Cognos Therapeutics, a medical technology company, has signed a definitive business combination agreement with Nocturne Acquisition, a special purpose acquisition company (SPAC), in a move to become publicly traded on the Nasdaq stock exchange.

According to the all-stock agreement, Cognos Therapeutics’ shareholders will be issued $120m worth of shares of Nocturne Acquisition. The deal values each of the shares at $10.3.

Based in California, Cognos Therapeutics is engaged in developing advanced devices for delivering drugs for the treatment of neurological diseases like brain and spinal cancers, neurodegenerative disorders, stroke, and epilepsy.

The medical technology company has developed the SINNAIS Implantable Smart Pump to deliver drugs to the targeted tissue or other tissues with negligible off-target side effects. The drug delivery system is said to bypass the blood-brain barrier.

The SPAC deal is expected to help it expedite the research and development of its proprietary drug delivery pump to enhance outcomes for brain cancer treatment and other neurological diseases.

Cognos Therapeutics CEO Frank Addell said: “With this agreement, Cognos will be able to have broad access to the capital markets. This will enable us to raise the capital to complete the next phases of our product development for the SINNAIS Implantable Pump.

“This includes further product R&D and clinical testing as well as both our FDA and CMS regulatory review as we work to gain 510k and PMA approval for our technology.

“Not only is this great news for our shareholders, but hopefully for the medical community and the patients it serves who will have a new and potentially much more effective treatment option for a devastating disease.”

Additionally, Cognos Therapeutics is working on the preliminary development of a skull-mounted optical sensor. It is an implantable shunt that allows for collecting clinically important parameters from the disease target site and transmits such data to a cloud base infrastructure for the purpose of analysis.

Nocturne Acquisition chairman and CEO Henry Monzon said: “With over 15 years of research and development, Cognos has laid out a roadmap to deliver a novel targeted solution in the important field of brain cancer.

“Cognos’ SINNAIS has the potential to become the world’s first implantable device for local and metronomic delivery of therapeutics for the treatment of neurological diseases. SINNAIS will enable unprecedented, targeted delivery of chemotherapeutics for persistent glioma and other solid tumours.”

The transaction has received unanimous approval from the boards of the two parties. It is subject to standard closing requirements, including the approvals of both companies’ stockholders.

It is anticipated that the proposed merger will close in the second or third quarter of this year.