Shares of Stellar Biotechnologies Inc (NASDAQ:SBOT) spiked Friday a day after the company said in a regulatory filing that its shareholders have approved a reverse merger with Edesa Biotech Inc.
The deal was originally announced in March. Under the terms, Edesa shareholders have agreed to exchange their shares for newly issued shares of Stellar and will own about 90% of the new company. Stellar shareholders will hold the remainder.
Stellar’s stock recently traded up 68% to $2.02 a share on heavy volume.
READ: Stellar Biotechnologies in reverse merger with Edesa Biotech; shares shoot higher
The reverse merger, also called a share-exchange agreement, is expected to close in June. Stellar will change its name to Edesa Biotech Inc.
But Edesa, a private Canadian company based in Toronto, will become a wholly owned subsidiary of Stellar.
Stellar shareholders approved the deal on Thursday, according to Stellar’s Form 8-K filing with the US Securities and Exchange Commission.
Based near Los Angeles, Stellar is a manufacturer of KLH, keyhole limpet hemocyanin, a key immune-stimulating protein used in multiple immunotherapy development pipelines targeting Alzheimer's, lupus and cancer.
Edesa is a clinical stage company that has developed EBO1, a non-steroidal anti-inflammatory molecule for the treatment of allergic contact dermatitis.
Contact the author: patrick@proactiveinvestors.com
Follow him on Twitter @PatrickMGraham