TEL AVIV - SciSparc Ltd. (NASDAQ:SPRC), a clinical-stage pharmaceutical company, announced its intent to divest its entire ownership interest in MitoCareX Bio Ltd., a venture focused on cancer drug development. The proposed sale to a U.S.-based public company is outlined in a non-binding letter of intent (LOI), which details a multi-phase transaction potentially worth up to $8 million.
SciSparc, which holds a 52.73% stake in MitoCareX, will initially sell 27% of its shares for $700,000 in cash. The subsequent sale of the remaining interest is based on valuations of $8 million for the purchaser and $5 million for MitoCareX, inclusive of the initial cash consideration. Additional milestones could elevate the deal's value to $7 million.
The valuation of MitoCareX reflects a 47% increase from SciSparc's initial investment, marking a notable appreciation in the venture's worth. The transaction's terms remain subject to negotiation and the execution of definitive agreements.
Oz Adler, CEO of SciSparc, expressed that the agreement lays the groundwork for future value growth, aligning with the company's strategy to boost shareholder value. Notably, Amitay Weiss and Liat Sidi, members of SciSparc's board, also hold positions on the board of the purchasing company, indicating a close relationship between the entities.
SciSparc specializes in cannabinoid-based pharmaceuticals, with an array of drug development programs targeting conditions such as Tourette Syndrome, Alzheimer's disease, pain, and status epilepticus.
The information in this article is based on a press release statement. It should be noted that forward-looking statements involve risks and uncertainties, and the actual results could differ from those projected in the press release. SciSparc has cautioned that there is no assurance the proposed transaction will be completed or that it will fulfill its aim of enhancing shareholder value.
In other recent news, SciSparc Ltd. received FDA approval to proceed with Phase IIb clinical trials for its drug candidate SCI-110, intended for the treatment of adults with Tourette Syndrome. This development follows the company's Investigational New Drug application submitted recently. The upcoming trials will evaluate the efficacy, safety, and tolerability of SCI-110.
In addition, SciSparc has extended a $1.85 million bridge loan to AutoMax Motors Ltd., negating the need for previously agreed closing financing in the merger plan between the two entities. The company also inked an exclusive patent license agreement with Polyrizon Ltd. for the out-licensing of its SCI-160 program aimed at treating pain.
On the clinical front, SciSparc initiated a trial for its proprietary SCI-210 therapy, aimed at treating symptoms of autism spectrum disorder in children. The company also announced the appointment of Professor Nir Peled, a renowned oncologist, to the scientific advisory board of its cancer-focused venture, MitoCareX Bio Ltd. These are the recent developments in SciSparc's operations.
InvestingPro Insights
As SciSparc Ltd. (NASDAQ:SPRC) navigates its strategic move to divest from MitoCareX Bio Ltd., investors are closely monitoring the company's financial health and market performance. Recent data from InvestingPro provides a snapshot of SciSparc's current standing in the market. With a market capitalization of just $0.86 million, the company's size is relatively small, which can often lead to higher volatility in stock performance. Despite a challenging period, SciSparc's revenue has shown a significant uptick, with a growth of 113.73% over the last twelve months as of Q4 2023, according to InvestingPro Data.
However, the company's stock has faced a steep decline, trading near its 52-week low and experiencing a significant drop of over 93% in the past year. This trend aligns with an InvestingPro Tip indicating that the stock has taken a considerable hit in various time frames, including the last week, month, and six months. Additionally, SciSparc’s price/book multiple is at a low of 0.11, suggesting that the market may be undervaluing the company's assets relative to its share price.
On a more optimistic note, one of the InvestingPro Tips for SciSparc highlights that analysts are expecting net income growth this year. This could signal potential for recovery and a brighter financial outlook, which may be of interest to investors seeking turnaround opportunities. It should also be noted that SciSparc holds more cash than debt, which could provide some financial flexibility in its operations and investment decisions.
For investors looking for a deeper dive into SciSparc's financials and market prospects, InvestingPro offers additional tips, providing a comprehensive analysis of the company's performance and potential. There are 17 more InvestingPro Tips available for SciSparc, which can be accessed by visiting the dedicated page for the company at https://www.investing.com/pro/SPRC.
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