Benzinga | Mar 17, 2021 05:33AM EDT

FSD Pharma Announced License Agreement to Develop FDA approved Veterinary Drugs for the Treatment of Gastro-Intestinal Diseases in Dogs and Cats

FSD Pharma Inc. (NASDAQ:HUGE) today announces that it has entered into a license agreement (the "License Agreement") with Innovet Italia S.R.L. ("Innovet"), under which Innovet granted the Company a license to use ultramicronized-palmitoylethanolamide (or ultramicronized PEA) ("ultra-micro PEA") to develop U.S. Food and Drug Administration ("FDA") approved veterinary drugs for the treatment of gastro-intestinal diseases in Canine and Feline (Dogs and Cats). In addition, the Company today announces the filing of its year-end results and provides corporate updates.

"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 Dr. Raza Bokhari, Executive Chairman & CEO. "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."

License Agreement

The License Agreement grants the Company 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 (the "Licensed Products") to treat gastro-intestinal diseases in canines and felines. The License Agreement provides that the Company shall develop the Licensed Products with a view to submitting an Investigational Animal Drug Application with the FDA within thirty-six (36) months of the date of the agreement and shall submit a New Animal Drug Application within sixty (60) months of the effective date of the agreement.

Under the terms of the License Agreement, the Company 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 License Agreement. Within thirty 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 United States, the Company is required to pay an additional non-refundable sum of US$750,000 to Innovet.

The License Agreement also specifies certain royalty payments. Pursuant to the License Agreement, the Company 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.

The above description of the License Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which will be available under the Company's SEDAR and EDGAR profiles.

Corporate Update

The Company's annual and special meeting of shareholders for 2021 ("2021 AGM") has been scheduled for May 14, 2021. April 15, 2021 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, 2021. This 2021 AGM is being held in lieu of Annual meeting of the Shareholders meeting announced earlier for June 29th 2021.

The Company also has recently retained Randell J Mack, a veteran pharmaceutical executive as President of FSD BioSciences, Inc. Dr. Edward Brennan, has been named the Chief Medical Officer.

Filing of Year-End Results

The Company also reported its audited financial results for the fourth quarter and full year ended December 31, 2020. These filings are available for review under the Company's SEDAR profile at www.sedar.com.