FSD Pharma Enters License Agreement to Develop FDA-Approved Veterinary Drugs 

FSD Pharma recently announced it has entered into a license agreement with Innovet Italia S.R.L., under which Innovet granted the company a license to use ultramicronized-palmitoylethanolamide (or ultramicronized PEA) (ultra-micro PEA) to develop US FDA-approved veterinary drugs for the treatment of gastro-intestinal diseases in Canine and Feline (Dogs and Cats). In addition, the company announced 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.”

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 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.

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 $500,000 is due and payable to Innovet on the effective date of the License Agreement and a second non-refundable sum of $250,000 will be due and payable to Innovet on the first anniversary of the effective date of the License 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, the company is required to pay an additional non-refundable sum of $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.

FSD BioSciences, Inc., a whollyowned subsidiary is a specialty biotech pharmaceutical R&D company focused on developing over time multiple applications of its lead compound, ultra-micro PEA by down-regulating the cytokines to effectuate an anti-inflammatory response. The company filed an IND with the FDA on August 28, 2020, and was approved on September 25, 2020, to initiate a Phase 2 clinical trial for the use of FSD201 to treat COVID-19, the disease caused by the SARS-CoV-2 virus. The trial is currently underway and is expected to randomize 352 patients in a controlled, double-blind multicenter study.

Severe COVID-19 is characterized by an over-exuberant inflammatory response that may lead to a cytokine storm and ultimately death. The company is focused on developing ultra-micro PEA for its anti-inflammatory properties to avoid the cytokine storm associated with acute lung injury in hospitalized COVID-19 patients. The company is not making any express or implied claim that its product has the ability to eliminate, cure or contain the COVID-19 (or SARS-2 Coronavirus) infection at this time. For more information, visit www.fsdpharma.com.

Innovet Italia is an innovative animal health company, founded in Italy in 1996. Its main goal is to bring scientific innovation in niche fields of the veterinary market. The philosophy that drives Innovet’s development is to follow where nature leads, studying and mimicking natural protective body responses rather than “artificially” fighting the mechanisms of diseases. Based on such a strategic idea, Innovet’s research team discovered and patented a family of bioactive lipid amides (ie, aliamides, whose parent compound is palmitoylethanolamide, PEA) able to naturally restore the physiological balance of the hyper-reactive tissues. PEA, its micronized and ultramicronized forms and various other congeners, are the main components of Innovet’s innovative products. Innovet’s commercial effort is mainly focused on the small animal health field, in many market segments (ie, dermatology, orthopedics, oral health, uro-nephrology, behavior, gastroenterology, ophthalmology and algology). For more information, visit http://www.innovet.it.