Proactive Investors - Zyus Life Sciences Corp, which makes cannabinoid drugs to treat pain for osteoarthritis and bone cancer, announced recently that it has completed a reverse takeover of Phoenix Canada Oil Co Ltd, while also raising C$20.1 million, and is set to begin trading on the TSX Venture exchange (TSXV) under the symbol ‘ZYUS’ on June 19, 2023.
Phoenix Canada Oil is a long-standing, listed crude producer, Bloomberg reported.
“We tried to go the IPO route, but back then the markets were headed south and there were no takers because nobody wanted to be the lead investor,” Zyus Life Sciences CEO Brent Zettl said in a phone interview with the media outlet.
Zettl, who previously sold CanniMed Ltd to Aurora Cannabis Inc (TSX:TSX:ACB, NASDAQ:ACB) for C$1.2 billion in 2018, said he invested C$62 million of his own money into Zyus.
“You need money and I don’t have enough for the three drugs that we have in process,” he added.
Zettl noted that the company is looking to pursue further clinical trials for US Food and Drug Administration (FDA) approvals for its treatments, and is using a reverse takeover to fund its capital needs.
He said Zyus decided to go the reverse takeover route, which involves buying a company with an existing public listing, because the “market can turn on you” doing an IPO, but with a reverse takeover “you’re not trying to get wide investor participation,” which can lower the costs for marketing a deal and will likely lead to less regulatory scrutiny.
According to TMX Group (TSTSX:X:X) data, IPOs on the TSXV were down 62% from last year’s level through the end of May, raising just C$7.8 million compared with C$116.5 million in the same period a year ago.