Celadon Pharmaceuticals
Celadon Pharmaceuticals has seen its stock price spike this week after revealing that its supply agreement with Danish firm Valeos is now ‘actively contributing to Celadon’s operations.’
In September 2024, Celadon announced that it had entered into a strategic partnership with Valeos to boost its high-THC medical cannabis production capacity in a deal it said would ‘significantly accelerate’ its ability to supply medical cannabis to European markets, specifically Germany.
The deal sees Celadon license its proprietary genetics to Veleos, which will then produce pharmaceutical-grade Active Pharmaceutical Ingredients (APIs) on its behalf, increasing production capacity by 100%, allowing Celadon to cultivate an additional 3 tonnes a year.
Celadon will receive 50% of the profits from Valeos’ Danish EU-GMP facility and will have the option to choose cash or equity as compensation.
According to the company, this new capacity supports Celadon’s ability to fulfil its commitments under a German supply contract, announced in 2023, which is expected to generate up to £26m in revenue over its three-year term, or £8.7m annually.
“The collaboration is now beginning to deliver tangible results, with Celadon raising its first invoice to Valeos as part of this agreement. Moving forward Celadon now anticipates regular revenue to be generated as operations at Valeos’ facility progress and production using Celadon’s genetics and IP scales further,” it said in an RNS update.
Celadon’s CEO James Short, said: “This is a pivotal moment for Celadon as we see the early results of our collaboration with Valeos come to life. By leveraging Valeos’ cultivation capacity and our proprietary genetics and IP, we will be able to expedite supply to our existing customers, including our key German contract, while simultaneously creating a new revenue stream for the company.”
The announcement came just weeks after Celadon provided an update on its precarious financial situation.
Business of Cannabis recently reported that, as of November 15, 2024, Celadon had just £0.3m of cash reserves, meaning it only had guaranteed runway until January 2025.
This is due to the continued delay of funding from two sources. From its £7m credit facility, the company has received £0.5m so far (£0.3m initially and an additional £0.2m recently), but is still owed £0.5m.
Earlier this month, Celadon said that the provider of the committed credit facility has now transferred an additional £147k under the company’s £1m drawdown request, and it expects to receive a further £103k this month.
However, Celadon said this would only guarantee it a runway until March 2025.
Phillip Morris, Avicanna
Vectura Fertin Pharma, a subsidiary of tobacco giant Phillip Morris, has announced a new strategic collaboration with Canadian medical cannabis firm Avicanna.
The scientific and medical affairs collaboration agreement will aim to improve the understanding of medical cannabis access and applications in Canada.
The collaboration will prioritise engagement with the Canadian medical community, patients, and insurers to gain insights into the challenges associated with accessing medical cannabis.
To achieve this, the two companies will establish a joint Scientific and Medical Affairs Committee, which will facilitate research studies and deliver evidence-based educational resources. Avicanna’s medical cannabis platform, including Mymedi.ca, will play a key role in improving access and patient support.
This marks the latest inroad into the medical cannabis industry by Philip Morris International, the world’s largest tobacco company by market cap.
Unlike competitors Altria and British American Tobacco, which have invested in consumer-oriented cannabis companies, PMI has chosen to focus more on the medical cannabis industry as a cornerstone of its diversification strategy.
Its not yet clear whether this deal marks the first steps towards an eventual acquisition of Avicanna, but the company’s investment in Syqe Medical in 2016 eventually turned into full ownership in 2023
DanCann Pharma
DanCann Pharma has become the latest listed company to approve a reverse stock split in a bid to inflate its share price.
At an extraordinary general meeting this week, DanCann Pharma shareholders unanimously approved a proposal to implement a reverse share split with a 1,000:1 ratio.
This means that every 1,000 existing shares with a nominal value of DKK 0.001 will be consolidated into one new share with a nominal value of DKK 1.
This consolidation process will take place over the next four weeks, during which time shareholders can still buy and sell their old shares as usual. After the four-week period, shareholders with fewer than 1,000 old shares will receive a cash payment of DKK 0.0023 per share.
The company will keep the redeemed shares, except for a small number that will be cancelled. This is a standard practice to help the company manage its share structure. The redeemed shares that are kept will be held by the company as treasury shares.
As part of this process, the company’s leadership has been given permission to buy back some of its own shares over the next few years, if needed. This is a common practice that helps companies manage their share structure and ensure everything runs smoothly.