Redwoods Acquisition Corp. (NASDAQ:RWOD) has entered into a definitive agreement to combine with biotech firm ANEW (OTC PINK:LEAS) at an enterprise value of $94 million.

Cheyenne, Wyoming-based ANEW is developing biosimilar cancer treatments and gene therapies for neurodegenerative conditions.

The combined company is expected to trade on the Nasdaq once the deal is completed in the fourth quarter of 2023.

Transaction Overview

Redwoods has about $54 million in its current trust and has not yet supplemented this with additional committed capital.

ANEW shareholders stand to earn up to 5,000,000 earnout shares if certain stock price performance targets are met.

The parties have not yet filed their merger documents or an investor presentation, but Redwoods’ profile page will be updated once additional information is made available.

Quick Takes: Like many SPAC teams, Redwoods’ leadership is taking a step outside of their direct professional experience with this deal, but that is arguably not as big of a leap in competencies that ANEW is now attempting for itself.

Redwoods CEO Jiande Chen has primarily worked as an executive at entities set up to promote IMAX film projection technology in China, while CFO Edward Cong Wang’s longest stint outside of financial services was as CEO of a fur and leather company.

ANEW, however, appears to be in the middle of its fifth major change in direction.

According to filings, the company was founded in Nevada in 2006 as Mammoth Energy Group with the goal of mining lithium, but had previously existed as a Canadian corporation called Technigen.

It then IPO’d in 2007 and later reincorporated in Wyoming in 2013. At some point, the company began working to set up a joint venture to import hemp-based products from Southeast Asia. This endeavor was abandoned in January 2020 and the next month the company was taken private by its newly-appointed CEO Jason Tucker.

After buying it out, Tucker set the company on a path to commercialize his intellectual property for a payments app that would allow for fee-free money and crypto transfers among friends. In June of that year, it formed a subsidiary called Strategic Asset Holdings and would operate under that name over the coming years, describing itself as an industrial equipment lessor.

But, you can forget most of that because six months later it was acquired by Dr. Joseph Sinkule for $110,000 and Tucker resigned. About a year later, it merged with a non-SPAC entity called Anew Acquisition Corp., changed its name to ANEW Medical and launched a 1-for-2500 reverse stock split.

Under this new vision, the company planned to develop rights for medicines and gene therapies including biosimilars to drugs currently marketed by Roche (SW:ROG) and Genentech. That was about two years ago, but the company’s landing page still announces “Strategic Asset Leasing is becoming: Anew Medical, Inc” and its goals for 2022 and 2023 appear to have not been updated since this auspicious transition.

Nonetheless, the goals laid out there for the past two years were to take advantage of the accelerated approval timeline for biosimilars to skip Phases I and II and launch Phase III studies for its generic bevacizumab competitor in 2024 with the goal of securing approval and a licensing deal around 2026.

Meanwhile, it has planned to develop gene therapies brought in from the Anew Acquisition vehicle, for which it expects to submit applications for EU and FDA trials in 2024. If granted orphan drug status, these would in theory be potentially nearing commercialization in 2027.

These gene therapies would attempt to use the s-KL protein hormone to protect brain neurons from degeneration from diseases like Alzheimer’s after being encoded by the Klotho gene. The company received 20 years of patent protection for this candidate therapy in the EU and the company also scooped up rights to distribute five generic EU cancer drugs in the US last October.

The company’s potential gene therapy market could grow to about 80 million patients by 2040 while the company’s biosimilar could cut into the market for bevacizumab, which currently generates about $16 billion in annual revenue.

But, the parties’ press release does not provide an update on the status of these various business lines, and the market cap of ANEW Medical on the pink sheets remains about $1 million

As of March of this year, the name change and stock split had also still not received approval from FINRA, so the company is still Strategic Asset Leasing officially, not to be confused with a fintech app developer, lithium miner or hemp importer. That was so 2020.

ADVISORS

• Company
  • Chardan is acting as M&A and capital markets advisor to ANEW.
  • Cyruli Shanks & Zizmor, LLP is acting as legal counsel to ANEW.
• SPAC
  • Loeb & Loeb LLP is acting as legal counsel to Redwoods.