reverse merger

Relief Therapeutics Holding SA (SIX: RLF) said on November 4, 2024 that it had signed a non-binding letter of intent for a reverse merger with Renexxion, Inc., a privately held U.S.-based clinical-stage biotechnology company focused on gastrointestinal disorders. The release was filed on Form 6-K on November 5, 2024 under the name MindMaze Therapeutics Holding SA. The release itself does not mention a name change, so the company is identified here as Relief, the name it uses in the release.

The terms

Relief would acquire all outstanding Renexxion shares in exchange for newly issued Relief shares, subject to shareholder approval and other conditions. The valuations are USD 100 million for Relief's fully diluted equity and USD 260 million for Renexxion's equity, each adjusted for cash held at closing. The initial merger ratio would give about 72.2% of the combined company to Renexxion shareholders and 27.8% to Relief shareholders.

The letter also provides a one-year post-closing reset that adjusts the ownership split based on the combined company's market value at that time, within certain parameters. Relief says the reset is meant to protect its legacy shareholders. The combined shares would keep trading on the SIX Swiss Exchange and be quoted on OTCQB.

Conditions and timetable

The companies aim to sign a definitive merger agreement by December 31, 2024. Completion depends on further due diligence, a definitive agreement, a concurrent private financing by Renexxion, and regulatory and shareholder approvals. The release says there can be no assurance that a definitive agreement will be reached. It does not give the size of the Renexxion financing or a closing date.

Relief chairman Raghuram Selvaraju called the combination "the most promising path to deliver sustained value for our shareholders."

Renexxion and naronapride

Renexxion's lead compound is naronapride, which the release describes as a potential best-in-class, highly selective dual-action 5-HT4 agonist and D2 antagonist prokinetic. Naronapride is in a Phase 2 trial for gastroparesis, the MOVE-IT study, a 320-patient, placebo-controlled Phase 2b trial run with a European partner. Following FDA clearance of the investigational new drug application, the trial has expanded to up to 25 sites across the United States. The release says top-line results are anticipated in 2025.

The release gives no efficacy numbers. It says the drug has accelerated gastric emptying in healthy volunteers and relieved symptoms in a range of Phase 2 studies of functional GI disorders, without giving the results. It also argues that existing treatments such as metoclopramide carry significant safety concerns, including a black-box warning. Those are Renexxion's characterizations, not results from a head-to-head study.

Renexxion has also received FDA clearance for an investigational study of naronapride in proton pump inhibitor non-responsive symptomatic gastroesophageal reflux disease, or PPI-nrsGERD. The release says the condition affects up to 10 million people in the United States and that between 10% and 40% of patients do not reach adequate symptom control with proton pump inhibitors alone. Renexxion, with its European partner, has made PPI-nrsGERD the next focus of its development plan. The release gives no trial size or timeline for that indication.

Relief's own position

The release describes Relief as a commercial-stage company with marketed products and a pipeline in rare skin, rare metabolic and rare respiratory diseases. It is headquartered in Geneva. The release does not name the marketed products or give their revenue.

The financial record

The company's 2023 annual report on Form 20-F, filed April 30, 2024, shows revenue of CHF 6.3 million for 2023, against CHF 7.1 million for 2022. Research and development expense was CHF 1.3 million, down from CHF 12.4 million. The net loss was CHF 98.2 million, against CHF 50.8 million, and cash used in operations was CHF 17.6 million, against CHF 24.1 million.

Year-end 2023 cash and cash equivalents were CHF 14.6 million, against CHF 19.2 million a year earlier. The release values Relief's equity in U.S. dollars, while the annual figures are in Swiss francs, and the release gives no conversion, so the two cannot be compared directly from these documents.

What the release leaves open

The letter is non-binding. The release does not disclose the Renexxion financing, the reset parameters, the number of Relief shares to be issued or the cash either company would hold at closing.

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