MXC to acquire Licensed European Medical Cannabis Company
MGC Pharmaceuticals (ASX:MXC) has executed a binding Heads of Agreement (HOA) to acquire Czech-based medical cannabis company, PANAX Pharma s.r.o.,.
Subject to the completion of due diligence, MGC Pharma will receive 25% equity issued up front and 55% equity issued for MXC’s commitment to fund operating costs for the next year up to €700,000 (AU$1,021,080).
The final commercial term is an option to acquire the remaining 20% at MXC’s election for €800,000 of MGC Pharma ordinary shares.
The deal gives MGC Pharma access to the state of the art Vukoz Production facility.
MGC will start immediate work with the government run Vukoz Institute on a research and development program to grow medical grade cannabis. The medical cannabis license includes access to over 1000m2 of indoor growing space at the Vukoz facility.
The research being conducted at the facility is focused on developing high cannabidiol (CBD) and high THC strains alongside Tissue Culture mediums and protocols. The outcomes of the research and new genetics will be utilised for MXC’s growing operations and for use in the clinical trials of MXC’s Derma Cosmetic products, which will include treatment for psoriasis and acne.
The Derma brand of product are produced in Slovenia.
Through Panax’s licensing agreement, MGC Pharma will also have the ability to take and commercially utilise the waste biomass from the research facilities for the production of CBD extract, combined with a license for the import and export of medical cannabis.
As an indoor operation the Vukoz facility has year-round growing cycles and anticipates being able to treat over 1400kg of medical cannabis biomass waste, which MXC estimates can be processed into 90kg of CBD extract per year.
The acquisition gives MXC the ability to grow different strains of CBD to be used for different purposes and the research and development license enables the production of medical cannabis without the quantity restrictions applied to THC content, which is responsible for the psychoactive effects of cannabis. This open up the door for MXC to produce a large variety of medical grade cannabis products and materials in Europe under the license agreements held by Panax.
“Our acquisition of Panax significantly strengthens MGC Pharma’s medical cannabis research and production capabilities,” said co-founder and Managing Director of MGC Pharmaceuticals Nativ Segev.
“Not only does it build on our outdoor Slovenian growing facility and production capacity, it also allows the company to produce high intensity medical grade cannabis products for our clinical trials and research programs planned for Israel, Europe and eventually Australia.”