TIDMMXC
RNS Number : 2776W
MGC Pharmaceuticals Limited
22 April 2021
22 April MGC Pharmaceuticals Ltd
2021 MGC Pharma to acquire Israeli clinical and medical research
ASX Code: company, MediCaNL
MXC
LSE Code:
MXC
Key Highlights :
-- MGC Pharma to acquire 100% of worldwide pharmaceutical
clinical research company, MediCaNL Inc (MCL).
-- On completion of the acquisition, MediCaNL will design,
manage and run all clinical trials for MGC Pharma in accordance
with the European Medicines Agency, Federal Drug Administration,
ICH Good Clinical Practice and Israeli health regulations.
-- The MediCaNL acquisition will deliver significant and
immediate cost savings to the Company.
-- MediCaNL will become an internal business unit running at
cost only for MGC Pharma, eliminating the retail operating margins
being paid to third party CRO providers on all future clinical
trials, as MGC Pharma will be undertaking multiple clinical trials
in 2021/22 and in future years.
-- Two Phase I and Phase II clinical trials and one Phase III
clinical trial planned to be undertaken by MGC Pharma in 2021 alone
for CannEpil, CogniCann and CimetrA.
-- MediCaNL currently have 11 clients (excluding MGC Pharma)
with 40 ongoing projects, including clinical trials as well as
involvement in seven Investigational New Products (INP), with two
approved by the FDA and four in progress.
-- MediCaNL generated approximately $1 million in revenues in 2020 with a 25% profit margin.
-- Transaction terms including consideration of AU$6 million in
MXC shares, 30% on settlement and 70% in instalments as deferred
consideration (following shareholder approval).
-- Acquisition leverages the medical research expertise in-house
which significantly reduces preclinical lead times, provides the
ability to better define clinical trial protocols and builds
stronger relationships with regulators moving forward.
MGC Pharmaceuticals Ltd (ASX, LSE: MXC, 'MGC Pharma' or 'the
Company'), a European based bio-pharma company specialising in the
production and development of phytocannabinoid-derived medicines,
is pleased to announce the acquisition of 100% of the issued share
capital of MediCaNL Inc (the "Acquisition").
MediCaNL Inc is the holding company of MediCaNL Israel 2019 Ltd,
an Israeli company operating in and providing specialist services
to the pharmaceutical sector for development of new medicines.
MediCaNL offer s clinical and preclinical trial services, as well
as assistance with clinical trials in the form of research data
from past studies of all Phase I to IV using a variety of treatment
methods .
All the trials MediCaNL will operate for MGC Pharma will be
carried out to the most rigorous clinical standards in accordance
with the European Medicines Agency (EMA), US Federal Drug
Administration (FDA), ICH Good Clinical Practice (GCP), and Israeli
health regulations (as applicable).
MediCaNL has worked on seven Investigational New Products (INP)
in conjunction with the FDA, two having been approved and four
ongoing, highlighting their experience with the pharmaceutical
regulators worldwide.
Currently, MediCaNL has 11 clients (excluding MGC Pharma) and is
working on 40 different projects and clinical trials. MediCaNL will
provide expert regulatory and preclinical knowledge, including 18
years of research management experience, which MGC Pharma will
leverage going forward. In 2020, MediCaNL generated revenues of
almost $1 million, with a profit margin of 25%.
Dr Nadya Lisodover, CEO of MediCaNL, has been working with MGC
Pharma over the past two years, guiding its clinical trials and
offering regulatory advice as a consultant CRO to the Company.
Nadya will now work full time for MGC Pharma as Chief Research
Officer to streamline and improve the cost effectiveness of the
Company's clinical trial process.
Material Transaction Terms
The consideration for the Acquisition is $6,000,000 in MXC
shares, based on the volume weighted average price per share of the
Company calculated on a 10-day VWAP from settlement, with 30% of
the consideration shares to be issued at settlement (under the
Company's existing Listing Rule 7.1 placement capacity) and the
remaining 70% (the Deferred Consideration) to be issued in
instalments as follows (subject to shareholder approval):
(a) 20% on the date which is 4 months from the date of
settlement;
(b) 20% on the date which is 7 months from the date of
settlement;
(c) 20% on the date which is 10 months from the date of
settlement; and
(d) 10% on the date which is 13 months from the date of
settlement,
The acquisition will otherwise be on customary terms and there
will be no associated changes to the MGC Pharma board or current
executive management team as a result of the Acquisition.
The Company will seek shareholder approval for the issue of the
Deferred Consideration at an upcoming shareholder meeting. A Notice
of Meeting is currently being prepared and will be dispatched to
shareholders shortly. The Company will also seek a waiver from ASX
to enable the Deferred Consideration Shares to be issued in
accordance with the above timetable, outside of the mandated
three-month period post shareholder approval.
There are no conditions precedent to the acquisition that remain
outstanding and as such, settlement of the acquisition is expected
to occur shortly.
