Skye Bioscience, Inc. Common Stock M&A announcement

Good morning, everyone. Welcome to the Skye and Redx transaction agreement presentation. I'm Punit Dhillon, President and CEO of Skye Bioscience, and I'm delighted to be joined today by Lisa Anson, CEO of Redx, and who will be the CEO of the combined company post-completion of the transaction. Before we turn to the transaction itself, I want to thank our shareholders and our board for their support and the Skye team for the discipline and rigor that brought us to this point. Since Skye's formation, we have set out to determine how best to create value for Skye shareholders, and the agreement we are announcing this morning reflects that objective.

This morning, Redx and Skye issued a joint press release outlining a definitive transaction agreement, which has been unanimously approved by the board of directors of both companies and is accompanied by a financing that will provide the combined company with aggregate proceeds of $125 million and an expected cash runway into 2029 through some significant value inflection points, which Lisa will discuss shortly. Following the closing, pre-transaction Skye equity holders are expected to own approximately 5.38% of the combined company. Pre-transaction Redx equity holders are expected to own approximately 59.75% of the combined company. And the investors participating in the financing are expected to own approximately 34.87% of the combined company.

The percentage of the combined company that the pre-transaction Skye equity holders, pre-transaction Redx equity holders, and investors participating in the financing will own as of the closing of the transaction is subject to adjustment based on Skye's actual net cash immediately prior to the closing date. Over the last several months, Skye has evaluated a wide range of options to maximize shareholder value, including an assessment of our internal pipeline, financing opportunities, and strategic alternatives. Let me turn to nimacimab, our legacy program, because I know it matters to many of you who have supported Skye. In our CBeyond Phase II trial, nimacimab was well-tolerated with a safety profile in line with placebo and no increase in gastrointestinal or neuropsychiatric adverse events. In combination with semaglutide, it produced a clinically meaningful magnitude of additional weight loss compared with semaglutide alone.

Since then, the landscape for anti-obesity medicines has shifted rapidly with new oral GLP-1 options and highly efficacious combination and triple agonists advancing. The target product profile that nimacimab would need to complete has moved with it. In that context, in the second quarter of 2026, we made a capital allocation decision to discontinue the CBeyond trial, pause development, and engage a financial advisor to evaluate strategic options for our shareholders rather than fund the next phase of development ourselves. I want to be clear that this is a decision about how best to deploy Skye's capital and not a conclusion about the underlying biology of nimacimab. To put our decision in context, we considered what nimacimab would need to deliver to succeed in this market as it stands today.

The approved standard of care has advanced to double-digit weight loss and the leading injectable GLP-1 and GIP medicines, oral GLP-1 options such as oral semaglutide and orforglipron have now reached the market or regulatory filing. Triple agonists such as retatrutide have reported greater than 25% weight loss in development. Against that bar, an add-on therapy like nimacimab would need to show a clear increment of additional weight loss on top of an optimized incretin, delivered in a convenient dose and injection volume to earn a durable place in treatment. The profile our data pointed to is a dose of at least 600 milligrams and an injection volume of roughly 6 milliliters weekly. This sits outside the convenience window and would require a substantial multi-year Phase III investment with no assurance of a differentiated label.

To preserve the value of that program for you, pre-transaction Skye shareholders will receive a contingent value right entitling you to 90% of the net cash proceeds, if any from any monetization of nimacimab and its intellectual property during the 12 months following the closing of the transaction. In addition, Skye shareholders will retain a 5.4% stake in the new combined company, and we believe this transaction provides our shareholders a compelling opportunity to realize both short and long-term value creation through Redx's novel anti-fibrotic therapies, led by their first-in-class pan-ROCK inhibitor, RXC008. With that, I'd like to introduce Lisa Anson, who many of you know as she is a well-respected biopharma executive with extensive experience, having spent over 20 years with AstraZeneca, including many years working in the U.S. and as President of AstraZeneca UK.

For the past several years, she has been CEO of Redx, and under her guidance, Redx has progressed six molecules into the clinic and is now poised to commence a phase II clinical trial with its novel GI-restricted pan-ROCK inhibitor, RXC008. I will now turn the call over to Lisa.

Great. Thank you, Punit. As Punit said, the boards of directors of both Skye and Redx have approved the combination of the two businesses to create a combined company that, following the close of the transaction, will be named Fibrx Therapeutics, and which will focus on developing the Redx fibrosis portfolio. Let me start by introducing you to Redx and outlining our programs. Redx is a privately held clinical-stage biotechnology company focused on discovering and developing novel, small molecule targeted therapeutics for the treatment of fibrotic disease. Redx is advancing a pipeline of clinical and pre-clinical assets with multiple value inflection points anticipated in the near and medium term. Redx has progressed multiple first or best-in-class small molecules into clinical development, and in addition, has a successful track record of partnerships for our legacy assets.

The foundation of Redx has historically been our exceptional discovery capabilities, which are best demonstrated by the discovery of pirtobrutinib, which was sold to Loxo Oncology and is now marketed by Lilly as the first and only commercially available reversible BTK inhibitor. As Punit has mentioned, the Redx executive team responsible for many of these successful drug discoveries will transition to lead Fibrx Therapeutics. Fibrx will be launched as a pure-play fibrosis company with the lead assets being RXC008, our GI-restricted pan-ROCK inhibitor, which is now commencing a phase II clinical trial in fibrostenotic Crohn's disease patients, a major area of unmet need in IBD.

Before discussing that in more detail, I would just like to highlight that the Fibrx pipeline will also incorporate our pre-clinical discoidin domain receptor inhibitor program, which is a very exciting novel target where we have a leading patent position for both selective DDR1 inhibitors as well as DDR1-2 inhibitors. Completing our pipeline and demonstrating our expertise and track record in targeting the ROCK pathway, we have zelasudil, also known as RXC007, a selective ROCK2 inhibitor, which has completed a successful signal-seeking phase II study in idiopathic pulmonary fibrosis patients. With this program, we have a broad pre-clinical data set that highlights the utility of a next-generation selective ROCK2 inhibitor across a number of fibrotic indications, including other interstitial lung diseases, MASH, and cancer-associated fibrosis. Based on this package, we are establishing the most appropriate clinical development plan, including the possibility to deliver the full potential of zelasudil through a partnership.

Turning to our lead asset, RXC008. Fibrostenotic Crohn's disease is an area of high unmet need, which affects roughly half of the 1.7 million Crohn's disease patients, and for which there are currently no approved therapeutics. Fibrostenosis is the formation of fibrotic strictures due to chronic inflammation over time in the gut. The current standard of care for Crohn's patients is the use of anti-inflammatory therapies, although these do not prevent progression of the underlying fibrotic aspects of the disease. Therefore, many patients with fibrostenotic Crohn's, the only treatment option is debilitating surgical intervention, which may ultimately include the removal of the affected area of the gut, leading to complications such as short bowel syndrome or the need for a stoma. These complications not only have a significant impact on patient health and standard of living but also place a strain on healthcare providers and are costly interventions.

Given this large unmet need and the limited competitive landscape, there is a significant commercial opportunity and one for which we have specifically designed an asset to target these fibrotic aspects of Crohn's disease. We believe this will be a first-in-class approach and one which can be used in combination with patients' current standard of care anti-inflammatory drugs. As a brief overview, RXC008 is phase II-ready and has an open IND as well as FDA Fast Track designation. We plan to initiate the phase II study in patients in Q4 of this year. We have a robust pre-clinical package where we've demonstrated full reversal of established fibrosis back to the baseline in in vivo models. Our phase I healthy volunteer study was completed last year and presented at both ECCO and DDW.