LGC Capital Announces Agreement to Acquire a Significant Interest in Fully Licenced European Pharmaceutical Company, Freia Farmaceutici Srl.
- LGC Capital to acquire a significant stake in European pharmaceutical company, Freia.
- Freia is currently the only company in Italy, and one of few in Europe with EFSA approved hemp-based pharmaceutical products.
- Freia currently has 6 products on the market; a further 8 have been authorized and will be launched in 2019. Another 9 drugs are awaiting authorization for commercial use from the Italian Ministry of Health.
- Freia has been granted 2 patents and submitted a further 5 patent applications.
- Freia plans to expand sales of its approved drugs in to other European and Asian markets in 2019.
MONTREAL, May 16, 2019 (GLOBE NEWSWIRE) -- LGC Capital Ltd. (TSXV: LG and OTC-QB: LGGCF) (“LGC”) is pleased to announce that it has entered into an investment agreement to acquire a 35% equity interest in the hemp-focused Italian pharmaceutical company, Freia Farmaceutici Srl (“Freia”).
Freia’s Market Presence
Freia was established in 2009 and is currently the only company in Italy, and one of the few in Europe, to have developed and marketed hemp-based pharmaceutical products authorized by the Italian Ministry of Health.
Freia currently owns 2 patents, has filed 5 patent applications, and is in the process of completing 6 additional applications. Currently Freia has 6 registered pharmaceutical drug products in the market intended for patients on radio & chemotherapy treatment, suffering from atopic dermatitis & psoriasis, and from dysmetabolism (hypercholesterolemia, diabetes and endocrine dysfunction). Freia’s product pipeline includes 6 products already authorized in the nutrition and topical fields, 8 further products have been authorized in the gynecological field and are to be launched in 2019, another 9 products are awaiting authorization and 12 products are in the development stage in the areas of gastroenterology & nutrition. A special research project also involves an application for use in the treatment of multiple sclerosis. Since its establishment the company has been conducting several clinical Trials in the above therapeutic areas.
Since June 2014, Freia has conducted market tests in Italy through medical information activities (multi-mandated agents) to validate the true value of the products and their therapeutic potential.
Financial performance: In 2017 Freia achieved sales of CAD$ 740k and EBITDA of CAD$ 265k (36% EBITDA margin) which was achieved with an initial suite of authorized drugs in the market. In 2018, with the addition of further authorized drugs to Freia’s portfolio, sales levels increased by 74% to CAD$ 1.29 million and EBITDA grew to CAD$ 280k (22% EBITDA margin)*. In 2019, Freia will be focusing on expanding its business nationally and internationally through the sales of increased volumes of existing drugs and the roll out of a further eight authorized drugs into the market.**
*We note that 2018 financial indicators quoted for Freia are currently unaudited and subject to an upcoming external audit.
** 2017 & 2018 @ 15/05/2018 EUR to CAD exchange rate
LGC and Freia’s existing shareholders have entered into an investment agreement whereby LGC will acquire a 35% equity interest in Freia for a total cash consideration of $4,847,033 CAD to be paid in three installments over the course of ten months.
The investment agreement contains standard representations, warranties and covenants of the parties, and closing of the transaction is subject to standard closing conditions and final acceptance by the TSX Venture Exchange. LGC has also appointed members to Freia’s board of directors.
Mazen Haddad , CEO of LGC stated:
We believe our partnership with Freia is very strategic having access to an EU Pharma company provides significant future leverage. For example this relationship can facilitate access to medicinal cannabis licensing. Currently, the business has excellent growth prospects which the LGC team can help fulfill. Freia will be core to LGC’s pharma strategy building a portfolio of medicines that can fully bring cannabis health benefits from belief to clinically trialed, statistics-based foundations that doctors can rely on. Despite many anecdotal examples of cannabis being effective medicinally the greater medical community is still seeking statistics-based information to give more proof and confidence of these benefits. In fact, we are seeing rapid adoption of Freia’s medicines explicitly because they are providing doctors with fact-based findings from their clinical trials in a traditional manner which doctors respect.
About the EFSA: is a European agency funded by the European Union that operates independently of the European legislative and executive institutions (Commission, Council, Parliament) and EU Member States. It was set up in 2002 following a series of food crises in the late 1990s to be a source of scientific advice and communication on risks associated with the food chain. The agency was legally established by the EU under the General Food Law - Regulation 178/2002. The agency is the European equivalent to the American FDA. The General Food Law created a European food safety system in which responsibility for risk assessment (science) and for risk management (policy) are kept separate. EFSA is responsible for the former area, and also has a duty to communicate its scientific findings to the public.
About LGC Capital Ltd (www.lgc-capital.com)
LGC Capital is a leading cannabis investment firm with a focus on the legal global cannabis market. Through its growing portfolio of investment companies, LGC is building a transversal integrated organization of interconnected legal cannabis companies with cultivation, processing and distribution in Australia, Jamaica, Switzerland, Italy, and Canada serving domestic and export markets. LGC Capital Ltd. is a Canadian incorporated public company listed on the TSX Venture Exchange (TSXV: LG) and the US OTC-QB exchange (OTCQB: LGGCF).
Through its partners and assuming pending transactions under review by the TSXV are approved, LGC presently will have interests in Jamaica, Switzerland, Italy, Canada and Australia.
LGC partners currently sell cannabis products in over 1,000 points of sale across Switzerland and Italy under the ONE Premium Cannabis and EasyJoint brands as well as medical cannabis oils in Australia under the Little Green Pharma brand. LGC's partners' branded products are available in a variety of formats including medicines, Cosmetics, dry cannabis flower, tinctures, oils and seeds.
For further information please contact:
President, John McMullen, +1-416-803-0698, firstname.lastname@example.org
Chief Financial Officer, Mark Shinners, +447827960971, email@example.com
Investor Relations, Dave Burwell, +1-403-221-0915, firstname.lastname@example.org
Notice Regarding Forward Looking Statements
This press release may contain forward-looking statements with respect to LGC and their respective operations, strategy, investments, financial performance and condition. These statements can generally be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of LGC and Freia could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, government regulation and the factors described under "Risk Factors and Risk Management" in LGC's Management's Discussion and Analysis for the three months ended December 31, 2018, as filed on SEDAR (www.sedar.com). The cautionary statements qualify all forward-looking statements attributable to LGC and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and neither LGC nor Freia has any obligation to update such statements, except to the extent required by applicable securities laws. Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.