Biotech Firm Adjusts Placement Terms to Fuel U.S. Expansion

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* Disclosure for the quote from the Clive Maund article published on May 23, 2025

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Canadian healthcare and clinical stage drug development company Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGW0:XFRA) has updated the pricing and warrant terms for its previously announced non-brokered private placement to raise CA$1 million.

The offering will now feature units of common shares or subscription receipts at revised prices. The issue price has been adjusted to CA$0.06 per Common Unit, down from $0.07, and to CA$0.60 per Subscription Receipt, down from CA$0.70 per preferred unit.

The proceeds from the placement are earmarked to advance Algernon’s new Alzheimer’s Disease program, support the upcoming U.S. clinic launch, provide further deposits for medical imaging technology, and cover general and administrative expenses.

The Offering is expected to be comprised of 25% common units and 75% subscription receipts. Each common unit will include one Class A common share of the company and one-half of a common share purchase warrant to purchase one common share at a price of CA$0.15 per common warrant share for one year.

After the first anniversary of the issuance date, the common exercise price will rise to CA$0.25 per common warrant share for the next 12 months, and on the second anniversary of the issuance date, it will increase to CA$0.50 per common warrant share for a subsequent thirty-six (36) months.

NoBrainer Acquisition

Last month, the company announced it had successfully completed its acquisition of NoBrainer Imaging Centers, Inc. (NIC), securing exclusive master franchise and licensing rights to operate Alzheimer’s Disease (AD) diagnostic and treatment centers across Canada and several U.S. markets. Algernon announced the closure of this transaction on May 22, marking a significant expansion into the AD screening and treatment sector.

The terms of the acquisition included issuing 5.5 million common shares and an equivalent number of common share purchase warrants to NIC shareholders, along with 450,000 preferred shares and 450,000 preferred share purchase warrants, pending shareholder approval for the creation of the preferred share class. If approved, these preferred shares will be convertible into ten common shares each and will carry a 10% annual dividend, payable in either share class at the discretion of Algernon’s board.

This strategic acquisition and the subsequent funding initiative reflect Algernon’s commitment to expanding its footprint in the neurodiagnostics and Alzheimer’s treatment landscape, leveraging cutting-edge technology and innovative clinical approaches to address this pressing healthcare challenge.

NIC holds franchise rights from NoBrainer Alzheimer’s Treatment Centers, Inc. for Canada (excluding Oakville and Ottawa) and for U.S. territories including Florida (excluding Miami), Los Angeles, and five additional major cities. According to the company, NIC possesses CA$250,000 in working capital, which includes a deposit on a Positrigo NeuroLF PET brain scanner expected to be delivered to Algernon’s first U.S. clinic in the fourth quarter of 2025.

Analyst Notes Favorable Entry Point

*In a detailed report dated May 23, technical analyst Clive Maund provided a technical endorsement for Algernon Pharmaceuticals Inc. following its successful acquisition of NoBrainer Imaging Centers, Inc. Maund remarked that the company was "remarkably inexpensive here following a severe bear market and long basing process," and observed that technical indicators were signaling that Algernon was "ready to break out into a new bull market." He gave the stock an "Immediate Strong Buy" rating.

Maund pointed out several factors bolstering this positive outlook, notably Algernon's recent foray into the Alzheimer's Disease diagnostic and treatment arena. He emphasized that the acquisition granted Algernon exclusive master franchise rights across several key North American markets, and he praised the company's initiative to establish a network of diagnostic clinics as "a unique and exciting approach to help fight this devastating disease."

Additionally, he highlighted the strategic integration of Positrigo’s NeuroLF PET imaging technology into the company's clinic operations as a significant advancement in diagnostic capabilities.

In his analysis, Maund also mentioned Algernon's divestiture of its chronic cough program, Ifenprodil, to Seyltx Inc. for US$2 million plus a 20% carried interest, describing the deal as providing "much-needed capital" while preserving long-term potential for gains. He drew parallels to the market value of similar late-stage assets, noting that "a comparable Phase 2 study completed by Bellus Health resulted in it being acquired…for US$2 billion," and suggested that Algernon’s retained interest could prove substantial if development progresses as anticipated.

Maund further underscored the importance of Algernon’s primary research initiative focusing on stroke treatment using DMT, a naturally occurring psychedelic compound. He characterized the stroke treatment market as "massive" and cited internal data indicating that 78% of stroke patients currently have no treatment options.

From a technical standpoint, Maund’s examination of Algernon’s chart patterns revealed a base formation starting in late 2023, marked by increasing trading volume and a rising Accumulation line — signs of growing institutional support. He identified a developing bullish pattern that resembled a Double Bottom with a Head-and-Shoulders formation, suggesting "we are at an excellent entry point."

Maund concluded his analysis by affirming, "Algernon Pharma is at a very favorable entry point here… and it is rated an Immediate Strong Buy." He set near-term technical targets at CA$0.12, CA$0.17, and CA$0.25, with potential for further gains.

The Catalyst: Diagnostics, Therapeutics Set to Revolutionize AD Market

Grand View Research reports that the global neurodiagnostic market was valued at US$17.54 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 3.8% through 2030. The firm credits this growth to "technological advancements, increasing prevalence of neurological disorders, and rising demand for early diagnosis."

In 2023, neuroimaging technologies dominated the market, making up 57.9% of the market share, propelled by advancements in MRI, CT, and AI-based imaging tools. Hospitals and clinics constituted the largest end-use segment, while imaging centers were anticipated to be the fastest-growing segment. Grand View Research also pointed out that collaborations, like the February 2024 partnership between Philips and SyntheticMR, are expected to enhance AI-based imaging and improve diagnostic efficiency.

BCC Research, in a report dated April 17, projected that the global market for Alzheimer’s disease (AD) therapeutics and diagnostics is set to grow from US$9.7 billion in 2024 to US$19.6 billion by 2029, marking a CAGR of 15.1%.

The report emphasized, "Emerging blood-based diagnostics and disease-modifying therapeutics [are] set to revolutionize [the] Alzheimer's disease market," underscoring significant clinical and commercial momentum.

BCC Research identified several key growth drivers, including the rising prevalence of AD, the high unmet need for effective treatments, investments in neuroscience, and the increasing significance of biomarker-based diagnostics. By late 2024, more than 20 novel drug compounds for AD were in Phase 3 development, and advancements in diagnostic technologies were facilitating earlier intervention strategies.

Ownership and Share Structure

According to the company, management and insiders own about 11% of the company, and about 21% is owned by institutions. The rest is with retail.
Top shareholders include Alpha North Asset Management with 20.52%, Chief Executive Officer Christopher Moreau with 5.05%, Chairman of the Board Harry Bloomfield with 1.97%, and Chief Financial Officer James Kinley with 1.4%, and Director Rajpaul Attariwala with 1.2%.