FSD Pharma Inc. (Nasdaq: HUGE) (CSE: HUGE) (“FSD Pharma” or the
“Company”) today announced its financial results for the third
quarter ending September 30, 2020 and provided a corporate update.
The filing is available on SEDAR.
Financial and corporate highlights include:
- Completion of financings for gross proceeds of $19.5 million
USD through two registered direct offerings. As of September 30,
2020, cash & non-cash assets are $56.2 million CAD and short
& long term liabilities are $13.6 million CAD.
- Filing an Investigational New Drug Application (“IND”)
application with the U.S. Food and Drug Administration (“FDA”) and
receiving approval to initiate a Phase 2 clinical trial for the use
of our lead compound, ultramicronized-palmitoylethanolamide (or
ultramicronized PEA) (“FSD201”), to treat 352 hospitalized COVID-19
patients in a double-blind study. We believe FSD201 to be a safe
drug with anti-inflammatory properties which may have the potential
to address the over-exuberant inflammatory response characterized
by COVID-19 infection that may lead to a cytokine storm and
ultimately death. The Company believes it has sufficient cash on
hand to complete the study. More information on the clinical trial
is available on the U.S. National Library of Medicine Website at:
https://clinicaltrials.gov/ct2/show/NCT04619706?term=palmitoylethanolamide&cond=Covid19&draw=2&rank=2.
The contents of such website are not incorporated by reference
herein.
- Entry into a definitive settlement agreement with respect to
the class action litigation commenced by a plaintiff shareholder in
the Ontario Superior Court of Justice in February 2019 relating to
the build out of the Company’s facility in Cobourg, Ontario. The
Company is obligated to pay $5.5 million CAD in settlement; of
which, approximately $4.6 million CAD will be funded from insurance
proceeds and $0.9 million CAD will be paid from cash on hand by the
Company. The settlement agreement is subject to customary
conditions.
- Entry into a conditional contract to sell non-core real estate
asset in Cobourg, Ontario which is expected to close before year
end 2020 and is subject to customary conditions.
Three and Nine Months’ Financial Results (All Figures in
C$)
For the three and nine months ended September 30, 2020, total
operating expenses were $17,486,928 and $32,791,748, respectively,
compared to $11,119,296 and $21,474,025 for the comparative periods
in the prior year. This represents an increase of $6,367,632 or 57%
for the three months ended September 30, 2020 and an increase of
$11,317,723 or 53% for the nine months ended September 30, 2020,
compared to the equivalent periods in the prior year. The increase
for the three and nine months ended September 30, 2020 compared to
the three and nine months ended September 30, 2019 is primarily
related to pharmaceutical R&D expense of the Phase 1 safety
& tolerability study of FSD201, ongoing Phase 2 clinical study
of FSD201 to evaluate treatment of hospitalized COVID-19 patients,
higher stock based compensation, higher professional fees, and
insurance expense as a result of the Nasdaq listing in January
2020.
For the three and nine months ended September 30, 2020, net loss
was $18,034,382 and $36,450,247, respectively, compared to
$16,962,007 and $34,949,559 for the three and nine months ended
September 30, 2019. This represents an increase of $1,072,375 or 6%
for the three months ended September 30, 2020 and an increase of
$1,500,688 or 4% for the nine months ended September 30, 2020,
compared to the equivalent periods in the prior year. The net loss
in the three, and, nine month period ending September 30 2020
includes share based compensation of $6,870,177 and one time charge
of $928,541 for the class action settlement.
The Company is not making any express or implied claims that its
product has the ability to eliminate, cure or contain the COVID-19
(or SARS-2-Coronavirus) at this time.
About FSD Pharma
FSD Pharma Inc. is a publicly-traded holding company.
FSD Pharma BioSciences, Inc., a wholly-owned subsidiary, is a
specialty biotech pharmaceutical R&D company focused on
developing over time multiple applications of its lead compound,
FSD201, 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.
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 FSD201 for
its anti-inflammatory properties to avoid the cytokine storm
associated with acute lung injury in hospitalized COVID-19
patients.
Forward-Looking Statements
Neither the Canadian Securities Exchange nor its regulation
services provider accept responsibility for the adequacy or
accuracy of this press release.
Certain statements contained in this press release constitute
“forward-looking information” and “forward-looking statements”
within the meaning of applicable Canadian and U.S. securities laws
(collectively, “Forward-Looking Information”). Forward-Looking
Information includes, but is not limited to, information with
respect to FSD Pharma's strategy, plans or future financial or
operating performance, receipt of any FDA approvals, the completion
of any trials regarding the use of FSD201 to treat COVID-19, the
safety of FSD201 or whether FSD201 may be effective in treating
COVID-19, the costs associated with such planned trials and our
belief that we have sufficient cash to complete the Phase 2 study,
our ability to obtain required funding and the terms and timing
thereof, the ultimate development of any FDA approved synthetic
compounds, the expected insurance recovery related to the
settlement agreement, the completion of the settlement contemplated
in the settlement agreement and the timing and closing of the sale
of certain non-core real estate assets. The use of words such as
“budget”, “intend”, “anticipate”, “believe”, “expect”, “plan”,
“forecast”, “future”, “target”, “project”, “capacity”, “could”,
“should”, “focus”, “proposed”, “scheduled”, “outlook”, “potential”,
“estimate” and other similar words, and similar expressions and
statements relating to matters that are not historical facts, or
statements that certain events or conditions “may” or “will” occur,
are intended to identify Forward-Looking Information and are based
on FSD Pharma’s current beliefs or assumptions as to the outcome
and timing of such future events. Such beliefs or assumptions
necessarily involve known and unknown risks and uncertainties that
could cause actual results to differ materially from those
expressed or implied in such Forward‐Looking Information. Certain
of these risks and uncertainties are described in the Company’s
continuous disclosure filings available under the Company’s SEDAR
profile at www.sedar.com and under the Company’s EDGAR profile at
www.sec.gov. Forward‐Looking Information is not a guarantee of
performance. The Forward-Looking Information contained in this
press release is made as of the date hereof, and FSD Pharma is not
obligated to update or revise any Forward- Looking Information,
whether as a result of new information, future events or otherwise,
except as required by law. Because of the risks, uncertainties and
assumptions contained herein, investors should not place undue
reliance on Forward Looking-Information. The foregoing statements
expressly qualify any Forward-Looking Information contained
herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112006099/en/
For further information: Sandy Huard, Head of
Communications, FSD Pharma Inc. sandy@fsdpharma.com (647) 864-7969
Donal Carroll, Chief Financial Officer, FSD Pharma Inc.
Dcarroll@fsdpharma.com Investor Relations
IR@fsdpharma.com
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