RNS Number : 2913D

Apollon Formularies plc

02 March 2022

02 March 2022

Apollon Formularies Plc

Joint Venture with Tri-Medi Canna, South Africa

Apollon Formularies plc (AQSE: APOL, "Apollon" or the "Company"), a UK based international pharmaceutical company trading on the Aquis Stock Exchange, is pleased to announce that it has signed a Joint Venture Agreement (the "Joint Venture") with Tri-Medi Canna Pty Ltd. ("Tri-Medi Canna"), a South African based medical cannabis company, to establish a jointly-owned incorporated South African company, Apollon SA Pty Ltd. (the "JV Company").

Transaction Highlights:

-- The Joint Venture represents Apollon's first international expansion, with the potential to reach over 350 million people in the Southern African Development Community ("SADC")

-- Apollon will receive a gross royalty on sales for all Apollon products sold within South Africa before extending its commercial reach to the wider SADC region under a renewable, mutually exclusive license agreement, the initial term of which is 12 months

-- To strengthen commercial ties between the parties, Tri-Medi Canna will become a shareholder in Apollon via share subscription totalling GBP300,000 over two tranches, the first of which will be for GBP150,000 at 2.5p per share

Joint Venture Highlights:

-- The Joint Venture will give Apollon a commercial footprint in South Africa, offering the Company an additional avenue to monetise its proprietary medical and technical experience

-- Tri-Medi Canna is a South African-based medical cannabis company in the process of gaining a large volume (256 hectares) cultivation license from the South African Health Products Regulatory Authority ("SAHPRA") and has engaged with both national and local arms of government in South Africa

   --    Apollon will own 49% of the JV Company with Tri-Medi Canna owning the remaining 51%. 

-- All future operating licenses along with any future intellectual property developed under the JV Company will be jointly owned

-- Africa's medical cannabis sector is forecast to be worth up to $7.1 billion by 2023 [i] with South Africa potentially making up 70% of the current market [ii]

-- The Joint Venture will open additional opportunities for Apollon to undertake clinical trials on its proprietary medicinal cannabis formulations for treating cancer


Apollon has been seeking opportunities to expand its operations internationally into growth markets where it can make its proprietary medical cannabis formulations for various cancer conditions available to a wider patient base while continuing to collect valuable clinical data. Apollon's Joint Venture with Tri-Medi Canna will provide the Company access to the South African market as well as the wider SADC region which has a population in excess of 350 million people. The Joint Venture will seek to establish a strong foothold in Africa which is widely considered to be the last remaining significant region of pharmaceutical growth globally. Tri-Medi Canna will apply for licenses to replicate those held by Apollon in Jamaica through the SAHPRA and/or an applicable overseeing body in South Africa.

The Joint Venture will be mutually beneficial, with Tri-Medi Canna gaining access to Apollon's vast experience across the value chain, from skill transfers in extraction and processing, pharmaceutical level drug development, clinical trials, patient treatment centres, experienced physicians with medical cannabis treatment experience and the exclusive Licensed distribution of Apollon's proprietary products and formulations once the necessary licenses have been granted by SAHPRA. When these License milestones have been achieved, Tri-Medi Canna will also benefit from Apollon's ongoing international exposure to European markets.

Tri-Medi Canna will also engage with the South African Government to obtain letters of support from the Department of Trade and Industry, Agricultural Research Council and clinical specialists working collaboratively on cannabis research at the University of Kwazulu Natal amongst other leading academic institutions to bolster continuing research and development in the medical cannabis sector.

Transaction and Share Subscription

The Joint Venture has an initial contract term of 12 months and shall be governed by a definitive joint venture agreement (the "Definitive Joint Venture Agreement"). Amongst other things, the Definitive Joint Venture Agreement shall provide for:

-- the incorporation of Apollon SA Pty Ltd which will be owned 49/51 between Apollon and Tri-Medi Canna respectively;

   --    signature of a shareholders agreement regulating the parties' ongoing relationship; 

-- a gross royalty agreement on sales revenue from Tri-Medi Canna for Apollon products distributed and sold in South Africa and the wider SADC region; and

   --    Joint ownership of newly devopled intellectual property and operating licenses. 

