Drug delivery specialist SUDA Pharmaceuticals (ASX: SUD) has finalised a deal with medical cannabis company Cann Pharmaceutical Australia that will see the pair develop an oro-mucosal spray to treat drug-resistant epilepsy, melanoma and motion sickness.
The Perth-based company today announced the finalised product development, licence and supply agreement, which follows a binding term sheet signed by the companies in June.
SUDA is focused on administering drugs through the oral mucosa, that is, the cheeks, tongue, gums and palate. The benefits of administering drugs this way include a lower dosage, reduced side effects and faster response time.
Under the official deal, SUDA’s proprietary OroMist technology will be utilised to deliver Cann’s pharmaceutical-grade cannabis formulations in the form of a novel oral spray.
Fully funded by Cann
In the June term sheet announcement, SUDA said Cann would fund the development and take responsibility for the regulatory approvals of the product on a worldwide basis.
The initial development phase to develop a formulation along with permeability testing was expected to cost $184,400.
In today’s update to the market, SUDA said further product development costs would be jointly determined by the companies following the completion of this feasibility study, with Cann continuing to fully fund them.
On regulatory approval, SUDA will arrange the manufacture and supply of the product to Cann with a 10% handling fee.
The key terms of the finalised agreement include a $200,000 upfront fee plus development milestone fees totalling $650,000 and royalty payments equating to 10% of net sales of the product.
Canberra-based Cann Pharmaceutical is a majority-owned subsidiary of Israeli licensed phyto-cannabinoid producer Better Holdings and is fully licensed in Australia for production, sales and export of medical cannabis.
The company is partnered up with Australian and international research and institutions and is about to commence a phase 2 clinical trial using phyto-cannabinoid medicines to treat epilepsy.