DRC Medicine Ltd., a Japanese biotechnology company developing advanced medical technologies, announced a business combination agreement with Ribbon Acquisition Corp. (NASDAQ: RIBB) that will result in the company becoming publicly traded on the NASDAQ Global Market with an implied initial pro forma equity value of approximately $422.15 million.
The transaction is expected to deliver cash proceeds of around $50.42 million to DRC Medicine, assuming no redemptions, to fund the company's business operations including clinical trials and medical device certification. Current DRC Medicine shareholders will retain 100% of their equity and continue to own approximately 82.91% of the combined company on a pro forma basis.
Proprietary Technology Platform
DRC Medicine is best known for its proprietary Hydro Silver Titanium® technology, initially applied in consumer hygiene products such as masks and towels. The company is now advancing this technology to obtain medical device certification as among the world's first therapeutic masks for seasonal allergic rhinitis.
"This transaction will give us the resources that will enable us to capture the positive trends in our industry," said Dr. Marumi Okazaki, President & CEO of DRC. "Given the growth of airborne allergens, respiratory diseases and infectious diseases, increasing demand for better respiratory protection mask and faster and a more accurate IVD kits, we intend to invest in more IVD kits paired with AI-powered Apps in achieving universal diagnostics."
Expanding Pipeline and Strategic Acquisitions
Beyond medical devices, DRC Medicine is developing a pipeline of In Vitro Diagnostic (IVD) kits for infectious diseases and allergen detection, combining its cell-free protein synthesis technology with AI-powered applications. The company is also in final negotiations to acquire an innovative ATP-enhancing drug for Parkinson's disease from a drug development company, with the drug currently in clinical trials.
The diverse portfolio is driven by a focus on unmet medical needs, AI-assisted discovery, and global healthcare infrastructure transformation. The company aims to empower the general public in guarding their health and fighting against allergens, respiratory diseases, and infectious diseases.
Transaction Structure and Timeline
As part of the proposed transaction, an intermediate holding company incorporated in Japan will acquire the shares of DRC Medicine, after which it will engage in a share exchange transaction with the company's shareholders. Following this restructuring, Ribbon will merge with and into a merger subsidiary, with the merger subsidiary continuing as the surviving company and remaining a wholly owned subsidiary of DRC Medicine.
The proposed transaction implies a pre-money equity value of $350 million for DRC on a fully diluted basis. The company expects to have access to approximately $50 million in cash from Ribbon's IPO proceeds held in trust, assuming no redemption by Ribbon's shareholders.
Mr. Angshuman (Bubai) Ghosh, Chairman/CEO of Ribbon, commented: "This business combination agreement with DRC is a great opportunity to enter into an exciting and accelerating growth healthcare and biotechnology industry. We believe its highly capable and experienced management team with all of the founders with substantial experience in developing innovative technologies, supported by their technology-savvy specialists and R&D team who are committed to pioneering innovations, will enable DRC to continuously innovate and advance their healthcare and biotechnology applications."
Founded in 2007 and headquartered in Tokyo, DRC Medicine has positioned itself to address significant global health challenges through its innovative technology platform and strategic focus on respiratory health, infectious disease diagnostics, and neurological therapeutics.
