Neurotrope and Metuchen Pharmaceuticals Announce Merger Agreement to Form Petros Pharmaceuticals, a Men's Health Company

Publisher: The Insight Partners

Neurotrope, Inc. and Metuchen Pharmaceuticals, L.L.C., a privately held biopharmaceutical company ("Metuchen"), focused on identifying,  developing, acquiring, and commercializing innovative therapeutics for men's health conditions, today announced that the two companies have entered into a definitive merger agreement under which Metuchen and Neurotrope, Inc. ("Neurotrope") will merge in an all-stock transaction resulting in a newly formed holding company to be renamed Petros Pharmaceuticals, Inc. ("Petros"). Petros is expected to become a Nasdaq traded company focused solely on men's health conditions.  Petros' cornerstone product would be Metuchen's Stendra® (avanafil) for erectile dysfunction ("ED").  Petros' pipeline would include Metuchen's recently in-licensed product H-100 for Peyronie's disease, and it would include a business development program exploring various men's health products, including endothelial dysfunction, prostate cancer, psychosexual and psychosocial ailments, hormone health and substance use disorders.

Upon completion of the proposed merger, based on certain assumptions, it is anticipated that existing Neurotrope shareholders will own approximately 20% and Metuchen shareholders will own approximately 80% of the combined company, in each case on a pro forma basis and based upon the final Neurotrope common stock share count at close. The transaction has been approved by the boards of directors of both companies.  Metuchen's principal investor is Juggernaut Capital Partners, a leading private equity firm with over $1 billion in capital commitments. Funding for Petros is expected to include approximately $20 million of Neurotrope's available cash and cash equivalents (subject to adjustment) as well as revenue from sales of Metuchen's U.S. Food and Drug Administration ("FDA")-approved erectile dysfunction treatment, Stendra® (avanafil). The merger is expected to close during the third quarter of 2020, subject to customary closing conditions, including approval of the merger agreement by the shareholders of Neurotrope.

Upon closing of the transaction, Neurotrope Bioscience Inc.'s ("NBI") current lead asset, Bryostatin-1 to treat neurodegeneration, and substantially all of its existing assets, operations and liabilities, except for cash retained by Petros in accordance with the terms of the merger agreement, will be spun-out into a new, separately traded company. NBI is expected to retain approximately $14 million which includes cash plus the recently awarded National Institutes of Health ("NIH") clinical trial grant. Stakeholders of Neurotrope prior to the merger will own all of the shares of NBI. As previously announced, NBI will conduct a Phase 2 clinical study focused on patients with moderate-severity Alzheimer's disease ("AD"), which it expects the spun-off entity to initiate shortly.  In addition to continuing work on AD, Neurotrope plans to continue pursuing other indications using bryostatin such as Multiple Sclerosis and Fragile X syndrome. Daniel Alkon, M.D., who will remain NBI's President and Chief Scientific Officer and become a Director, stated, "I am encouraged that Neurotrope Bioscience will continue its original focus, and potentially expand its plans to treat neurodegeneration."

Charles S. Ryan, J.D., Ph.D., Chief Executive Officer of Neurotrope, will be President, Chief Executive Officer and a Director of Petros.  Four members of the Board of Directors of Neurotrope will be directors of Petros, including Ivan Gergel, M.D., who served, among other prior roles, as Chief Scientific Officer and Executive Vice President, Research & Development of Endo Health Solutions, Inc, a company focused on urology and men's health as well as other therapeutic areas.  Neurotrope Director Bruce Bernstein and Chairman Josh Silverman will also be on the Board of Petros. John Shulman, Founder and Managing Partner of Juggernaut Capital and Executive Chairman of Metuchen will also join the Board of Petros along with four additional directors to be identified by Metuchen prior to the merger.

"Following an extensive review of strategic alternatives, Neurotrope's Board of Directors believes that a merger with Metuchen and the formation of Petros offers shareholders the most compelling opportunity for a new direction to further enhance long-term value," said Dr. Ryan. "Petros provides a platform to create the first publicly traded biopharmaceutical company focused exclusively on FDA-approved treatments for men's health conditions, an underserved area of healthcare with significant growth potential. We believe Petros will be well positioned financially and strategically to potentially accelerate the commercial growth of Stendra®, as well as advance its pipeline programs and opportunities."

"Stendra® is a unique asset in the ED space, and its distinct features enable it to compete in an area dominated by generic drugs," said Mr. Shulman. "This merger will enable Petros to dramatically accelerate the commercial relaunch of Stendra® and build a pipeline of other therapeutic products to improve men's health including a topical treatment H100 for Peyronie's disease.   At Juggernaut, we look forward to supporting Petros to deliver on its mission of bringing value to patients within the men's health space by investing in Stendra® and the many opportunities that lie ahead."

"We are delighted to offer our investors an investment in two companies, Petros Pharmaceuticals, Inc. and the spin-out company Neurotrope Bioscience, Inc.," said Mr. Silverman. "With financial support from the NIH and certain existing NBI assets, we look forward to beginning a new Phase 2 trial of Bryostatin-1 and working towards treating neurodegeneration. Separately, Petros will be positioned to grow its cornerstone product, Stendra®, within a market of approximately 500,000 new class prescriptions per month, or approximately 25% of the total ED market of up to 30 million men, while simultaneously developing a disruptive pipeline addressing a number of underserved and unmet conditions in men's health."

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC served as legal counsel to Neurotrope and NBI and Morgan, Lewis & Bockius served as legal counsel to Metuchen with respect to the transaction.