TORONTO, ON, June 13, 2024 – HEALWELL AI Inc. (TSX: AIDX, OTCQX: HWAIF), a healthcare technology company focused on AI and data science for preventative care, is pleased to announce that it has entered into an agreement to acquire BioPharma Services Inc. (“BioPharma”), a leading full service Contract Research Organization (“CRO”) specializing in early clinical trials, for consideration of $11.9 million, subject to standard adjustments, in addition to a performance earnout of up to $2.5 million (the “Transaction”), from Think Research Corporation (“Think Research”). Based out of Toronto, Ontario, BioPharma has an impressive record of successfully implementing bioequivalence and early-stage clinical trials, with over 2,200 clinical trials completed with approximately 250 pharmaceutical companies since inception.
BioPharma specializes in the conduct of Phase 1/2a and Bioequivalence clinical trials for international pharmaceutical companies worldwide. With a focus on scientific integrity, operational excellence, and adaptive processes tailored to each client’s needs, BioPharma has established a reputation for delivering high-quality results in the pharmaceutical and biotech industries. With the acquisition, BioPharma will be able to expand on its existing CRO capabilities to now include patient trials, across all phases of drug development. HEALWELL’s use of extensive patient databases and advanced AI-enabled algorithms will allow BioPharma to focus on patient-centered clinical research, especially in rare diseases where the global treatment market value exceeds over $200 Billion US Dollars per year(2). Furthermore, integration with HEALWELL’s network will provide access to the largest outpatient clinic network in Canada powered by WELL Health Technologies Corp. (TSX: WELL) allows BioPharma to conduct patient trials at HEALWELL physician sites where the use of AI driven recommendations will aid in accelerating recruitment and improving patient outreach.
HEALWELL’s acquisition of BioPharma will significantly expand the Company’s clinical research offerings and capabilities, complementing its existing clinical research business operated through its subsidiary, Canadian Phase Onward (“CPO”), and creating synergistic opportunities to capitalize on HEALWELL’s artificial intelligence and data management capabilities. HEALWELL’s current technology and AI capabilities can unlock tremendous value and create efficiencies in clinical trials by improving trial design and architecture, accelerating trial mechanics, improving candidate eligibility screening, and, as it expands into later-phase trials, enhancing patient recruitment and screening processes. This strategic acquisition also creates opportunities for HEALWELL subsidiaries, Khure Health and Pentavere Research Group, to harness the data generated and further expand real-world evidence (RWE) clinical study work.
Dr. Alexander Dobranowski, CEO of HEALWELL commented, “We are thrilled to announce the acquisition of BioPharma, one of the largest Canadian owned and operated CROs, a strategic move aimed to enhance HEALWELL’s own clinical research capabilities and bring new AI-driven advancement to the pharmaceutical industry. Clinical research is a critical focus for HEALWELL and is essential in advancing preventative care in Canada as well as globally. BioPharma’s multidisciplinary team of experts, state-of-the-art facilities, and commitment to innovation make it a trusted partner for pharmaceutical innovation and clinical research advancements. We look forward to welcoming the talented Toronto based 250-person team to the HEALWELL family and together realizing the synergies between BioPharma and our current business units. We are confident that integrating our AI technology, and access to WELL Health’s expansive clinical network with BioPharma’s extensive clinical trial experience will unlock new efficiencies as well as material new revenue growth opportunities.”
Anna Taylor, Managing Director at BioPharma, stated, “This acquisition is not just a joining of forces; it’s a transformation. HEALWELL AI’s various platforms will help expand our clinical trial capabilities. The acquisition allows us to leverage HEALWELL’s data science expertise to further improve our service offerings. The integration of AI in our processes such as trial design, feasibility and risk assessment, patient eligibility stratification, and results analysis will significantly enhance our capabilities. By expanding our reach to patient trials, including rare disease trials, BioPharma Services will enhance the medical journey for patients, families, and communities.”
The Transaction is expected to be highly accretive as it provides HEALWELL with high-quality life sciences-oriented revenue and a highly experienced team. BioPharma is expected to generate between $35 to $40 Million of revenue in 2024 with approximately 5% EBITDA(1) operating margins based on YTD performance and has generated approximately $31 million of revenue in the trailing 12-month period. With positive and growing EBITDA in the most recent two quarters, BioPharma’s business is also reflecting a rebound in spending from its broad base of biotechnology and pharmaceutical customers, indicating strong signs of further growth in 2024.
Transaction Description
HEALWELL will acquire 100% of the outstanding shares of Bio Pharma for the following consideration: approximately $3.9 million to be paid in cash at closing; $2.5 million to be paid by way of the issuance of a promissory note at closing, secured against the shares of BioPharma and maturing on the first anniversary of the closing; approximately $4.2 million to be paid by way of the issuance of Class A Subordinate Voting Shares of the Company (“Subordinate Voting Shares”) at an issue price equal to the volume-weight average trading price for the 15 trading days ending as of June 12, 2024 (the “VWAP”); $1.25 million in value of Subordinate Voting Shares to be issued on closing based on the VWAP and placed into a four-month escrow for indemnity purposes (the “Holdback Release Date”); and up to $2.5 million to be paid as an earn-out over the three years following the closing.
Closing of the Transaction is subject to a number of standard conditions precedent, including conditional approval from the Toronto Stock Exchange. Fairmount Partners LP acted as exclusive financial advisor to Think Research in the Transaction.
The Toronto Stock Exchange has not considered or made any determination on the merits of the proposed Transaction and has neither approved nor disapproved of this press release.
Dr. Alexander Dobranowski
Chief Executive Officer
HEALWELL AI Inc.
HEALWELL is a healthcare technology company focused on AI and data science for preventative care. Its mission is to improve healthcare and save lives through early identification and detection of disease. Using its own proprietary technology, the Company is developing and commercializing advanced clinical decision support systems that can help healthcare providers detect rare and chronic diseases, improve efficiency of their practice and ultimately help improve patient health outcomes. HEALWELL is executing a strategy centered around developing and acquiring technology and clinical sciences capabilities that complement the Company’s road map. HEALWELL is publicly traded on the Toronto Stock Exchange under the symbol “AIDX” and on the OTC Exchange under the symbol “HWAIF”. To learn more about HEALWELL, please visit https://healwell.ai/.
BioPharma Services is a leading contract research organization (CRO) based in Toronto, Canada, specializing in Phase 1 and Phase 2a clinical trials. With a focus on scientific integrity, operational excellence, and adaptive processes tailored to each client’s needs, BioPharma Services has established a reputation for delivering high-quality results in the pharmaceutical and biotech industries. BioPharma’s comprehensive services also include Bioanalysis at their GLP Certified Laboratory, Scientific and Regulatory Affairs, Biostatistics and Safety Data Analysis (CDISC), Data Management and Medical Writing. Visit www.biopharmaservices.com for more details.
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. NIA has received compensation from AIDX of US$50,000 cash for a six-month marketing contract. This message is meant for informational and educational purposes only and does not provide investment advice.
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