Strategic rationale
The Acquisition will enable MGC Pharma to speed up the process
of bringing medicines and products to market by increasing our
throughput capability, and making clinical trial performance and
design an insourced activity. The Acquisition will also deliver
significant ongoing cost savings to the Company, as MGC Pharma will
be undertaking one Phase III and two-Phase II clinical trials on
three different products in 2021, along with two Phase I clinical
trials planned for H2 calendar 2021.
In the usual course of business, MGC Pharma would be paying a
significant fee to a third-party provider to manage and operate its
clinical trial program. In order to maximise financial returns to
shareholders, MGC Pharma will be significantly reducing the
operating costs for conducting clinical trials to deliver material
overall cost savings in the near term and future years.
MediCaNL also offers a number of clear operational and strategic
opportunities, which allows the Company to expedite delivery of its
long-term growth strategy. These include:
-- streamlining the clinical trial process saving both time and costs;
-- leveraging existing expert relationships to significantly
bolster in-house expertise and capabilities; and
-- fostering better relationships with regulators globally.
This will advance MGC Pharma's ongoing clinical research and
deliver an expedited and more streamlined pathway to
commercialisation for the Company's proprietary IMPs.
Current ongoing clinical trials
-- CannEpil â - Phase IIb clinical trial underway at the
Schindler Hospital, Israel on the safety and efficacy of CannEpil
as an add on treatment in children and adolescents with refractory
epilepsy.
-- CogniCann(TM) - Phase II clinical trial underway at the
University of Notre Dame in Perth, Western Australia to evaluate
the potential behavioural benefits of CogniCann (TM) may have on
patients with dementia and Alzheimer's.
-- CimetrA(TM) - Ethics Committee approval received for a Phase
III clinical trial to commence at Nazareth Hospital EMMS and Rambam
Health Care Campus, Haifa in Israel
Roby Zomer, Co-founder and Managing Director of MGC Pharma,
commented: "The acquisition of MediCaNL is a strategically
important moment and is crucial in being able to deliver on our
ambitious plans for MGC Pharma. By acquiring MediCaNL and bringing
their services and expertise in-house, we not only cut significant
costs from our forecasted clinical trial expenditure but also
remove much of the red tape involved in the preclinical and
clinical trial process."
"MediCaNL is led by some of the world's most renowned doctors
and scientists who will be a great asset to the MGC Pharma team.
They operate at the highest levels of quality and integrity,
enabling MGC Pharma to establish and nurture stronger relationships
with regulators in the years to come as we expand our suite of
products and undergo more clinical trials."
--Ends--
Authorised for release by the Board, for further information
please contact:
MGC Pharmaceuticals Ltd UK PR Advisors - Tavistock
Roby Zomer Charles Vivian
CEO & Managing Director +44 207 920 3150
+61 8 6382 3390 Charles.Vivian@tavistock.co.uk
info@mgcpharma.com.au
UK Broker - Turner Pope Australian IR Advisors - Media
Andy Thacker & Capital Partners
+44 203 657 0050 Rod Hinchcliffe
andy.thacker@turnerpope.com +61 412 277 377
Rod.Hinchcliffe@mcpartners.com.au
About MGC Pharma
MGC Pharmaceuticals Ltd (LSE: MXC, ASX: MXC) is a European based
bio-pharma company developing and supplying affordable standardised
phytocannabinoid derived medicines to patients globally. The
Company's founders were key figures in the global medical cannabis
industry and the core business strategy is to develop and supply
high quality phytocannabinoid derived medicines for the growing
demand in the medical markets in Europe, North America and
Australasia. MGC Pharma has a robust product offering targeting two
widespread medical conditions - epilepsy and dementia - and has
further products in the development pipeline.
Employing its 'Nature to Medicine' strategy, MGC Pharma has
partnered with renowned institutions and academia to optimise
cultivation and the development of targeted phytocannabinoid
derived medicines products prior to production in the Company's
EU-GMP Certified manufacturing facility.
MGC Pharma has a number of research collaborations with world
renowned academic institutions, and including recent research
highlighting the positive impact of using specific phytocannabinoid
formulations developed by MGC Pharma in the treatment of
glioblastoma, the most aggressive and so far therapeutically
resistant primary brain tumour.
MGC Pharma has a growing patient base in Australia, the UK,
Brazil and Ireland and has a global distribution footprint via an
extensive network of commercial partners meaning that it is poised
to supply the global market.
Follow us through our social media channels
Twitter: @MGC_Pharma
Facebook: @mgcpharmaceuticals
LinkedIn: MGC Pharmaceuticals Ltd.
Instagram: @mgc_pharma
About MediCaNL
MediCaNL is a medical research company based in Israel,
specialising in medicinal cannabis. MediCaNL's goal is to advance
medical knowledge and improve the health of people around the
world. It guides clients through the entire conical research
process, from concept to development and provides application of
research data support. MediCaNL currently manages clinical trials
in Israel, Europe and Australia providing services in person and
online.
MediCaNL expertise spans, consulting in preclinical phases,
developing experimental designs and protocols, scouting for and
selecting clinical trial locations, preparing submission packages
and liaising with the Israeli Ministry of Health and ethics
committees, recruiting patients, providing test products and
storage facilities, managing data, monitoring and quality control
of clinical trials and publication writing.
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