To strengthen commercial ties between the parties, Tri-Medi Canna will become a shareholder in Apollon via an ordinary share subscription totalling GBP300,000 over two tranches. The first tranche will be executed shortly after signature of the Definitive Joint Venture Agreement for GBP150,000 at 2.5p per share.

Tri-Medi Canna will also subscribe for a further GBP150,000 in ordinary shares in Apollon upon entering into the Definitive Joint Venture Agreement which will be based on the market price of Apollon's ordinary shares on the date of the Definitive Joint Venture Agreement being made.

Stene Jacobs, COO of Apollon Formularies for Europe and Africa, commented, "This is a major step forward in Apollon's plans to reach global markets and the African market which still remains largely untapped. Tri-Medi Canna's relationship with necessary key stakeholder in South Africa will provide Apollon with the platform to infiltrate this market, whilst providing the local community with access to training, knowledge and skills and contribute to local employment.

"South Africa has the opportunity to build on its reputation as the regional best in class operator and to showcase its already successful cultivation and plant genetics abilities. In conjunction with this, the South African medical fraternity is deeply admired for being at the forefront of medical advancements, with deep scientific knowledge in conventional and alternate medicine.

"This Joint Venture Agreement validates Apollon's business model in Jamaica and our ability to replicate and scale up operations to other international jurisdictions. We look forward to keeping the market updated on our progress as we enter this exciting chapter in Apollon's journey."

Thokozani Shongwe, CEO of Tri-Medi Canna, stated, "We are delighted to be working with Apollon Formularies as we expand our offering across South Africa and grow our knowledge and skill base through this partnership. Apollon has forged firm routes in Jamaica and its proprietary formulas have consistently proven to be effective during rigourous testing on pre-clinical third-party pharmaceutical laboratory testing conduced in the US on 3D Cell cultures.

"This is a crucial time in the development of the African cannabis sector, and I am proud that Tri-Medi Canna can work with Apollon to establish a strong foothold from which to expand into the SADC and beyond."

The Directors of the Company accept responsibility for the contents of this announcement.

For additional information, please visit www.apollon.org.uk or contact:

Apollon Formularies

   Tel:                                                      +44 771 198 0221 
   Stene Jacobs                                      stene@apollon.org.uk 

Peterhouse Capital Limited (Corporate Adviser)

   Tel:                                                       +44 207 220 9795 
   Guy Miller                                            gm@peterhousecapital.com 

BlytheRay (Financial PR/IR-London)

   Tel:                                                       +44 207 138 3204 
   Tim Blythe/Megan Ray                     apollon@blytheray.com 

About Apollon Formularies and Apollon Formularies Jamaica

Apollon Formularies plc is an international medical cannabis company headquartered in the United Kingdom. Apollon Formularies Jamaica Limited is a pharmaceutical company incorporated and operating in the Commonwealth of Jamaica. Apollon Jamaica is licensed by the Jamaican government's Cannabis Licensing Authority (CLA) to cultivate, perform research and development, process, and sell medical cannabis therapeutic products that include legal medical cannabis to treat various illnesses under medical supervision. Apollon and Apollon Jamaica are parties to a Commitment Agreement whereby Apollon is entitled to 95% of Apollon Jamaica's Net Profits, and per a Stock Pledge Agreement that includes Stephen D. Barnhill, M.D., Apollon is to be assigned the entire 49% equity interest of Apollon Jamaica held by Dr. Barnhill, which is the maximum interest in a medical cannabis company allowed to be held by a non-Jamaican, upon the CLA approving the assignment.

About Tri-Medi Canna

Tri-Medi Canna is a subsidiary of Trisab Pty Ltd a South African medical cannabis initiative established in the Kwazulu Natal province of South Africa. Tri-Medi Canna aims to develop sustainable local economies through cultivation, processing and distribution of Cannabis based Medicinal Products (CBMP's) in South Africa and the greater SADC region. They are a sustainable, focus driven business that aims to revolutionise the pharmaceutical industry in South Africa while uplifting previously disadvantaged local communities through education, employment creation and dignity restoration.

[i] Prohibition Partners, Africa Cannabis Report, March 2019

[ii] Department of Trade and Agricultural Research Council, South Africa

- Ends -

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(END) Dow Jones Newswires

March 02, 2022 02:01 ET (07:01 GMT)

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