PreveCeutical Medical Inc (CSE:PREV) (OTCMKTS:PRVCF) and Asterion Cannabis Inc announced Tuesday they have inked an option agreement, which sees PreveCeutical granting Asterion the option to purchase up to a 51% stake in the intellectual property for its soluble gel (Sol-Gel) system.
The sustained-release Sol-Gel program allows for the delivery of medical compounds, including cannabinoids like CBD, to provide relief from pain, inflammation, seizures and neurological disorders.
"This option agreement presents a unique and timely opportunity for PreveCeutical. We are excited to further our existing strategic partnership with Asterion and are confident that Asterion will assist PreveCeutical in the rapid commercialization of the Sol-Gel IP," said PreveCeutical's president and chief science officer, Dr. Mak Jawadekar in a statement.
To exercise the option, Asterion will be required to make a series of cash payments to PreveCeutical totalling C$2.65 million, by December 22, 2019.
After this time, PreveCeutical and Asterion will be deemed to have entered into a joint venture for the continued development and commercialization of the Sol-Gel intellectual property, with Asterion holding 51% and PreveCeutical holding 49%.
Until that point, PreveCeutical is responsible for funding development and commercialization of the Sol-Gel IP.
The firm noted that the option is subject to a right by PreveCeutical to buy back all - but not less than all - of the earned interest by paying Asterion an amount equal to 150% of the aggregate amount of all cash payments to the date of exercise.
PreveCeutical is also engaged in the development of a dual gene therapy for curative and prevention therapies for diabetes and obesity and is also advancing non-addictive analgesic peptides as a replacement to highly addictive drugs such as morphine, fentanyl and oxycodone, and a therapeutic product for treating athletes who suffer from concussions.
PreveCeutical shares in Toronto were halted at C$0.04 earlier on Tuesday pending the announcement.
Contact Katie Lewis at [email protected]