Vancouver, British Columbia--(Newsfile Corp. - February 24, 2020) - FSD Pharma Inc. (NASDAQ: HUGE) (CSE: HUGE) (FSE: 0K9A), a specialty, biotech pharmaceutical R&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, has sold its 12% equity interest in Cannara Biotech.
The sale, to a consortium of buyers, for cash proceeds of more than $7.7 million, represented a 670% return on FSD Pharma's holdings in Cannara. The terms 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 an escrow agreement expiring in December 2021.
Under the terms of the transaction, the buyers agreed to acquire FSD Pharma's interest subject to escrow and, as such, assumed all of the associated market risk.
Dr. Raza Bokhari, Executive Co-Chairman and CEO, stated: "This is a very positive milestone for the shareholders and stakeholders of FSD Pharma to recognize a 7x return in less than two years. This transaction represents, which I hope is the first of others that will follow to strengthen our cash position on the balance sheet. Our aim is to scale up to $50 million in disposable cash through monetizing our non-cash assets and raising new capital from institutional and institutional grade investors in the United States and elsewhere."
Through its acquisition of Arizona-based Prismic Pharmaceuticals for $17.5 million in July 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 (PEA). The company intends to initiate Phase 1 first-in-human safety and tolerability trials for its lead candidate, PP 101 micro-PEA during the 1st quarter of 2020.
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.
For more information, please visit the company's website, www.FSDpharma.com, or contact Sandy Huard, Head of Communications, at 647-864-7969 or by email at sandy@FSDpharma.com. For investor relations in Canada email IR@FSDpharma.com. In the United States, contact Sanjay M. Hurry of LHA Investor Relations, who can be reached at 212-838-3777 or by email at SHurry@lhai.com.
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