Starton Therapeutics, Inc. entered into a definitive business combination agreement to acquire Healthwell Acquisition Corp. I (NasdaqCM:HWEL) from Healthwell Acquisition Corp. I Sponsor LLC and others for approximately $510 million in a reverse merger transaction on April 27, 2023. As per the terms of the transaction, HWEL will acquire Starton for aggregate base consideration of $260 million, including $20 million of incentive shares provided to potential PIPE investors, subject to adjustments for debt (net of cash) and certain other adjustments. In addition to the base consideration, existing Starton shareholders will have the right to receive contingent earnout consideration in the form of up to 25 million shares of HWEL common stock or Exchangeable Shares, as applicable, payable in three tranches of at least 8.3 million shares, with a tranche earned upon the post-closing HWEL stock price reaching at least $12 for 20 trading days, $14 for 20 trading days or upon achievement of a first clinical milestone. Starton is expected to have a pro forma enterprise value of $339 million and equity value of $374 million. Post deal completion, existing Starton shareholders is expected to own 64%, Healthwell public shareholders 9% and Healthwell sponsor 13% stake respectively. HWEL will be renamed Starton Holdings Corp. and the common stock and warrants of HWEL are expected to be listed on the Nasdaq and Starton and Healthwell will each become wholly-owned subsidiaries of HWEL.

The Transaction is subject to shareholder approval of both Starton and HWEL, as well as other customary conditions, including receipt of the approval of the British Columbia Court, certain regulatory approvals, expiration of the applicable waiting period under any antitrust laws, Healthwell having net tangible assets of at least $5,000,001, Healthwell having cash and cash equivalents of at least $15.0 million, the Registration Statement of which the proxy statement/prospectus forms a part having been declared effective by the SEC, the shares of Pubco Common Stock and the Pubco Warrants having been have been approved for listing on Nasdaq, Starton shall have received from Pubco the Company Registration Rights Agreement, duly executed by Pubco, a copy of each Non-Competition Agreement, duly executed by Pubco and a copy of each Lock-Up Agreement, duly executed by Pubco. The Business Combination Agreement was approved by the board of directors of each of Starton and HWEL. The deal is expected to close in the second half of 2023. The transaction is expected to bring gross cash proceeds of $50 million, including $35 million in cash expected to be held in trust (assuming 86% redemptions), and $15 million in an anticipated private investment in public equity (PIPE) capital raise.

SPAC Advisory Partners LLC, a division of Kingswood Capital Partners, is serving as exclusive financial advisor and Stephen M. Cohen and Lauren W. Taylor of Fox Rothschild and Dentons Canada LLP are acting as legal counsel to Starton. Jefferies LLC is serving as capital markets advisor to Healthwell and is being represented by Kirkland & Ellis LLP. Stuart Neuhauser of Ellenoff Grossman & Schole LLP and Peterson McVicar LLP are serving as legal counsel to Healthwell.