TETRA Pharm has successfully completed its first external funding round raising €2m in capital to help it launch clinical trials and expand its operations across Europe.
The round was led by European venture capital fund Leafy Tunnel joined by Stockholm-based cannabis investment firm Enexis.
It marked Leafy Tunnel’s seventh early-stage investment in the medical cannabis and psychedelics space.
Tetra Pharm is a Danish cannabis biotech company, founded by two pharmaceutical industry veterans.
New Cannabis Drugs
It is situated in the leading life-science cluster ‘Medicon Valley’ and has GMP certified production facilities in Copenhagen set up to produce a variety of cannabinoid drug formulations.
According to its co-founder and CEO, Martin Rose, it has already secured several distribution deals across main markets in Europe, with ‘many more on the way’.
Tetra Pharm plans to use the investment to initiate trials in a new drug candidate, while finalising an expansion project which will increase its production output by 1,000% next year.
“It’s going to be an exciting year, with new facilities, clinical trials, and new products on the market. We are therefore really excited and grateful for the support from Leafy Tunnel and Enexis,” said Mr Rose.
Leafy Tunnel, which is aiming to build a portfolio of 15 companies in the alternative medicine market over the next few years, believes Tetra Pharm has the potential to become a category leader in the cannabinoid pharmaceuticals industry.
‘Future Billion Dollar Winner’
Its founding partner Bek Muslimov told BusinessCann: “We’re shooting for the stars by betting early on billion dollar category winners in this space.”
Mr Muslimov also added that the European cannabis space is ‘ripe for the creation of a next generation of pharmaceutical companies, focused on cannabinoid formulations’, and Tetra Pharm looks poised to fulfil that potential.
“Tetra Pharm is an exciting deal for us since the founders have a vision to build a cannabinoid biotechnology leader from the ground up, and I believe the medical cannabis pathway would allow them to launch novel products and get to the market quickly.
“The founders are already working on a promising pipeline of products. The reason why we backed this company is mostly down to the team.”
Compliance Focus
Enexis Co-Founders Amaury De Poret and David Bonnier added: “Due to its proximity to our Stockholm base, we have been following the developments of the Danish medical cannabis ecosystem very closely and we believe that Tetra Pharm is one of the most interesting actors to have emerged from that ecosystem.”
Tetra Pharm’s co-founders Mr Rose and Jesper Breum have spent most of their professional lives working at big global pharmaceutical companies and their combined experience was reportedly crucial to Leafy Tunnel’s investment decision.
After visiting the facility in October, Leafy Tunnel’s co-founders Mr Muslimov and Nikolay Tretiyakov said they were impressed by the high standards of compliance built into the operational processes of the company stemming from decades of the founders’ combined experience in the pharmaceutical sector.
They added that, from an investment perspective, it was also convincing that Tetra Pharm was one of the few companies in Denmark with a licence to cultivate and manufacture cannabis that was solely owned by founders.
Other companies are generally either joint ventures with North American cannabis companies or their solely-owned subsidiaries.
As a ‘long term investor’, Leafy Tunnel believes Tetra Pharm has the potential to ‘transform into a player similar to GW Pharma.’
“The endgame for the founders is to build an end-to-end life science company that will run clinical trials and develop cannabinoid pharmaceuticals. And that, for us as venture capital investors, is a much more valuable proposition.” Mr Muslimov added.
