Therapix Biosciences Ltd. [NASDAQ: TRPX] was one of the big gainers in Tuesday’s trading session. The stock shot up by 47% to close the day at $3.40. This parabolic move followed news that the company had signed a letter of intent to merge with Destiny Biosciences, a Canadian cannabis company.
In the deal that is expected to be actualized in Q3, the two companies will merge in a stock-for-stock transaction that gives TRPX a valuation of roughly $48 million, and a combined value of about $151 million. Under the deal, TRPX shareholders will own about a 32% stake in the new entity.
The deal will give the two companies a huge competitive advantage in the market. For instance, through this merger, the new entity will look to hold valuable patents for cannabis medical formulations that will help give it control from seed to the final product. Even before the merger, the two companies have identified key areas of common interest that will give them an edge in the market. In essence, by coming together, the company’s will have an edge in the market, which means a higher potential for revenue growth going into the future.
Looking at the pre-market price action, TRPX has eased up by a small margin this morning, so it might make a pullback on the opening bell. In today’s session, the key level to watch will be Tuesday’s closing price of $3.40 as well as Tuesday’s high of $4.69, which could be a significant resistance level in the day.