ESSA Pharma Inc. has significantly revised the terms of its previously announced business combination with XenoTherapeutics Inc., reducing the expected cash distribution to shareholders while extending contingent value rights as part of the amended transaction structure.
Revised Transaction Terms
Under the amended Business Combination Agreement announced September 24, 2025, ESSA shareholders are now expected to receive approximately $0.12 per share in cash upon closing, a substantial reduction from the originally estimated $1.91 per share aggregate distribution. This figure excludes the approximately $1.69 in cash previously distributed to ESSA shareholders on August 22, 2025.
The revised structure includes one contingent value right (CVR) per common share, which now represents the right to receive up to approximately $0.14 per CVR. These potential CVR payments of $0.14 per common share represent up to $6.7 million in aggregate that may be distributed to CVR holders depending on the outcome of certain contingent liabilities.
ESSA and XenoTherapeutics made these changes "in light of potential liabilities, associated expenses and the latest estimates of the Company's expected cash balance at closing," according to the company's announcement.
Meeting Postponement and Legal Proceedings
The pharmaceutical company has further adjourned its special meeting of shareholders, originally scheduled for September 29, 2025, to October 3, 2025, at 2:00 p.m. Pacific Time. The meeting will be held online via live interactive webcast.
ESSA intends to apply to the Supreme Court of British Columbia to amend the interim order obtained on August 5, 2025. The amended interim order would establish a new meeting date of October 3, 2025, a new deadline to deliver notices of dissent of October 1, 2025, and a new court hearing date for approval of the arrangement of October 7, 2025.
Transaction Structure and Participants
XOMA Royalty Corporation continues to act as structuring agent and intends to provide financing for the transaction. XenoTherapeutics Inc. is described as a Massachusetts-based 501(c)(3) research foundation focused on advancing xenotransplantation through scientific research, clinical development, and public education.
ESSA Pharma, previously focused on developing novel therapies for prostate cancer treatment, is being advised by Leerink Partners as exclusive financial advisor, with Blake, Cassels & Graydon LLP and Skadden, Arps, Slate, Meagher & Flom LLP serving as Canadian and U.S. legal counsel, respectively.
Shareholder Considerations
Shareholders who have already voted on the transaction and do not wish to change their vote do not need to take any further action. ESSA will file supplemental proxy materials reflecting the revised terms in due course.
The company noted that the additional adjournment will allow time for shareholders to consider and approve the amended agreement, providing transparency in the decision-making process as the transaction structure has been substantially modified from its original terms.
