FSD Pharma to Acquire
Prismic Pharmaceuticals
This transaction positions FSD to help
contribute to addressing the opioid crisis through use of synthetic
cannabinoids
Toronto, Ontario, Canada -- April 23, 2019
-- InvestorsHub NewsWire -- FSD
Pharma Inc. (CSE: HUGE) (OTCQB: FSDDF) (FRA: 0K9) (“FSD
Pharma” or the “Company”) and Prismic Pharmaceuticals Inc.
(“Prismic”), a US-based specialty R&D pharmaceutical company,
announced today that they have entered into a securities exchange
agreement dated April 22, 2019 (the “Agreement”) pursuant to which
FSD Pharma has agreed to acquire all of the outstanding securities
of Prismic (the “Transaction”). Prismic is developing novel
non-addictive prescription drugs with unique safety profiles with
the goal of addressing the opioid crisis based on formulations
utilizing micro-palmitoylethanolamide’s (“PEA”) “entourage” effect
on certain drugs impacting the endocannabinoid
system.
Pursuant to
the terms of the Agreement, FSD Pharma will acquire all outstanding
common and preferred shares of Prismic for an aggregate purchase
price of US$17.5 million (CAD$23.4 million based on an exchange
rate of US$1 to CAD$1.3349), to be satisfied by the issuance of an
aggregate of 102.7 million Class B subordinate voting shares in the
capital of FSD Pharma (each, an “FSD Share”) at a deemed price of
CAD$0.2275 (US$0.1704) per FSD Share representing the volume
weighted average price of the FSD Shares on the Canadian Securities
Exchange (the “CSE”) for the ten trading days prior to the
execution of the Agreement. In addition, FSD Pharma has agreed to
assume up to US$4.0 million of outstanding Prismic liabilities on
terms to be mutually agreed by the two companies, some of which
may, potentially, be settled by the issuance of additional FSD
Shares. Additionally, all of the outstanding Prismic stock options
and warrants will become exercisable into FSD Shares, with the
number and exercise price of such securities to be adjusted in
accordance with the Transaction’s exchange
ratio.
The FSD
Shares to be issued to the Prismic shareholders will be deposited
into escrow at the closing of the Transaction, and be subject to an
18-month staggered time escrow release.
“This
transaction symbolizes FSD Pharma’s vision of acquiring a platform
company to advance research and development of FDA-approved
applications of synthetic cannabinoids and other synergistic
molecules,” said FSD Pharma Executive Co-Chairman & CEO, Dr.
Raza Bokhari. “Led by Peter Moriarty, one of the founders of Shire
Pharmaceuticals, Prismic’s management team has built a solid
foundation for a specialty pharmaceutical company, and we look
forward to providing them with milestone-based support in order to
advance proprietary drug candidates through the various development
stages. This is a very exciting day for FSD Pharma that we believe
represents a paradigm shift in the development and outlook of
our company.”
Peter
Moriarty, Co-Founder and Chairman of the Board of Directors of
Prismic, commented, “We are excited to be entering into a new phase
of growth with FSD Pharma. We believe our combined resources and
highly competent leadership teams will position us to execute on
our clinical development programs and on delivering highly
effective products that safely address pain, inflammation and
neurological disorders with high unmet clinical
needs.”
Prismic has exclusive
worldwide licensing rights (except for Italy and Spain) to a
patent-protected form of palmitoylethanolamide (micro-PEA with
particle sizes of 0.6 – 10 microns), on which Prismic’s development
platform is based and from which Prismic’s lead prescription drug
candidate, PP-101, has been formulated. Such formulations take
advantage of micro-PEA “synergistic” or “entourage” effect on
certain drugs impacting the endocannabinoid system. This means that
lower doses of those drugs may be administered together with
micro-PEA to achieve the desired therapeutic effect. This includes
the potential combination or concomitant use of micro-PEA
formulations with drugs such as THC, CBD, certain anticonvulsants,
and opioids where studies have indicated opioid-sparing and
tolerance delaying properties of micro-PEA may impact the
development of dependence in patients. Prismic’s first prescription
drug candidate, PP-101, a 600 mg tablet of micro-PEA, is
anticipated to commence a Phase 2/3 accelerated clinical
development program in early 2020 as a
concomitant medication to be administered with pregabalin (Pfizer’s
Lyrica®) for the treatment of
fibromyalgia.
Completion of the
Transaction is subject to various closing conditions, including:
the approval of the CSE, the approval of the boards of directors of
FSD Pharma and Prismic, the approval of the security holders of
Prismic, and completion of due diligence by the
parties.
About FSD
Pharma
FSD Pharma is
focused on the development of the highest quality indoor grown,
pharmaceutical grade cannabis and on the research and development
of novel cannabinoid-based treatments for several central nervous
system disorders, including chronic pain, fibromyalgia and
irritable bowel syndrome. The Company has 25,000 square feet
available for production at its Ontario
facility.
