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Deadline extension sought for Genting-backed biotech firm-Nasdaq co combination

Deadline extension sought for Genting-backed biotech firm-Nasdaq co combination
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KUALA LUMPUR (April 18): Genting Bhd’s biotechnology arm Celularity Inc, which has entered into a definitive merger agreement with Nasdaq-listed GX Acquisition Corp, said GX is seeking its shareholders’s approval to extend the deadline by which GX has to complete the Celularity-GX business combination from May 23, 2021 to July 31, 2021.

Celularity said in a statement on Friday (April 16) that the US Securities and Exchange Commission had in recent days made a public statement regarding accounting and reporting considerations for warrants issued by special purpose acquisition companies. 

According to Celularity, blank-cheque co GX "has begun a complete review of its accounting treatment of its public and private warrants, and GX’s board of directors currently believes there may not be sufficient time before May 23, 2021 to complete the review and hold a special meeting to conduct a vote for the stockholder approvals required in connection with the Celularity Business Combination and consummate the closing of the Celularity Business Combination within the legally-prescribed time constraints applicable to such actions.”

"The GX board is seeking the extension to complete the accounting review, to allow our stockholders to be able to evaluate the Celularity Business Combination and to allow additional time to consummate the Celularity Business Combination. 

"The GX board continues to unanimously recommend that its stockholders vote “FOR” the proposal to approve and adopt the merger agreement providing for the Celularity Business Combination and each of the other proposals, at the special meeting to be held in connection with the Celularity Business Combination,” Celularity said.

GX is a blank cheque co incorporated in Delaware, US for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganisation, or similar business combination with one or more businesses or entities, according to Celularity.

Celularity said in order to obtain the deadline extension, GX must amend certain provisions of its charter (extension amendment). 

"The special meeting of GX stockholders to consider the extension amendment (the extension amendment special meeting) is scheduled for May 14, 2021. Stockholder approval of the extension amendment is required by Delaware law and the charter.

"Whether or not a GX stockholder plans to attend the extension amendment special meeting virtually, GX urges its stockholders to vote and submit their proxy with respect to the extension amendment in advance of the extension amendment special meeting by one of the methods described in the extension amendment special meeting proxy statement filed by GX on April 14, 2021,” Celularity said.

Celularity said that in January 2021, GX entered into the definitive merger agreement with Celularity, a move that would result in Celularity combining with GX and becoming a publicly listed company.

Since that time, GX and Celularity have been working together to address comments from the staff of the Securities and Exchange Commission on the proxy statement and prospectus filed in connection with the transaction and to satisfy the various closing conditions contained in the merger agreement.

"The Celularity Business Combination is expected to be completed in the second quarter of 2021, subject to, among other things, GX’s completion of its review of its accounting treatment of its warrants, the approval by GX’s stockholders, satisfaction of the conditions stated in the definitive merger agreement and other customary closing conditions,” Celularity said.

Genting Bhd chairman and chief executive Tan Sri Lim Kok Thay confirmed in the casino and hotel operator’s latest annual report that the Celularity-GX business combination is expected to be completed in the second quarter of 2021, whereupon GX will be renamed Celularity Inc and the shares of the combined company will be listed on Nasdaq.

"For the past decade, we have invested in life science and biotechnology companies that are in various stages of research and development (R&D) for new treatments and new ways to improve our health and lifestyle.

"Although the investments in R&D within the medical space pose higher risks than other investments, as the results and success rates are uncertain and the gestation period for any breakthrough discovery can be potentially long, we are committed to find new solutions to improve the health of mankind and the community, said Lim, who is also a director in Celularity.

Celularity was formed in February 2018 with a US$250 million (about RM1.03 billion) funding from several investors comprising Genting Group, Celgene, United Therapeutics, Sorrento Therapeutics, Human Longevity Inc, the Dreyfus Family Office, Section 32 and Heritage Group, according to Celularity’s statement on Feb 15, 2018.

Celularity’s statement, however, did not specify as to how much money Genting Group had invested in the biotechnology company.

At Bursa Malaysia on Friday (April 16, 2021), Genting Bhd’s share price closed down two sen or 0.41% at RM4.88 for a market value of about RM18.79 billion.

Genting Bhd has 3.85 billion issued shares, according to its annual report.