08:39 AM EDT, 10/07/2024 (MT Newswires) -- Virios Therapeutics ( VIRI ) said Monday it has entered into a definitive share exchange agreement to merge with Wex Pharmaceuticals, another subsidiary of CK Life Sciences International, in an all-stock transaction.

Virios is a wholly owned subsidiary of CK Life Sciences International, and its indirect parent is Sealbond Ltd., the sole stockholder of Wex, and an indirect subsidiary of CKLS.

The fully diluted equity value for the combined entity is estimated at $105 million, excluding transaction fees.

Virios will change its name to Dogwood Therapeutics, effective Wednesday. The company's common stock will cease trading under the ticker symbol VIRI and will begin trading on the Nasdaq Capital Market under the ticker symbol "DWTX."

In connection to the merger, Virios is announcing a 25-for-1 reverse stock split, also effective Wednesday, resulting in outstanding shares of common stock of 1.1 million shares prior to the issuance of shares following the share exchange agreement. The split will automatically result in the conversion of 25 common shares of Virios into one new share of Dogwood. After the reverse stock split, Sealbond will hold around 94% ownership, while pre-merger Virios stockholders will retain about 6% ownership.

In addition to the merger, the company said it is raising $19.5 million in debt financing from a CK Life Sciences International affiliate in two tranches with $16.5 million funding at closing and an additional $3 million funded in Q1.

The financing for Dogwood will focus on the clinical development of three major assets: Halneuron for chemotherapy-induced neuropathic pain, IMC-1 for fibromyalgia, and IMC-2 for long-COVID treatment.

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