• Strategic financing by an affiliate of CK Life Sciences Int’l., (Holdings) Inc., results in working capital of approximately $23 million to fund operations and advance Phase 2b Halneuron® development into 4Q25

• Expanded pipeline includes a potential first-in-class non-opioid, NaV1.7 inhibition pain treatment, Halneuron®, currently in Phase 2b development for chemotherapy-induced neuropathic pain, with an expected interim readout 2H25
• Near-term catalyst with top-line results from the IMC-2 Long-COVID Phase 2a study expected in early 4Q24
• Existing VIRI stockholders to be granted a contingent value right (“CVR”) tied to potential milestone payments associated with any future corporate partnering transactions for IMC-1 and IMC-2
• Company announces 25-for-1 reverse stock split of its common stock to be effective on October 9, 2024 to enable business combination and Nasdaq listing compliance
• Webcast today, October 7, 2024, at 8:30 a.m. Eastern Time
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ATLANTA and VANCOUVER, British Columbia, Oct. 07, 2024 (GLOBE NEWSWIRE) -- Virios Therapeutics, Inc. (NASDAQ: VIRI) (the “Company”), and Wex Pharmaceuticals, Inc. (“WEX”), a wholly owned subsidiary of CK Life Sciences Int’l., (Holdings) Inc. (“CKLS”), today announced that Virios has entered into a definitive share exchange agreement with Sealbond Limited, an indirect parent of Wex, pursuant to which the companies will combine in an all-stock transaction (the “Combination”).

The combined company’s new name will be Dogwood Therapeutics, Inc. (NASDAQ: DWTX) (“Dogwood”) and it will be focused on the clinical development of three assets: Halneuron®, currently in Phase 2b development for chemotherapy-induced neuropathic pain (“CINP”); IMC-1, poised for Phase 3 development as a treatment for fibromyalgia (“FM”); and IMC-2, currently in Phase 2 development to treat Long-COVID (“LC”) sequelae.

In connection with the Combination, the Company announced that it is raising $19.5 million in a committed debt financing by an affiliate of CKLS in two tranches with $16.5 million funding at closing and an additional $3 million funded in 1Q25, subject to certain customary conditions. This financing is expected to fund research and operations through several key milestones, including the release of results from the Halneuron® Phase 2b interim analysis assessment expected in 2H25.

“This transaction represents our deep commitment to delivering value to stockholders by expanding our pipeline with a synergistic, novel program while also providing the upside opportunity for existing Virios stockholders to receive future cash payments through CVRs for potential licensing partnerships relating to IMC-1 and IMC-2,” said Greg Duncan, Chief Executive Officer. “With the anticipated funding and an accomplished management team, we believe Dogwood is well-positioned to advance its programs by leveraging its FDA Fast Track designations for IMC-1 and Halneuron®.”

“Both preclinical and clinical data support sodium channel inhibition as a non-opioid approach to treat CINP, which can be a long-term condition affecting approximately one in three patients following chemotherapy,” said Mike Gendreau, M.D., PhD, Chief Medical Officer. “Halneuron® is a voltage-gated sodium channel inhibitor that modulates transmission of pain signals, a mechanism proven to treat pain, with the potential to serve as a non-opioid treatment for both acute and chronic pain, including CINP, for which there are currently no FDA approved treatments.”

Dogwood will be led by industry veterans, including Chief Executive Officer Greg Duncan; Chief Medical Officer Mike Gendreau, M.D., PhD; Senior Vice President Operations Ralph Grosswald; Chief Financial Officer Angela Walsh and Vice President Manufacturing Meng Zhou. The combined Board of Directors consists of Rick Keefer; John Thomas; Richard Whitely, MD; Abel De La Rosa, PhD; Alan Yu; Melvin Toh, MBBS; and Chairman Greg Duncan.

Effective October 9, 2024, the Company will change its name from “Virios Therapeutics, Inc.” to “Dogwood Therapeutics, Inc.” The Company’s common stock will cease trading under the ticker symbol “VIRI” and will begin trading on the Nasdaq Capital Market under the ticker symbol “DWTX” as of the commencement of trading on October 9, 2024.

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Dogwood Therapeutics Proprietary Pipeline

• Halneuron® is in Phase 2b development as a non-opioid, Nav 1.7 inhibitor to treat the neuropathic pain associated with chemotherapy treatment. Halneuron® has been granted Fast Track Designation from the FDA for the treatment of CINP.

Next milestone: Interim data from the ongoing Phase 2 CINP study are expected in 2H25.

• IMC-2 (valacyclovir + celecoxib) is in Phase 2 development as a combination antiviral treatment for Long-COVID.

Next milestone: Topline data from an investigator led, double blind controlled proof of concept study, assessing two doses of IMC-2 vs placebo, are expected in early 4Q24.  

• IMC-1 (famciclovir + celecoxib) is Phase 3 development ready as a combination antiviral treatment for FM. IMC-1 has been granted fast track designation by the FDA.

Next milestone: Dogwood is exploring partnerships for IMC-1 to execute the Phase 3 FM program as agreed with the FDA.

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Company Announces Reverse Stock Split

‍In connection with the Combination, the Company is announcing a reverse split of 25-for-1. The reverse stock split will be effective on October 9, 2024, resulting in outstanding shares of common stock of 1,110,317 prior to the issuance of shares pursuant to the share exchange agreement. The 25-for-1 reverse stock split will automatically result in the conversion of twenty-five current shares of the Company’s common stock into one new share of common stock. No fractional shares will be issued in connection with the reverse stock split. In lieu thereof, each stockholder who would be entitled to receive a fractional share will be entitled to receive a cash payment equal to the fair market value of such fractional share. The Company expects its common stock to begin trading on a split-adjusted basis on the Nasdaq Capital Market as of the commencement of trading on October 9, 2024 with a new CUSIP number of 92829J203 and under the symbol “DWTX”.

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About the Business Combination and Financing

‍Pursuant to the definitive share exchange agreement, immediately following the reverse stock split, Sealbond, the sole stockholder of Wex and an indirect wholly-0wned subsidiary of CKLS, will receive an aggregate of 211,383 shares of common stock and 2,108.3854 shares of non-voting convertible preferred stock (with a conversion ratio of preferred to common at 1:10,000) (the “Preferred Stock”) which represents, on a fully diluted basis, approximately 94% for Sealbond and approximately 6% for the pre-Combination stockholders of Virios Therapeutics and a combined fully diluted equity value of approximately $105 million (excluding transaction fees). In connection with the Combination, the Company entered into a loan agreement with an affiliate of CKLS for a cash investment of $19.5 million, which will be funded in two tranches with $16.5 million funded at closing and an additional $3 million funded in 1Q25, subject to certain customary conditions.

The issuance of shares of common stock upon conversion of the Preferred Stock issued in the Combination shall be subject to stockholder approval in compliance with the rules of the Nasdaq Stock Market.

A non-transferrable CVR will be distributed to Dogwood stockholders of record as of October 17, 2024 to receive certain proceeds received by Dogwood, if any, related to future upfront, development or regulatory milestone payments resulting from corporate partnering transactions of IMC-1 and IMC-2.

Tungsten Advisors served as the exclusive financial advisor and placement agent to VIRI. Orrick, Herrington & Sutcliffe, LLP is serving as legal counsel to VIRI. Goodwin Procter LLP is serving as legal counsel to CKLS and its affiliates.