M Pharmaceutical (CSE:MQ) has entered an agreement for the acquisition of the intellectual property associated with temporary controllable pseudobezoars through its purchase of RX Global Capital. Initially aproved as a dietary supplement for weight loss, the technology also has medical device applications. The company has agreed to pay roughly $3 million through the issue of about 125 million shares for the transaction.
As quoted in the press release:
33.6 million of these shares will be subject to a 3 year escrow, with 10% being immediately releasable, and the balance in 6 equal installments over the next 3 years. The Company will also issue approximately 84.6 million replacement warrants with an exercise price of $0.025 per warrant.
RX Global, which operates at arms-length to the Company, holds the exclusive world wide rights to various rights to the technology of controllable temporary pseudobezoars developed by Drs. Martin Mintchev, Michel Fattouche and Orly Yadid-Pecht through a private company EatLittle Inc. Initially developed as an innovative dietary supplement product for weight loss, for which it is approved in the European Union under the names EatLittle and EatLittle Extra, the technology has also various potential medical device applications.
In the weight loss application, the idea behind this patented technology is to have ingestible capsules which, quickly after being swallowed, expand dramatically in the stomach creating what are called controllable temporary pseudobezoars, foreign bodies in the stomach that are non-nutritional, but compact and permeable to fluids and gases. These foreign bodies take volume from within the stomach, effectively reducing the allocated space for food while being in constant dynamic contact with the gastric mechanoreceptors inducing satiety and fullness. Thus, without major dietary changes or dramatic nutritional modifications, users can achieve, non-invasively, results comparable to the ones achieved by bariatric surgery. After a predetermined period of time, the pseudobezoars fall apart in the stomach into their constituent fibers, which are of size that can be easily expelled from the body through natural peristalsis and without any side effects.
This acquisition should provide the Company with another strategic family of medical devices to add to its portfolio so as to diversify its product mix and reduce market sector risk.