FSD Pharma’s
facilities sit on 70 acres of land with 40 acres primed for
development and an expansion capability of up to 3,896,000 square
feet.
FSD Pharma’s
wholly-owned subsidiary, FV Pharma, is a licensed producer under
the Cannabis Act and Regulations, having received its cultivation
license on October 13, 2017. FV Pharma’s vision is to transform its
current headquarters in a Kraft plant in Cobourg, Ontario into the
largest hydroponic indoor grow facility in the world. FV Pharma
intends to cover all aspects of this exciting new industry,
including cultivation, legal, processing, manufacturing, extracts
and research and development.
About
Prismic Pharmaceuticals
Prismic is a US-based
specialty pharmaceutical company dedicated to addressing the opioid
crisis by developing novel non-addictive prescription drugs for the
treatment of pain, inflammation, and neurological disorders, based
on formulations utilizing the company’s micro-PEA development
platform (palmitoylethanolamide with particle sizes of 0.6 – 10
microns). Such formulations take advantage of micro-PEA’s
“synergistic” or “entourage” effect on certain drugs impacting the
endocannabinoid system. This means that lower doses of those drugs
may be administered together with micro-PEA to achieve the desired
therapeutic effect. This includes the potential combination or
concomitant use of micro-PEA formulations with drugs such as THC,
CBD, certain anticonvulsants, and opioids where studies have
indicated opioid-sparing and tolerance delaying properties of
micro-PEA may impact the development of dependence in patients.
Prismic’s first prescription drug candidate, PP-101, a 600 mg
tablet of micro-PEA, is anticipated to commence a Phase 2/3
accelerated clinical development program in early 2020 as a
concomitant medication to be administered with pregabalin (Pfizer’s
Lyrica®) for the treatment of
fibromyalgia.
Prismic was founded
by three healthcare industry veterans, Zachary Dutton, Danilo
Casadei Massari, and Peter Moriarty who was also one of the
founders of Shire Pharmaceuticals.
For further
information:
Zeeshan Saeed,
President, Founder and Director, FSD Pharma Inc.
Email: zeeshan@fsdpharma.com, Telephone: (416)
854-8884
Investor Relations:
Email: ir@fsdpharma.com, Website: www.fsdpharma.com
Media Relations: Nic
Johnson, Email: nic.johnson@russopartnersllc.com,
Tel: (212) 845-4242
Forward-Looking
Information
This news release contains certain “forward-looking
statements” or “forward-looking information” (collectively “forward
looking statements”) within the meaning of applicable Canadian
securities laws. All
statements, other than statements of historical fact, are
forward-looking statements and are based on expectations, estimates
and projections as at the date of this news
release. Forward-looking
statements can frequently be identified by words such as “plans”,
“continues”, “expects”, “projects”, “intends”, “believes”,
“anticipates”, “estimates”, “may”, “will”, “potential”, “proposed”
and other similar words, or information that certain events or
conditions “may” or “will” occur. Forward-looking statements in
this news release include, but are not limited to, statements: that
the Transaction will represent a paradigm shift for the Company;
that Prismic’s drugs under development will have the capability of
addressing the opioid crisis; that the combined resources and
leadership teams of FSD Pharma and Prismic will be positioned to
execute on clinical development programs and on delivering highly
effective products that safely address pain, inflammation and
neurological disorders with high unmet clinical needs; that lower
doses of certain drugs may be administered together with micro-PEAs
to achieve a desired therapeutic effect; regarding the expected
timing of Prismic’s Phase 2/3 accelerated clinical development
program for Prismic’s PP-101 drug candidate; and regarding the
Transaction terms and the expected benefits to the Company and its
shareholders as a result of the proposed acquisition of Prismic.
Such statements are only projections, are based on assumptions
known to management at this time, and are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
forward-looking statements, including: that Prismic’s proposed drug
formulations may not achieve FDA or other necessary regulatory
approvals; that Prismic's micro-PEA formulations may not work as
expected or at all; that the Transaction may not be approved by the
CSE or the shareholders of Prismic; that the Transaction may not be
completed on the terms expected or at all; that legislative changes
may have an adverse effect on the business and product development
of products of the Company and Prismic; that the Company may not be
able to obtain adequate financing to pursue its business plan;
general business, economic, competitive, political and social
uncertainties; and other factors beyond the Company’s control. No
assurance can be given that any of the events anticipated by the
forward-looking statements will occur or, if they do occur, what
benefits the Company will obtain from them. Readers are cautioned
not to place undue reliance on the forward-looking statements in
this release, which are qualified in their entirety by these
cautionary statements. The Company is under no obligation, and
expressly disclaims any intention or obligation, to update or
revise any forward-looking statements in this release, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable securities
laws. Statements in this release with respect to
Prismic and its products have been provided by Prismic and, as at
the date hereof, have not been independently verified by the
Company.