Relief Therapeutics' Merger with Renexxion: A Strategic Move into Gastrointestinal Disorders

Relief Therapeutics Holding SA (SIX: RLF, OTCQB: RLFTF, RLFTY) announced a significant update on its potential reverse merger with Renexxion, Inc., a privately-held U.S.-based clinical-stage biotechnology company specializing in gastrointestinal (GI) disorders. The proposed merger, expected to be finalized in Q1 2025, signals Relief Therapeutics' strategic expansion into the high-growth GI disorders market.

The deal, if completed, will see Relief Therapeutics acquire all outstanding shares of Renexxion in exchange for newly issued shares of Relief, subject to shareholder approval and other customary conditions. The initial merger ratio is expected to allocate approximately 72.2% ownership to Renexxion shareholders and 27.8% to Relief Therapeutics shareholders. Post-transaction, the combined entity's shares are anticipated to continue trading on the SIX Swiss Exchange and remain quoted in the U.S. on OTCQB.

Renexxion's lead compound, naronapride, is a potential best-in-class, highly selective dual-action 5-HT4 agonist/D2-antagonist prokinetic agent designed to enhance GI motility with minimal systemic absorption. Naronapride is currently being studied in a Phase 2 clinical trial for gastroparesis and has received FDA IND clearance for proton pump inhibitor non-responsive symptomatic gastroesophageal reflux disease (PPI-nrsGERD). This promising pipeline, along with Renexxion's strategic European partner in GI therapeutics, makes the company an attractive acquisition target for Relief Therapeutics.

The proposed merger is expected to strengthen the combined company's competitive position in the biotech industry, broaden access to capital, and provide new growth initiatives through their complementary resources and expertise. This potential strategic merger is anticipated to enhance shareholder value, broaden access to capital, and accelerate the delivery of innovative therapies to patients.

Relief Therapeutics' portfolio offers a balanced mix of marketed, revenue-generating products, proprietary, globally patented TEHCLO™ and Physiomimic™ platform technologies, and a targeted clinical development pipeline consisting of risk-mitigated assets focused in three core therapeutic areas: rare skin diseases, rare metabolic disorders, and rare respiratory diseases. By integrating Renexxion's GI disorder therapies, Relief Therapeutics will expand its therapeutic focus and diversify its revenue streams.



The magnitude of the deal surprised some market observers, with BTIG analyst Marie Thibault noting, "The size and the target of this deal catches us off-guard. However, we do think Renexxion is a high-quality target and fits Relief Therapeutics' businesses and company culture well." In a separate note, Oppenheimer healthcare equity strategist Jared Holz called the deal "perhaps somewhat above the range in terms of valuation many may have expected."

Relief Therapeutics stock is up 15.2%, to $1.25, in Tuesday morning trading, reflecting investor confidence in the proposed merger. The price implies high investor confidence that the deal will close, and little interest in the potential CVR payments. Biopharma investors have been burned before on CVRs in deals involving other companies, and have learned to discount the likelihood they will pay out.

The proposed merger between Relief Therapeutics and Renexxion, Inc. can help the combined entity mitigate regulatory and market risks in the biotech sector by providing a more diversified pipeline, increased financial flexibility, and a broader global footprint. By leveraging the complementary strengths of both companies, the combined entity can better navigate the challenges and opportunities presented by the dynamic biotech sector.