On May 21, 2021 Enveric Biosciences (NASDAQ: ENVB) ("Enveric" or the "Company"), a patient-first biotechnology company developing novel cannabinoid medicines to improve quality of life for cancer patients, reported that it has entered into a definitive agreement to acquire MagicMed Industries Inc. ("MagicMed"), a privately-held biotechnology company focused on creating a library of novel derivative psychedelic molecules such as psilocybin, N,N-dimethyltryptamine (DMT) and other molecular derivatives with applications across multiple indications, in an all-stock transaction (Press release, Enveric Biosciences, MAY 24, 2021, View Source [SID1234580514]).
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Through its extensive R&D capabilities at the state-of-the-art facility at the University of Calgary, MagicMed has focused on the discovery and early development of novel drug candidates, structurally related to psychedelics with vastly improved pharmaceutical characteristics and commercial potential for the treatment of neurological and psychological indications. The Psybrary is MagicMed’s library of novel psychedelic derivatives developed through the combination of synthetic biology and traditional chemistry techniques. MagicMed has 13 patent applications filed for derivatives of psilocybin and DMT, 2 patent applications filed for derivatives of mescaline and MDMA with further intellectual property protection for mescaline, MDMA, ibogaine and LSD in process.
The acquisition of MagicMed will expand and complement Enveric’s current pipeline of naturally occurring compounds, which is primarily focused on cannabinoids, to now include a robust portfolio of psychedelic-derived molecules. Enveric intends to continue to develop patient-centric support care therapies in oncology and central nervous system (CNS) indications. Upon closing, Enveric intends to commence drug discovery and development for treatment of cancer-related Post Traumatic Stress Disorder (PTSD) patients who are currently in treatment for cancer and those who are in remission. It is anticipated that the PTSD drug development program holds the potential to be expanded in the future beyond cancer-related applications to include other patient populations, such as military veterans.
"Our proposed acquisition of MagicMed underscores the core fundamental mission of Enveric to form a drug discovery and clinical stage biotechnology company with a focus on bringing forward nature-originated therapies to improve the standard of care and serve unmet needs in oncology and CNS indications," said David Johnson, Chairman and CEO of Enveric Biosciences. "Psychedelics and cannabinoids, in our opinion, have extensive patient benefits for the mind and body. We welcome MagicMed’s world class research and development team led by Dr. Joseph Tucker, who not only have experience in psychedelic drug discovery, but also research experience in cannabinoids, as well. Patients who are currently being treated for cancer or are in remission are forced to face debilitating physical and mental side effects with very few treatment options available to alleviate their pain. PTSD, for example, is a significant unmet need for this patient population. Together, with the MagicMed team, following the closing of the acquisition, we plan to commence the discovery and development of psychedelics-derived therapies."
Once closing is complete, Dr. Joseph Tucker will be appointed Chief Executive Officer of the Company and David Johnson, current Chief Executive Officer and Chairman, will be appointed Executive Chairman.
Dr. Joseph Tucker is a seasoned executive who has built several publicly traded biotechnology companies. Dr. Tucker was a founder and chief executive officer of Stem Cell Therapeutics, which was acquired by Trillium Therapeutics in 2013. Dr. Tucker has also held the position of co-founder and CEO of Epimeron Inc., a University of Calgary start-up acquired in the creation of Willow Biosciences Inc. At Willow, Dr. Tucker served as Executive Chairman and COO. Prior to founding these companies, Dr. Tucker was a healthcare analyst with two investment banks and has also worked in technology commercialization for a university technology transfer office. Dr. Tucker received his Ph.D. in Biochemistry and Molecular Biology from the University of Calgary.
"Our mission at MagicMed has always been focused on unlocking the full potential of psychedelic-derived medicines for the treatment of neurological and psychological indications," added Dr. Joseph Tucker, Chief Executive Officer of MagicMed. "Complementing our R&D capabilities, working together with Enveric will allow us to leverage the company’s clinical team, all of whom are focused on advancing our extensive pipeline of molecules through the clinic to help serve the millions of patients who are suffering with mental health issues around the globe. Through this acquisition – in the best interest of each of our respective teams – we have bolstered our pipeline, bringing together a seasoned team of experts with the leadership skills and knowledge that is crucial to creating a platform that aims to address large unmet total addressable markets (TAM)."
The transaction is structured as an amalgamation under the Business Corporations Act (British Columbia). At the closing, a recently formed subsidiary of Enveric will amalgamate with MagicMed, with the resulting corporation being an indirect wholly owned subsidiary of Enveric. Under the terms of the amalgamation agreement and other related agreements , Enveric will issue the shareholders of MagicMed an aggregate of 9,946,969 shares of common stock of Enveric, as well as warrants, options and restricted stock units to acquire an additional 9,039,882 shares of common stock of Enveric. The current Enveric shareholders will own approximately 63.4% of the combined company’s common stock, as calculated on a fully diluted basis, and current MagicMed shareholders will own approximately 36.6% of the combined company’s common stock, as calculated on a fully-diluted basis. The agreement is subject to customary closing conditions and the approval of Enveric’s and MagicMed’s shareholders and is expected to close during the second half of 2021. Additionally, as part of the closing of the transaction, Enveric will receive approximately $4 million (CAD) in cash from the MagicMed Treasury.
David Johnson and Dr. Joseph Tucker will host a conference call to discuss the transaction today, May 24th at 8:30 a.m. ET.