Cannvalate to divest MDMA business in $ 2.72 million deal to fight chronic pain
Australian medical cannabis access company Cannvalate has confirmed that Canadian company Global Wellness Strategies Inc will acquire 100% of its wholly-owned subsidiary Shanti Therapeutics in a $ 2.72 million deal focused on the development of MDMA-based psychedelic drugs.
Through this acquisition, Global Wellness aims to become the first company in the world to solve the puzzle of chronic pain with MDMA-based drugs, using clinical trials with the aim of advancing new drugs.
Chronic pain is believed to have an important psychosocial component that is not fully addressed by existing pain relievers, and there is currently no psychedelic drug approved for use by patients.
Global Wellness plans to conduct clinical research on a new patent protected drug containing MDMA (3,4-methylenedioxy methamphetamine, or ecstasy) as the main active ingredient to improve the psychosocial component of pain.
Once a positive proof of concept clinical study has been performed, toxicology and CMC (chemistry, manufacturing and controls) will be conducted before moving to investigational new drug status with the United States Food and Drug Administration. .
An unmet need
Global Wellness CEO Meris Kott said the acquisition of Shanti will focus on meeting an unmet need in a growing market.
“The discovery of new MDMA-based drugs and treatments for pain management through clinical trials is a game-changing opportunity for all of our stakeholders and we look forward to working closely with the team. Shanti to change the landscape of pain, ”he said.
“Most of us will know of at least one person who lives with the relentless suffering of chronic pain… this is our opportunity to use a new MDMA drug to alter this psychosocial component and begin the healing process. “
Research estimates that the global chronic pain treatment market will experience a compound annual growth rate of 6.5% from 2020 to 2030 and total revenues in 2030 of approximately $ 206.6 billion.
Under the terms of the agreement, Global Wellness will pay Cannvalate $ 2.72 million to acquire 100% of Shanti Therapeutics and all of its assets, including application patents, intellectual property, formulas, compounds, solutions, research and data, techniques and processes, brand and trade names and trademarks.
The consideration for the sale will be realized through the distribution of Global Wellness restricted shares in four tranches over an eight month period.
Each tranche will be subject to a 30-day volume weighted average price, with the base share price set at $ 0.20 each.
A bonus consideration of $ 2.72 million will be paid to Shanti based on the performance of assets and the achievement of certain milestones.
Shanti will retain the option of appointing a director to the board of directors of Global Wellness.
Australian investment management firm Peak Asset Management acted as financial advisor to both parties in the transaction.