TORONTO–(BUSINESS WIRE)–FSD Pharma Inc. (NASDAQ: HUGE) (CSE: HUGE) (ENG: 0K9A) (“FSD-Pharma“or the”Company“), a life sciences holding company dedicated to building a portfolio of biotechnology assets and solutions, is pleased to announce today the closing of the sale of the former cannabis processing plant of the Company located in Cobourg, Ontario, Canada (the “Facility”) for gross proceeds of C$16,400,000 in cash.
The sale, completed on May 6, 2022, included a 26.1 hectare parcel of land and a 50,800 square meter building, which FSD Pharma acquired in November 2017 for $5,500,000. Net of commissions and fees, the sale generated approximately $15,480,780 in non-dilutive cash which was added to the Company’s balance sheet. The facility was not essential to the company’s business model when it decided in early 2020 to exit the crowded cannabis production market to focus as a biotechnology company, advancing new drug candidates targeting lucrative areas of unmet medical need such as muscular sclerosis, depressive disorders and inflammatory disorders.
“This is a major achievement that positions us well for the future, especially given the current state of financial markets. While most businesses suffered huge write-downs on cannabis asset disposals, we were able to realize a significant net profit from the sale of the facility,” said Anthony Durkacz, interim CEO and co. -Executive Chairman of FSD Pharma. “Combined with our existing cash, we are sufficiently capitalized for our operations through 2025, including budget allocations for planned clinical trials and without having to turn to the capital markets for additional funds. Our cash position now exceeds our market capitalization as we continue to work to create value for our shareholders.
About FSD Pharma
FSD Pharma Inc. is a biotechnology company with three drug candidates in different stages of development. FSD BioSciences, Inc. (“FSD BioSciences), a wholly-owned subsidiary, is focused on the pharmaceutical research and development of its lead compound, ultra-micronized palmitoyl ethylamine (“PEAS”) or FSD-PEA (formerly known as FSD-201). Lucid Psycheceuticals Inc. (“Lucid”), a wholly-owned subsidiary, focuses on the research and development of its lead compounds, Lucid-PSYCH (formerly Lucid-201) and Lucid-MS (formerly Lucid-21-302). Lucid PSYCH is a molecular compound identified for the potential treatment of mental health disorders. Lucid-MS is a molecular compound identified for the potential treatment of neurodegenerative disorders.
Certain statements contained in this document are “forward-looking statements”. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “expects”, “expects”, “estimates”, “has intends”, “anticipates”, “hopes”, “plans”, or “believes”, or variations of these words and phrases, or states that certain actions, events or results “might”, “could”, “would”, “could”, “potentially” or “will” be taken, occur or be achieved. Forward-looking statements in this press release include comments made regarding the Company’s capitalization and budgeted financial requirements, proposed clinical trials and planned financing activities. FSD cannot guarantee that these forward-looking statements will prove to be accurate. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Because forward-looking statements relate to future events and conditions, by their very nature they require assumptions to be made and involve inherent risks and uncertainties. The Company cautions that although the assumptions are believed to be reasonable under the circumstances, these risks and uncertainties give rise to the possibility that actual results could differ materially from the expectations set forth in the forward-looking statements. Factors that could cause such material differences include, but are not limited to: the fact that the drug development efforts of Lucid and FSD BioSciences are at a very early stage; the fact that preclinical drug development is uncertain and that product candidates from Lucid and FSD BioSciences may never proceed to clinical trials; the fact that the results of preclinical studies and early-stage clinical trials may not be predictive of the results of later-stage clinical trials; the uncertain outcome, cost and timing of product development activities, preclinical studies and clinical trials of Lucid and FSD BioSciences; the uncertain clinical development process, including the risk that clinical trials may not have an effective design or generate positive results; the potential inability to obtain or maintain regulatory approval for Lucid’s and FSD BioSciences’ product candidates; the introduction of competing drugs that are safer, more effective or less expensive than, or otherwise superior to Lucid’s and FSD BioSciences’ drug candidates; the initiation, conduct and completion of preclinical studies and clinical trials may be delayed, adversely affected or impacted by issues related to COVID-19; the potential inability to obtain adequate financing; the potential inability to obtain or maintain intellectual property protection for product candidates of Lucid and FSD BioSciences; and other risks. Further information regarding factors that could cause actual results to differ materially is included in the annual reports and other reports of the Company filed from time to time with the Canadian Securities Administrators on SEDAR (www.sedar.com) and with the United States Securities and Exchange Commission on EDGAR (www.sec.gov) under the heading “Risk Factors”. Any forward-looking statement contained in this press release speaks only as of its date. The Company does not undertake to update forward-looking statements, except as required by applicable securities laws.