Policy & Regulation
FSD Pharma Sells Interest in Cannara Biotech
26 February 2020 - - Canada-based specialty biotech pharmaceutical R and D company FSD Pharma Inc. (NASDAQ: HUGE) (CSE: HUGE) (FRA: 0K9A) has sold its 12% equity interest in Cannara Biotech Inc. (CSE: LOVE) to a consortium of buyers for cash proceeds of more than CDN 7.7m, the company said.

The terms of the Share Sale Transaction were negotiated at arm's length with a group of buyers that included entities controlled by members of the Cannara board and senior management.

A substantial portion of FSD Pharma's shareholdings in Cannara were subject to a statutory escrow expiring December 2021.

Under the terms of the Share Sale Transaction, the buyers agreed to acquire FSD Pharma's interest subject to escrow and, as such, assumed all of the associated market risk. The Share Sale Transaction represents a 670% return on the company's stake in Cannara.

FSD Pharma is a specialty biotech pharmaceutical R and D company focused on developing over time a robust pipeline of FDA-approved synthetic compounds targeting the endocannabinoid system of the human body to treat certain diseases of the central nervous system and autoimmune disorders of the skin, GI tract, and the musculoskeletal system.

Through its acquisition of Prismic Pharmaceuticals in Q2 2019, FSD Pharma is also making an effort to help address the opioid crisis by developing opioid-sparing prescription drugs utilizing the micronized formulations of palmitolylethanolamide.

The company intends to initiate Phase 1 first-in-human safety and tolerability trials for its lead candidate, PP 101 micro-PEA during 1Q20.

FSD's wholly-owned subsidiary, FV Pharma, is a licensed producer under Canada's Cannabis Act and Regulations, having received its cultivation license on October 13, 2017, and its full Sale for Medical Purposes license on June 21, 2019.

The company is licensed to cultivate cannabis in approximately 25,000 square feet of its facility in Cobourg, Ontario.
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