Naturally Splendid Enterprises Ltd (CVE:NSP) (OTCMKTS:NSPDF), the health food and ingredients company, said it was poised to form a joint venture that will take it into the coronavirus (COVID-19) treatment space, sending shares soaring.
The firm inked a letter of intent with Vancouver-headquartered Biologic Pharmamedical Research to form the venture, which will pursue carrying out Phase 2 clinical studies using one of Biologic's patented technologies as a candidate for a potential treatment, the company said Tuesday.
Naturally Splendid will have a 16% stake in the joint venture and be granted a 10% royalty on gross sales of all products and applications arising from the clinical study.
Biologic will own 82% with 2% assigned to key personnel within Biologic at their discretion.
Under the terms of the deal, Naturally Splendid will invest C$500,000 in cash into the joint venture for the following purposes:
- To prepare documentation for submission of the clinical trial application (CTA) to Health Canada.
- To prepare formal phase 2 clinical trials
- C$100,000 will be for inventory of the Covid-19 treatment product for the phase 2 clinical trials
- For ongoing clinical trials and further research and development for 12 months overseen by Biologic
- To prepare documentation for pre-IND application for a phase 2 COVID-19 clinical trial with the U.S. FDA.
- To prepare the firm's (Naturally Splendid) own internal pilot trial
Biologic is no stranger to Naturally Splendid and has supplied the latter with versions of this patented technology for almost two years, highlighted the group, adding that it has gained "excellent" overall understanding of the science and technologies to be used in this clinical study.
Naturally Splendid cautioned, however, that it was not making any "express or implied claims" that it can eliminate the coronavirus at this time.
"Although no guarantee to be accepted, Biologic has been given the go ahead to fast track a CTA (Clinical Trial Application) with Health Canada, after their preliminary review of the data," it added.
The joint venture will be granted certain license rights from Biologic patents as it relates to applications for treating coronavirus.
"The categories to be licensed will include, but are not be limited to COVID 19 applications as well as additional respiratory indications that may arise out of the fast tracked clinical trial," said Naturally Splendid.
The proposed treatment, taken in capsule form, would greatly reduce or eliminate the need for virus infected patients to congregate in hospitals or clinics for infusions or other complex treatments.
Shares in Toronto shot up 28.5% to C$0.045 each.
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