DA: Biotech company Intrinsic Medicine announces a merger with special purpose acquisition company Phoenix Biotech Acquisition Corp

On October 31, 2022, Intrinsic Medicine, a therapeutic company that uses breast milk biology to change the gut-brain axis (GBA) and inflammatory diseases, Inc.
and special purpose acquisition company Phoenix Biotech Acquisition Corp.
(NASDAQ: PBAX) today announced that they have entered into a definitive business combination agreement
。 Upon completion of the transaction, which is expected to close in the first half of 2023, the combined company will be named Intrinsic Medicine, Inc.
, owned by Intrinsic Led by founding executive and CEO Alexander Martinez and President and COO Jason Ferrone, The combined company's common stock is expected to be listed on the NASDAQ Capital Market under the ticker symbol "INRX.
"
The transaction valued Intrinsic Medicine at $136 million
before the merger.

Intrinsic's product line consists of human lacto-oligosaccharide (HMO)-based drug candidates, HMOs It is a biologically active small molecule naturally occurring in human milk that has the potential to alter the gut microbiome and immune system in the treatment of gut-brain axis and inflammatory diseases through multiple mechanisms of action, including regulation

The expected cash resources will fund the Phase 2b clinical trial of Intrinsic's primary HMO-based drug candidate, OM002 (2′-fucosyllactose, or 2'FL), which is in Conducted in more than 400 patients with irritable bowel syndrome (IBS-C)) – estimated to affect approximately 5 million patients in the US alone – and advancing Intrinsic with additional clinical and regulatory milestones of drug candidate pipelines

The transaction reflects Intrinsic Medicine's $136 million pre-investment equity value and is expected to provide up to $178.
8 million in trust holding, hypothetically Phoenix's current shareholders have not redeemed and have not raised additional capital

The business combination is expected to close in the first half of 2023 and the combined company will be listed on NASDAQ under the ticker symbol "INRX"

"This milestone marks an important moment for
Intrinsiic.
With this commitment of PBAX, we will challenge the status quo and offer differentiated microbiome and immunomodulatory drugs that have the potential for people with it Individuals with GBA disease provide real relief," said
Alexander Martinez, CEO of Intrinsic.
"Today, we see patients and doctors talking about the need for better With GBA treatment, we believe Intrinsic is developing the right drug, at the right time, for the right indication
.
We are happy to be PBAX of management and board of directors are selected to include veteran life sciences venture capitalists and eager to take the next step
with them.
”

"After evaluating nearly 100 biotech companies, Intrinsic was an outstanding choice for our business combination," said
Chris Ehrlich, CEO and Director of PBAX.
"Intrinsic has the opportunity to demonstrate the potential benefits of its platform for patients with GBA disease and to launch a Phase 2b clinical trial
of IBS-C in the near future.
We are confident, experienced management team with the ability to rapidly advance its unique potentially transformative HMO drug pipeline and complete significant business initiatives with capital efficiency, ready to lead Intrinsic.
" As a public company
.
”

"Our planned placebo-controlled Phase 2b clinical study of OM002 in IBS-C will be the first of its kind to evaluate HMO-based drugs for GBA Safety and efficacy for patients with the disease," said
Jason Ferrone, President and President.
"We expect it in 2024 The primary data of the study was disclosed in the first half of the year, which we expect to be based on existing clinical, preclinical and toxicological data to support the biological activity, safety and tolerability of HMOs and to validate the therapeutic uses of these compounds," Mr.
Ferrone continued
.

HMO The third most abundant solid component in breast milk, it has been shown to exert beneficial effects through multiple mechanisms of action, including by beneficially altering the composition of the gut microbiome, increasing the production of beneficial metabolites of the microbiome, and directly regulating the immune system .
Since HMOs have been selected and preserved over millions of years of mammalian evolution, humans are exposed before birth and during early development, based on HMOs The potential for drugs with good toxicity and tolerability profiles in therapeutic settings makes them a potentially promising treatment option
for expanding patient populations compared to drugs with significant side effects or toxicity.

Intrinsic's product line consists of HMO drug candidates produced in synthetic biology based on some of the richest and most well-characterized HMOs, including: OM001 (3′-sialic acid lactose or 3'SL), OM002, and OM003 (6′-sialic acid lactose or 6′ SL), which believe it has the potential to treat GBA and certain inflammatory diseases, including irritable bowel syndrome (IBS), inflammatory bowel disease, rheumatoid arthritis, JIA, atopic dermatitis, and autism spectrum disorder
.
Intrinsic These drug candidates were selected based on their assessment of the probability of clinical success, taking into account published third-party clinical, preclinical and toxicological data indicating these HMOs The compound has the potential to improve the biological activity of the disease as well as the risk of low dose restriction toxicity
.
Intrinsic Commercial and practical factors such as market size, competitive landscape, and availability and scalability of clinical supply are also considered to select and prioritize
drug candidates.
Intrinsic of drug candidates are protected by a patent portfolio consisting of issued and permitted patents as well as pending patent applications covering therapeutic and human health support use methods that are owned by third parties or licensed exclusively to companies
.

In particular, third-party published 2'FL data reporting preclinical and exploratory clinical data for infants, healthy volunteers, and IBS patients supports Intrinsic in converting OM002 Clinical principles developed as potential new drugs for the treatment of both diseases IBS-C and diarrhoea-predominant IBS-D
.
This includes a recent 2' FL in over 300 patients representing all IBS subtypes In an open-label study of HMO mixtures, these patients reported clinically significant improvements
in IBS symptom scores such as abdominal pain, bloating, and stool consistency.
Therefore, Intrinsic believes OM002, if approved, has the potential to be the first drug capable of treating IBS-C and IBS-D, affecting an estimated more than 10 million patients in the United States alone
.

Upon completion of the business combination, Intrinsic expects to receive up to $178.
8 million in trust cash
, assuming that its public shareholders do not redeem shares in PBAX.
This business combination reflects: Intrinsic's $136 million pre-investment equity value
.
The boards of directors of Intrinsic and PBAX unanimously approved the proposed transaction, which is expected in 2023 Completed in the first half of the
year.
Completion of the transaction is subject to approval by PBAX shareholders and the satisfaction or waiver of certain other customary closing conditions
.

Spartan Capital Securities LLC acted as the primary placing agent
for PBAX.
Revere Securities LLC served Capital markets advisor
at Intrinsic.
Ropes & Gray LLP acted as legal counsel
to Intrinsic.
Cohen and Company Capital Markets（J.
V.
B.
Financial Group, LLC) serves as financial advisor
to PBAX.
Goodwin Procter LLP acted as legal counsel
to PBAX.

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