(Bloomberg) -- A second law firm has launched an investigation into InMed Pharmaceuticals Inc.’s planned merger with Mentari Therapeutics, questioning if shareholders are receiving a fair deal that leaves them with only 1.51 percent of the combined company.
“Is it a fair deal?” Class Action Attorney Juan Monteverde with Monteverde & Associates PC asked in a statement announcing the investigation. The M&A Class Action Firm, which has recovered millions for shareholders, is probing the transaction that was announced on May 19.
The all-stock deal would see privately-held Mentari merge with InMed, creating a publicly-traded company focused on migraine prevention therapies. The combined entity, to be named Mentari Therapeutics, is expected to have a pro forma equity value of about $421 million, supported by a concurrent, oversubscribed $290 million private placement. The financing is expected to fund operations through 2028, past key clinical data readouts for Mentari’s two lead drug candidates.
The investigation adds to pressure on InMed’s board, following a similar probe announced by investor rights law firm Halper Sadeh LLC. Both firms are examining whether InMed’s board breached its fiduciary duties by failing to secure the best possible price and whether the deal terms unfairly limit competing offers.
Under the terms of the agreement, which has been approved by both boards, the new Mentari Therapeutics will trade on the Nasdaq under a new ticker symbol. The deal is expected to close in the second half of 2026, subject to shareholder and regulatory approvals.
InMed shareholders will receive a small stake in a company with a promising pipeline targeting the large migraine market. Mentari’s lead programs, MT-001 and MT-002, aim to prevent migraines by inhibiting PACAP, a nervous system protein. The approach seeks to help patients who don’t respond well to existing CGRP-blocking drugs.
The investigation by Monteverde & Associates highlights concerns that the value offered to InMed shareholders is insufficient. InMed, which has focused on developing cannabinoid-based drugs, has seen its stock price fall significantly over the past few years, trading as a penny stock for most of 2023.
The probe will assess if the 1.51 percent ownership stake adequately compensates shareholders for their share of the public listing and the potential of Mentari's pipeline. The outcome of the investigation could lead to legal action seeking to renegotiate the terms or provide additional disclosures to shareholders.
This article is for informational purposes only and does not constitute investment advice.
