MATEON ENTERS INTO MERGER AGREEMENT WITH POINTR DATA TO LEVERAGE DISRUPTIVE AI TECHNOLOGY IN ITS INNOVATION-DRIVEN QUEST FOR A CURE OF CANCER

On August 19, 2019 Mateon Therapeutics, Inc. (OTCQB:MATN) ("Mateon") and PointR Data Inc. (PointR), a privately-held, developer of high performance cluster computer and artificial intelligence company, reported that they have entered into a definitive agreement with respect to a merger, creating a publicly traded artificial intelligence ("AI") driven immuno-oncology company with a robust pipeline of first in class TGF-β immunotherapies for late stage cancers such as gliomas, pancreatic cancer and melanoma (Press release, Mateon Therapeutics, AUG 19, 2019, View Source [SID1234538861]).

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"We believe that the merger of Mateon and PointR will create a combined company that can generate shareholder value through a promising pipeline of next generation immunotherapies leveraging high performance, personalized and secure cluster computer for AI driven drug development and personalized healthcare deliveries," said Vuong Trieu, Ph.D., Chairman and Chief Executive Officer of Mateon. "This is culmination of over a year of working together on disruptive technologies for drug development and healthcare."

"We are thrilled at the opportunity of vertically integrating AI and drug development capabilities under one roof. We expect to quickly identify promising new therapeutic opportunities for various diseases delivering compelling business value," said Saran Saund, PointR’s Chief Executive Officer. "The prospect of interdisciplinary teams from biotech and technology sectors can significantly accelerate drug candidates towards the clinic while expanding our proprietary datasets."

"The integration of AI and machine learning algorithms in new drug discovery and lead optimization, design of biomarker-driven clinical studies as well as identification of biomarker-enriched patient populations most likely to respond to new anti-cancer drug candidates are potentially paradigm-shifting initiatives with a very high scientific merit. AI-based cognitive technologies have the potential to streamline our clinical development strategy for the portfolio drug candidates, including our lead compound OT101, by amplifying our knowledge and understanding of the target cancers, their biology as well as structural and pharmacologic characteristics of the lead compounds," said Dr. Fatih Uckun, MD, PhD, the Chief Medical Officer of Mateon. "Furthermore, the combined use of AI and the Blockchain technology supported by the PointR AI computing platform has a very high impact potential for better cancer care and especially patient-tailored cancer treatments," he added. Dr. Uckun explained: "Blockchain technology-powered clinical development platforms for the anti-cancer drug candidates in our pipeline, including our lead compound OT101 could (i) expedite multi-stakeholder collaboration via optimized peer-to-peer data sharing for success of R&D efforts aimed at a cure for difficult-to-treat forms of cancer, (ii) amplify data management capabilities that are critical for the clinical development of the most promising drug candidates, and (iii) enable rapid identification of best clinical study sites and investigators as well as optimized clinical protocol designs to ensure high quality clinical trials with streamlined feasibility checks and very short study start-up and rapid completion times.

Merger Terms

Under the terms of the merger agreement, PointR will be merged into and become a wholly owned subsidiary of Mateon. Holders of PointR common stock prior to the merger will be entitled to $15,000,000 payable in shares of Mateon common stock, calculated at of $0.18 per share. The merger agreement also provides for two additional tranches of merger consideration based on: (1) PointR’s achievement of proof of concept and (2) licensing deal for AI based asset for minimum of $100 million in life-time license fees of which at least $10 million has been received. Each tranche is for $7,500,000 in value of additional Mateon common stock, based on the market price at the time of payment, subject to a minimum value of $0.18 per share.

The merger is subject to customary conditions to closing. In addition, Mateon’s obligation to close is conditioned on PointR providing audited financial statements that would be required for Mateon to comply with the SEC’s filing requirements. PointR’s obligation to close is conditioned on Mateon raising a minimum of $10 million in an equity financing transaction or $5 million in a commercial agreement. In addition, PointR’s obligation is conditioned upon Mateon to grant a license to allow the former shareholders of PointR to use elements of the technology in fields outside of pharmaceutical development. Mateon and PointR intend to actively seek additional capital to support the combined business, no additional equity financing or commercial agreement is in place at this time. The merger is not expected to close until such financing is secured.