BANGKOK - NewGenIvf Group (NASDAQ: NIVF), an Asian fertility services provider, announced today its plans for a reverse merger with COVIRIX Medical Pty Ltd, an Australian pharmaceutical company focused on developing antiviral therapies. The proposed transaction involves NewGenIvf issuing 102,890,000 of its ordinary shares in exchange for all equity interest in COVIRIX, valuing the deal at approximately $617.34 million.
This strategic move aims to combine NewGenIvf's fertility services with COVIRIX's pipeline of antiviral treatments, potentially enhancing pre and post-natal care for patients. The merger is expected to expand both companies' operational scale and market capitalization, potentially leading to increased research coverage and trading liquidity.
The non-binding term sheet indicates that COVIRIX shareholders would hold an approximately 85.8% equity interest in the merged entity. Additionally, COVIRIX is set to introduce investors to raise $6 million at $6 per share for NewGenIvf. The completion of this transaction is contingent on due diligence, definitive agreement negotiations, adequate financing, and approval by the board and shareholders.
Alfred Siu Wing Fung, CEO of NewGen, expressed optimism about the merger, highlighting the synergies and value creation opportunities for shareholders. Dr. Kumud Dhital, CEO of COVIRIX, underscored the significant global burden of Upper Respiratory Tract Infections and the potential of their broad-spectrum antiviral drug to address this unmet need.
The proposed merger follows pre-clinical studies by COVIRIX that showed positive results against multiple SARS-CoV-2 variants. Subject to successful clinical trials, the drug may also be used to prevent and treat other viral respiratory diseases.
NewGenIvf, with clinics in Thailand, Cambodia, and Kyrgyzstan, provides infertility treatment and reproductive technology services. COVIRIX Medical, based in Melbourne, specializes in repurposed antiviral and anti-inflammatory drugs for respiratory infections.
The transaction is subject to various conditions and there is no guarantee that a definitive agreement will be reached or that the proposed merger will be completed as currently contemplated, or at all.
This announcement is based on a press release statement from NewGenIvf Group.
InvestingPro Insights
As NewGenIvf Group (NASDAQ: NIVF) gears up for a pivotal reverse merger with COVIRIX Medical Pty Ltd, investors are closely monitoring the company's financial health and market performance. Recent data from InvestingPro shows a market capitalization of $16.46 million for NewGenIvf, reflecting the company's current valuation in the market.
Despite the potential for growth post-merger, it's important to note that NewGenIvf does not offer a dividend to its shareholders, which could influence investment decisions for those seeking regular income streams. Moreover, the InvestingPro Tips suggest that the stock has experienced significant price volatility, with a substantial return of 29.25% over the last week, yet a sharp decline of 86.91% over the past year. This volatility is a critical factor for investors to consider, especially in the context of the proposed merger.
Furthermore, NewGenIvf's price is currently at 7.95% of its 52-week high, indicating that the stock has been trading much closer to its lowest point than its peak over the last year. This could present an opportunity for investors who believe in the long-term prospects of the merger and are looking to buy in at a lower price point.
For investors seeking a deeper dive into NewGenIvf's financials and market performance, there are additional InvestingPro Tips available at https://www.investing.com/pro/NIVF. Subscribers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more insights to inform their investment strategies. With a total of 9 InvestingPro Tips listed for NewGenIvf, these could provide further clarity on the company's prospects and position in the market.
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