
WntResearch CEO comments on reverse acquisition
After the disappointing results with Foxy-5 last year, WntResearch has been looking for a way to secure shareholder value. Now, The Board of Directors propose a reverse acquisition of the Swedish insuretech company OPSY for approximately SEK 120 million. BioStock contacted Per Norlén, CEO of WntResearch, to find out more.
In September last year, WntResearch announced that the drug candidate Foxy-5 did not show sufficient clinical effect in its clinical phase II trial and that further advancement of the project was unmotivated. After a preliminary analysis of 27 patients, Foxy-5 was found to have a good safety profile but lacked clinically significant effect on tumor size and lymph nodes. Following the results, the company decided to stop the study and focus on reducing costs and exploring opportunities to merge with another company to secure shareholder value.
The solution presented is to acquire the Swedish privately owned insuretech company OPSY for approximately SEK 120 million. Payment is made through promissory notes that are set off in full against newly issued shares in WntResearch. In the transaction, WntResearch has been valued at SEK 9.2 million and existing shareholders will thus have an ownership stake of 7.1 percent in the combined company.
Newcomers in insurance
OPSY is a Swedish insurtech company that develops digital solutions for automating claims processes in the insurance industry. Since its launch in December 2023, OPSY has signed agreements with five Swedish insurance companies, with a potential annual revenue of approximately SEK 50 million. The company states that in January of this year, it had monthly revenues corresponding to sales of SEK 4.5 million on an annual basis.
– The acquisition of OPSY represents a unique opportunity to take our platform and services to the next level and reach more customers through a listed environment. We look forward to working with WntResearch’s shareholders to continue to develop the industry through innovation and efficiency, while creating value for all stakeholders, writes Arne Thor, founder and CEO of OPSY.
Conditional approval at an extraordinary general meeting
The acquisition of OPSY is subject to approval by an Extraordinary General Meeting in WntResearch, scheduled for March 7, 2025. In connection with this, the Board of Directors has prepared a balance sheet showing that the company’s equity is less than half of the registered share capital. The alternatives are either to enter liquidation, or to continue the business with OPSY’s business direction.
In the acquisition, the Board of Directors intends to propose that the company continue operations. The proposal is supported by three shareholders with a combined ownership of approximately 6.6 percent of WntResearch, who intend to vote in favor of the transaction.
Following the acquisition, the plan is to change the name to Opsy Holding AB and continue OPSY’s operations as a listed company on the Spotlight Stock Market, subject to approval from Spotlight.
CEO comments
BioStock contacted Per Norlén, CEO of WntResearch to find out more.
Firstly, Per, what are your thoughts on having found a way forward for the company?
– I am very pleased that we have found an opportunity to continue running the company, even if it will be with new content. OPSY has the potential to generate black numbers already this year and my assessment is that there are very good growth opportunities. But I do, of course, have mixed feelings about seeing our previous activities coming to an end.
– The gloomy study results last autumn are still a heavy burden to carry and have made it really challenging to identify any external party that is willing to push the candidate, or patent portfolio, forward. Yet, to avoid liquidation while giving our owners a new exciting opportunity going forward, is some consolation.
Can you describe the process around finding a solution and tell us why this particular solution was the best?
– We initially focused on evaluating companies with ongoing clinical drug development, and conducted several parallel negotiations, which dragged out the process. However, the current financial climate is very grim for biotech companies, and the fact that OPSY already has a product that generate revenue, with the opportunity to become a dominant player in its market, meant that there were greater upsides in this acquisition than in any of the other options we evaluated.
– With the acquisition of OPSY, value is created both based on our stock exchange listing and our owners, as well as on cash and potential loss deductions. Many owners wonder about the value of WntResearch’s patent portfolio, but it has not been a contributing factor in this agreement. However, it is worth noting that the patent portfolio is strictly focused on Foxy-5 and thus only play a role in the development of that particular candidate. It has not been a serious option in any of the processes we have gone through during the autumn.
What more can you tell us about OPSY and their business?
– OPSY is a Swedish insuretech company that is developing a platform to streamline and digitize the management of medical assessments in the insurance industry. The claims settlement process, especially in the event of personal injury, accident and illness, is complex and surrounded by strict regulatory and safety requirements. OPSYs’ solution makes it easier for insurance companies to handle these cases quickly, securely, and cost-effectively.
– In a short amount of time, the company has established itself as an important player in the Swedish market and signed contracts with several leading insurance companies. By digitizing and structuring the work with medical opinions, OPSY can improve both the efficiency and quality of assessments, while providing administrators and medical experts with a more user-friendly and powerful tool.
– The underlying business model is based on a combination of transaction-based revenue and SaaS services, providing scalability that enables continued growth. We see a strong potential in the company, both in Sweden and internationally, where the need for efficient and safe solutions in medical claims management is substantial.
What will happen to WntResearch’s assets now?
– Most of it will remain within the company. We are required to save clinical data for a long time and we have also saved a lot of the product substance in case someone wants to evaluate Foxy-5 further. The patent portfolio also remains in the company, but we will no longer invest in defending the patents, which means that the portfolio will decrease in scope over time.
– If the extraordinary general meeting approves the acquisition, an external party could still buy some of these assets at a later stage. If the acquisition is not approved, immediate liquidation is the only remaining option to avoid bankruptcy. And the value after liquidation will be significantly lower than our current share price.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.