Odyssey announces agreement to combine with BenevolentAI
Article continues below
The terms of the Combination value BenevolentAI at a pre money valuation of €1.1 billion and a post money valuation of up to €1.5 billion.
Net transaction proceeds are expected to be up to €390m including €135m of fully committed PIPE and €300m of gross cash held in escrow by Odyssey. The funds will be used to accelerate BenevolentAI's development, scale up its clinical pipeline, continue investment in its technology platform, consolidate its leadership position in AI enabled drug discovery and deliver multiple value inflection points in the near future.
The combination of Odyssey, a €300m Euronext Amsterdam listed special purpose acquisition company focused on European healthcare and TMT growth companies, and BenevolentAI, a leading clinical stage AI drug discovery company, represents the largest European SPAC merger announced to date and one of the largest Euronext Amsterdam biotech listings ever.
Founded in 2013, BenevolentAI has built a proprietary AI based drug discovery platform that, combined with the scientific expertise of approximately 300 world class scientists and technologists and full wet lab capabilities, enables the delivery of novel drug candidates with a higher probability of clinical success than those developed using traditional methods. BenevolentAI has a consistently proven track record of scientifically validated discoveries.
AI driven drug discovery is at an inflection point and represents a significant growth opportunity.
AI led drug discovery is becoming a powerful tool to accelerate biomedical innovations and discoveries, with the potential to achieve materially higher clinical success rates and drive efficiencies across the drug discovery process through the use of data driven insights and analysis.
The sector is now at an inflection point and is increasingly becoming a strategic focus area for pharma companies, attracting significant capital and investment.
BenevolentAI is a leader in AI enabled drug discovery with a highly promising pipeline.
BenevolentAI is a recognised industry leader in AI enabled drug discovery; its existing pipeline alone could potentially address a patient base of over 260 million people with a current market opportunity above $30 billion.
Through the combined capabilities of its leading Knowledge Graph, AI enabled BenevolentAI Platformâ„¢ and wet lab facilities, BenevolentAI is well positioned to not only identify new drug targets for complex and intractable diseases, with higher success rates than traditional drug discovery methods, but also to develop these targets at pace while generating experimental data at scale to fuel continuous innovation.
BenevolentAI has a proven scientific and commercial track record.
All of BenevolentAI's 20+ in house drug programmes are platform generated, discovered and developed using the company's AI and machine learning tools. This includes a novel target for treating ulcerative colitis and an atopic dermatitis programme in the clinic.
BenevolentAI's multi target commercial collaboration with AstraZeneca delivered the first novel AI generated target for chronic kidney disease into AstraZeneca's portfolio, and this collaboration is now being expanded. BenevolentAI also successfully identified Eli Lilly's baricitinib as a treatment for COVID 19, which is now FDA emergency use approved.
BenevolentAI has a highly versatile and diversified business model.
BenevolentAI is highly versatile and diversified, combining work across multiple therapeutic areas with the ability to develop pre clinical and early stage clinical assets in house, to out license or to collaborate with partners on new drug discovery and development.
BenevolentAI has an experienced management team supported by industry leading Board members and scientific advisors.
BenevolentAI is led by an experienced management team with an outstanding track record in healthcare and technology, supported by industry leading Board members and scientific advisors.
Highly attractive value proposition with significant and tangible upside.
Odyssey believes the investment opportunity represents an attractive value proposition with significant upside, as evidenced by the extensive pipeline of drug candidates and the potential of the BenevolentAI Platformâ„¢.
Odyssey has agreed to combine with BenevolentAI at a pre money valuation of €1.1 billion and a post money valuation of up to €1.5 billion, prior to any redemptions. The combination will be effected by way of a share exchange.
BenevolentAI shareholders will receive Class A ordinary shares of Odyssey in exchange for their shares of BenevolentAI. Their BenevolentAI options and RSUs will convert into options and RSUs of Odyssey. As a result of the share exchange, BenevolentAI will become a wholly owned subsidiary of Odyssey, which, following the closing of the transaction, will change its name to BenevolentAI.
BenevolentAI is expected to benefit from a strong cash position, including €135m fully committed PIPE, €300m of gross cash held in escrow by Odyssey (prior to any redemptions) and an estimated €56m of cash on BenevolentAI's balance sheet as at 30 November 2021.
Assuming that no Odyssey shareholders elect to redeem their Ordinary Shares in connection with the transaction, current BenevolentAI shareholders are expected to own 67.4% of the combined company (including vesting RSUs and options), Odyssey shareholders (including the Sponsor) 23.5%, and PIPE investors 9.1% of the post transaction pro forma equity, respectively.
None of the current shareholders of BenevolentAI will sell stock as part of the transaction, and BenevolentAI's core shareholders and current members of the board of directors of BenevolentAI, representing collectively approximately 86% of the current capital of BenevolentAI, will be subject to a lock up of 180 days, subject to limited market standard exceptions.
The Board of Directors of Odyssey and the Board of Directors of BenevolentAI have each unanimously approved the proposed transaction.
The closing of the transaction is subject to the satisfaction or waiver of customary closing conditions, including the approval by a general meeting of Odyssey's shareholders and a minimum cash balance at closing (see "Conditions to Closing" below), and is expected to close in Q1 2022.
Following the closing of the transaction, the combined company will be listed on Euronext Amsterdam and will trade under the ticker symbol "BAI".
The combined company will be led by the current CEO of BenevolentAI, Joanna Shields, alongside BenevolentAI's industry leading management and research team. Olivier Brandicourt, healthcare expert to Odyssey, will join the combined company's Board of Directors alongside Jean Raby, Odyssey's current co CEO. Dr Francois Nader, current Chairman of the Board of Directors of BenevolentAI, will assume the role of Chairman of the Board of Directors of the combined company. The combined company will be headquartered in London.
The combined entity will be managed by a board of directors composed of nine directors consisting of seven directors nominated by BenevolentAI prior to the closing, including Dr. Francois Nader, Dr. Olivier Brandicourt and Jean Raby (who will resign from his position as co CEO of Odyssey). ■