Tetra Bio-Pharma Inc (CVE:TBP) has won financing from its partner and fellow Canadian cannabis company Aphria (TSX:APHA) (NYSE:APHA) and closed a private share placement drawing in proceeds of C$7.1 million.
The Aphria investment will allow Tetra to rachet up its drug development activities over the coming months.
Under the private placement, Tetra issued 6.9 million units to Aphria, with each unit being comprised of one Class A common share of Tetra and one common share purchase warrant at a price of $1.03 per unit.
As part of the transaction and for Aphria to attain a 19.9% stake in Tetra, Tetra co-founders Andre Rancourt and Guy Chamberland have agreed to each sell 5 million shares each to Aphria.
“Aphria has been a major strategic partner since the inception of Tetra,” Chamberland, CEO of Tetra Bio-Pharma, said in a statement. “Their decision to substantially increase their holding in our company illustrates their confidence in our business model which is focused on taking a pharmaceutical pathway to the commercialization of cannabis and cannabinoid-derived products.”
Following the sale, Chamberland and Rancourt will continue to hold 5 million shares each as Tetra moves forward.
“As for the sale of my shares to Aphria, this divestiture was done to accommodate Aphria and for personal tax and estate planning purposes following the sale of PhytoPain Pharma Inc., earlier this year,” Chamberland explained. “I continue to be one of the company’s major shareholders, and I am fully committed to executing Tetra’s business plan.”
READ: Aphria reports higher 1Q fiscal first quarter revenue and looks ahead to cannabis legalization in Canada
Aphria, which is headquartered in Leamington, Ontario, is a cannabis company specializing in the low-cost production of pharmaceutical-grade cannabis at scale.
Tetra Bio-Pharma, meanwhile, focuses on cannabinoid-based drug discovery and development and boasts a Health Canada approved and US FDA-reviewed clinical program aimed at introducing novel prescription drugs and treatments.
Tetra Bio-Pharma shares slipped 1% to C$1.03 while Aphria shares dropped 21% to C$8.30 in Monday morning trade in Canada.
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