FSD Pharma Inc (NASDAQ:HUGE) (CSE:HUGE) (FRA:0K9A) has entered into a license agreement with Innovet Italia SRL to develop US Food and Drug Administration-approved veterinary drugs for the treatment of gastrointestinal diseases in dogs and cats.
Under the agreement, Innovet granted the company a license to use ultramicronized-palmitoylethanolamide (ultramicronized PEA or ultra-micro PEA) to develop the drugs.
“The licensing agreement with Innovet Italia S.R.I, to evaluate the use of ultra-micro PEA as a veterinary anti-inflammatory prescription drug, is an exciting opportunity for the company to enter into a new and untapped market,” said FSD Pharma CEO Dr Raza Bokhari in a statement Wednesday.
“With a balance sheet that is stronger today than it was when we began our journey nearly three years ago, we are actively exploring other M&A and licensing opportunities to expand our drug development pipeline,” Dr Bokhari added.
FSD Pharma said the license agreement grants it an exclusive, worldwide license (excluding Italy, and subject to a first refusal right maintained by Innovet, any other country in Europe) to research, manufacture, and commercialize products using certain proprietary formulations of ultra-micro PEA to treat gastrointestinal diseases in canines and felines.
The agreement also provides that the company shall develop the licensed products with a view to submitting an Investigational Animal Drug Application with the FDA within 36 months of the date of the agreement and shall submit a New Animal Drug Application within 60 months of the effective date of the agreement.
In addition, FSD Pharma said it is required to make payments to Innovet upon the achievement of specified milestones. An initial non-refundable sum of US$500,000 is due and payable to Innovet on the effective date of the license agreement and a second non-refundable sum of US$250,000 will be due and payable to Innovet on the first anniversary of the effective date of the agreement.
Within 30 business days of the first notification of approval of a New Animal Drug Application by the FDA of the first licensed product to receive such approval in the US, FSD Pharma said it will be required to pay an additional non-refundable sum of US$750,000 to Innovet.
The agreement also specifies certain royalty payments. FSD Pharma said it is required to pay Innovet 14% of any one-off lump sum payments it receives as consideration for granting a sub-license to a third-party with respect to a licensed product. In addition, the company is required to pay 5% of net sales of the licensed products.
Annual and special meetings
In other company news, FSD Pharma’s annual and special meeting of shareholders for 2021 has been scheduled for May 14, while April 15 has been fixed as the record date for voting at the 2021 AGM.
The company's management information circular and related proxy materials will be delivered to shareholders and made available under the company's SEDAR profile on or before April 23. The 2021 AGM is being held in lieu of an annual meeting of shareholders announced earlier for June 29, 2021.
The company also has recently retained Randell Mack, a veteran pharmaceutical executive, as president of FSD BioSciences Inc. Also, Dr Edward Brennan has been named the chief medical officer.
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