MagicMed Industries purchaser Enveric Biosciences (NASDAQ:ENVB, FRA:SLZ) Inc, has released a letter to its shareholders ahead of its annual stockholder meeting and the closing of the MagicMed transaction.
Enveric is a patient-focused biotechnology company developing novel therapeutic drugs to improve the quality of life for cancer patients.
In late May, MagicMed announced it had entered into a definitive agreement for an all-stock transaction that would see it acquired by Enveric.
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As the deal nears completion, Enveric’s chief executive officer, David Johnson, issued an open letter to shareholders; in it the company head outlined 2Q financials and provided an update on the acquisition process.
“We expect the pending transaction to complement our existing product development activities, which are focused on physical symptoms, with a platform of novel psychedelics that addresses the large mental health challenges related to CNS indications such as PTSD, anxiety, depression and pain,” wrote Johnson in the statement.
“We filed our second quarter and first half of 2021 financials last Friday with the SEC, which demonstrates our strong balance sheet of approximately $20 million in cash, no debt and an efficient capital table, affording us the flexibility to be opportunistic about further M&A possibilities and in executing on our current business plan,” he added.
Enveric has also increased its research and development spending over the first half of 2021.
The money was used in part to look beyond the company’s cannabinoid-based therapeutic drugs for patients who suffer from the side effects of cancer therapy, to the adjascent spaces that could benefit from these treatments.
Johnson cited radiation induced dermatitis and chemotherapy induced peripheral neuropathy as large market opportunities where the current standard of care has seen minimal clinical innovation.
“Our development activities, however, revealed an even larger opportunity related to a side effect in cancer therapy known as 'Cancer Related Distress' (CRD) derived from anxiety, depression and PTSD arising from the diagnosis, treatment protocol or a patient's concerns about the future. While working to address the physical issues associated with cancer therapy, as a patient-centric company, it became evident that patients also had significant struggles with the mental aspect of their diagnosis,” explained Johnson.
“Scientific evidence published by leading academic institutions such as John Hopkins and Yale show the promise of psychedelic molecules as an effective and exciting approach in treating mental health. The FDA's approval of Janssen's SPRAVATO (eskatamine) and its designation of "Breakthrough Therapy" for a Psilocybin and MDMA, further bolsters this published research,” he said.
With this space in mind, Enveric began looking for a partner and found MagicMed.
“Their library of Intellectual Property for Generation 3molecules, together with their use of Artificial Intelligence, we believe will allow the combined company to address many of the issues not only within our desired cancer indications, but well beyond in this extensive arena of societal mental health problems,” Johnson said.
Once the deal is finalized Dr Joseph Tucker, the current CEO of MagicMed, will become the CEO of the amalgamated entity which will operate under the Enveric name. Johnson will then move to the role of executive chairman.
“With a market estimated at more than $250 billion in North America alone, the combined company will be uniquely positioned to bring significant value in the form of efficacious, reliable, life-changing therapies for the patients we seek to serve,” Johnson added.
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