Algernon Pharmaceuticals Inc. (CSE:AGN, OTCQB:AGNPF) said it has set up Algernon NeuroScience (AGN Neuro), a new wholly-owned private subsidiary of AGN Pharma, to advance its psychedelic DMT (N,N-Dimethyltryptamine) stroke program.
The company said it has valued the psychedelic DMT research program at US$20 million and has completed an asset transfer and trademark license agreement, transferring all DMT research program assets into AGN Neuro. The company has also signed a management agreement with AGN Neuro to provide all day-to-day operations, as well as management of the DMT stroke clinical trial program.
AGN Pharma’s valuation of the DMT program was based on multiple public company comparables for a wide range of pharmaceutical research programs, including for the indication of stroke, that is in Phase 1 clinical trial stage.
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AGN Neuro will remain a private company until it has advanced through to the completion of a Phase 2a stroke study which is planned to start in the fourth quarter of 2023. Based on the strength of the data from that study, AGN Neuro will review and consider a potential direct IPO listing onto the NASDAQ at that time.
AGN Neuro has filed a Form 1-A offering statement with the US Securities and Exchange Commission (SEC), seeking qualification to raise up to US$10 million for AGN Neuro by offering up to 37.5% of its common shares with majority ownership residing with AGN Pharma, under a Tier II Regulation A+ offering (Reg A+). The capital raised will be used for research, development, and program management costs related to the completion of a Phase 1 and Phase 2a DMT stroke study.
“Reg A+ financings continue to be a very successful way of raising capital by allowing the innovative online and digital marketing of securities to the general public on a global scale,” Christopher J. Moreau, CEO of AGN Pharma said in a statement.
“By creating AGN Neuro with the sole focus of advancing the DMT stroke research program through its future clinical trials, we are working to create an exciting new investment vehicle with the goal of enhancing shareholder value in the process," he added.
Algernon Pharmaceuticals is a Canadian clinical-stage drug development and repurposing company investigating multiple drugs for unmet global medical needs.
Contact the author at jon.hopkins@proactiveinvestors.com