PharmAla Biotech Holdings Inc. (CSE: MDMA) and Vitura Health Limited (ASX: VIT) an Australian company, have formed a joint venture to supply MDMA and psilocybin for medical use in Australia.
The new company, Cortexa Pty Ltd was announced on Tuesday and will provide the psychedelic compounds to authorized medical practitioners and for clinical trials in Australia.
PharmAla has already manufactured a batch of MDMA and psilocybin and under the agreement, Cortexa will have the right to import and sell these compounds in Australia for medical use beginning July 1, when new regulations take effect. Cortexa also has the option to license PharmAla’s production technology to manufacture the drugs in Australia. However, initially, the compounds will be imported from Canada.
Cortexa will pay PharmAla an annual licensing fee of $250,000 for three years and a 5 per cent royalty on net profits. The joint venture still needs regulatory approval but if either party breaches the agreement, they would have to pay the other a break fee of $500,000.
To help Cortexa get started, Vitura has agreed to provide up to $2.2 million in loans with an interest rate of the official cash rate plus 5 per cent. Vitura will provide the loans from its own funds.
Read more: Incannex orders psilocybin and MDMA from PharmAla Biotech
Read more: PharmAla Biotech and Filament Health partner to release MDMA capsules
The joint venture aims to make Cortexa the leading supplier of MDMA and psilocybin for medical and research use in Australia’s emerging psychedelics industry. Supported by Vitura’s distribution network, Cortexa will provide the compounds to authorized prescribers and for clinical trials.
“In seeking a partner to be the market-leading supplier of GMP-manufactured MDMA and Psilocybin in Australia, we looked far and wide,” PharmAla Biotech CEO Nick Kadysh said.
Kadysh said the company spoke to half a dozen entities in Australia, seeking not only an organization with excellent relationships with regulators and good capitalization but a real reputation for operational excellence.
“On every metric, Rodney Cocks, Guy Headley and Vitura have exceeded our expectations,” Kadysh added. “We consider ourselves very lucky to have them as a partner and look forward to great success in the Australian market over the coming years – both for Cortexa, and more importantly, for patients accessing psychedelics in Australia.”
PharmAla Biotech is a biotechnology company that researches, develops and produces MDMA and similar compounds. The Vancouver-based company aims to address the lack of clinical-grade MDMA to enable trials and develop new drugs. PharmAla focuses on regulatory compliance and has built North America’s first MDMA supply chain approved for pharmaceutical manufacturing.
PharmAla stock dropped by 9.18 per cent to $0.44 on the Canadian Securities Exchange.
“We are very pleased to be forming this JV with Nick Kadysh and his highly experienced PharmAla team,” Vitura CEO Rodney Cocks said.
“Vitura is proud that one of the world’s leading players in the psychedelic space has joined forces with us to establish Cortexa as the leading MDMA and Psilocybin supplier in the Australian market,” Cocks said.
Vitura stock went up by 4 per cent on Tuesday to AUD$0.38 in the Australian Securities Exchange.