Mrkt BUZZ DanCann Pharma: Important deal with Tetra finalized
5 maj 2021
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Important deal with Tetra finalized
On March 2 2021, DanCann Pharma A/S (DanCann or the company) signed a letter of intent with Tetra Bio-Pharma for the distribution of three cannabis based medical products. Today, DanCann released the information that the letter of intent has been converted to a formal agreement. DanCann receives distribution rights in the Nordic countries and Germany for Reduvo Adversa® and Qixleef™.
This deal is important for Dancann Pharma. It is an additional source of revenue in addition to in-house products. This is also a value driver for the company already at this stage as it increases the probability of a future revenue stream from imports.
Quixleef™ consists of dried cannabis and is inhaled. It is being developed as a drug candidate. A phase II-trial, REBORN1, is planned to start soon. It is intended to compete with opioids for pain relief. The same product is sold under the tradename ENJOUCA™ in jurisdictions where clinical trials are not required for it to be sold. In these jurisdictions it is classified as medical cannabis rather than as a drug. Quixleef™ will be a prescription drug.
The third product, Reduvo Adversa®, is an improved version of Dronabinol (a drug used for certain symptoms in HIV and cancer patients). Tetra is planning to file for an approval in the US during 2022.
Dancann Pharma will pay a total consideration of DKK 6.25 million in upfront and milestones. The company estimates peak sales of DKK 340-410 million in 2028 and royalties of up to DKK 62.5 million corresponding to a royalty rate of 15 percent. These are the costs DanCann has to pay for exclusivity on its markets. As a distributor, Dancann Pharma will also have to import the goods which is a cost. The company’s estimated peak sales figures indicate a good potential for the deal.
Carlsquare recently initiated coverage of Dancann Pharma with a fair value per share of DKK 6.5. Read the full report here.
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