FSD Pharma Inc. (NASDAQ: $HUGE) is a biotechnology company dedicated to developing innovative treatments for various medical conditions. Headquartered in Canada, the Company leverages cutting-edge research and technologies to create safe and effective pharmaceutical solutions that address unmet medical needs.
The company is committed to advancing drug development through rigorous clinical trials and collaborative efforts with leading institutions. Their pipeline includes promising candidates for conditions such as neurological disorders, inflammatory diseases, and cancer, reflecting the Company’s determination to impact patient lives positively.
Currently, through its wholly-owned subsidiary, Lucid Psycheceuticals Inc., the Company is laser-focused on the development of its lead compound, Lucid-MS, a patented neuroprotective compound that has demonstrated remarkable potential in preventing and reversing myelin degradation—the underlying mechanism behind multiple sclerosis (MS).
Additionally, FSD Pharma is making strides in the research and development of UNBUZZD™, a proprietary formulation of natural ingredients, vitamins, and minerals designed to aid in liver and brain function and provide swift relief from the effects of alcohol consumption.
A Promising Lead Compound for Multiple Sclerosis
Lucid-MS, FSD Pharma’s groundbreaking lead drug candidate, is a patented neuroprotective compound administered orally. In preclinical models, it has exhibited an exceptional ability to prevent and reverse myelin degradation, a core driver of the symptoms associated with MS and other neurodegenerative diseases and conditions.
Dr. Lakshmi Kotra, CEO of Lucid Psycheceuticals, a wholly-owned subsidiary of FSD Pharma, said, “There is an acute need today for effective, non-immunomodulatory, neuroprotective therapeutics, especially for the treatment of progressive stages of MS,”
FSD Pharma filed the Clinical Trial Application (CTA) for Lucid-MS on January 17, 2023, in preparation for the anticipated Phase 1 clinical trial. In a significant milestone, the Company received a No Objection Letter from Health Canada in February 2023, paving the way for a Phase 1 clinical trial of Lucid-MS.
Interim Phase I Results: Favorable Safety and Tolerability
On August 17, 2023, FSD Pharma’s Clinical Research Organization (CRO) published an interim blinded report for the first four cohorts of the Phase I clinical Trial. The Trial, a first-in-human single ascending dose study, evaluated Lucid-MS’s safety, tolerability, and pharmacokinetic profile in human participants.
The interim results were encouraging, indicating favorable safety and tolerability profiles, aligning with Lucid-MS’s impressive preclinical data spanning over 12 years.
Dr. Lakshmi P. Kotra said, “Our objective in this FIH study was to determine the safety, tolerability, and pharmacokinetic profile of Lucid-MS in humans, and we seem to have been successful in meeting those goals. Developing novel, non-immunomodulatory therapies with new mechanisms of action is a very high priority for all stages of MS. We are inspired to expeditiously pursue the next stages of clinical development to bring such novel therapies for patients.”
Dr. Andrzej Chruscinski, VP of Clinical and Scientific Affairs at Lucid Psycheceuticals, expressed excitement, stating, “We are thrilled with the results described in this report, and consider this to be a major milestone for our team.”
Promising Future for Lucid-MS
Moving forward, FSD Pharma will continue to develop Lucid-MS as a potential treatment for progressive MS. They plan to begin a Phase II trial in the second half of 2024, with primary and secondary objectives focused on tolerability, dosage (leveraging the ascending dosage in Phase I), and efficacy in preventing myelin degradation.
If future results match the promising Phase I and animal model data, Lucid-MS could become a multi-billion-dollar treatment for nearly 2 million sufferers in North America and the European Union alone.
UNBUZZD™: A Groundbreaking Solution for Alcohol Intoxication
FSD Pharma’s UNBUZZD™ is a game-changing functional beverage that seeks to provide relief from inebriation and accelerate alcohol metabolism, leading to reduced Breath Alcohol Concentration (BrAC) and a faster path to sobriety. The active ingredients in UNBUZZD™’s proprietary natural ingredients-based formula help restore mental alertness post-alcohol consumption in about 15-30 minutes. Small focus group research suggests that UNBUZZD™ accelerates the reduction of BrAC compared to the body’s natural process.
Strategic Partnerships and Licensing
FSD Pharma has demonstrated its commitment to bringing UNBUZZD™ to the market through strategic partnerships and licensing agreements. The Company has licensed the UNBUZZD™ formulation to Celly Nutrition Corp. (Celly NU), which will produce, market, and sell the product. Celly NU will pay FSD Pharma a 7% royalty on sales until a total of $250,000,000 has been paid, at which point the rate is reduced to 3%.
In addition, FSD Pharma issued 100 million common shares to Celly NU at a deemed value of $50,000 as a license fee and received an anti-dilution warrant, allowing them to increase their stake in the Company to 25% within the next five years for a nominal consideration. Furthermore, FSD Pharma entered into a secured loan agreement with Celly Nutrition, lending $1,000,000 with a 3-year term and 10% annual interest payable on each anniversary.
An agreement was finalized on October 5, 2023, in a strategic move to distribute a portion of FSD Pharma’s Celly Nu shareholdings to specific security holders. Approximately 45.7 million Celly Shares were allocated to FSD Pharma Securityholders, while FSD Pharma retained a substantial 154.3 million Celly Shares.
Financial Arrangements And Legal Approval
On November 21, 2023, FSD Pharma announced that the plan of arrangement, approved by its security holders, involved the distribution of Celly NU common shares to Class A and Class B shareholders and FSD Pharma Distribution Warrant holders.
The arrangement received Approval from Class A Shareholders and 99.49% approval from Class B Shareholders and FSD Pharma Distribution Warrant holders.
To add an official seal of Approval, FSD Pharma got a Final Order from the Ontario Superior Court of Justice on November 24, 2023. This important legal Approval allowed the Company to proceed with its plan, ensuring that Celly Nu Shares were distributed to Class A and Class B shareholders and those holding FSD Pharma Distribution Warrants.
FSD Pharma Advances UNBUZZD™ Clinical Trials
On February 26, 2024, FSD Pharma Inc. announced a significant milestone – its Australian subsidiary, HUGE Biopharma Australia Pty Ltd., had signed an agreement with Ingenu CRO Pty Ltd. to conduct the METAL-1 TRIAL. Its goal is to measure the safety and effectiveness of UNBUZZD™ in healthy volunteers experiencing induced alcohol intoxication using a randomized, double blind, and placebo-controlled approach.
Today, on March 11, 2024, FSD Pharma announced that they have applied to a Phase 1b clinical trial. The application was sent to an Australian human research ethics committee, and upon Approval, FSD Pharma plans to commence recruiting trial participants in April.
Dr. Andrzej Chruscinski, FSD Pharma’s Vice President of Scientific and Clinical Affairs, expressed enthusiasm about this milestone, stating: “Months of dedicated work from our team and expert advisors have culminated in conceptualizing and designing this meaningful clinical study. We look forward to collaborating closely with our Australian partners and the ethics committee to swiftly advance this exciting project that could potentially offer a solution for those who consume alcohol.”
Financing and Corporate Updates
FSD Pharma has secured funding through various means to support its ongoing research and development efforts, including private placements and at-the-market offerings. On December 5, 2023, FSD Pharma closed a non-brokered private placement, issuing 24 Class A Shares at $1.90 per share, yielding $45.60 in gross proceeds. Xorax Family Trust and Fortius Research and Trading Corp., entities linked to FSD insiders, acquired all the shares in a “related-party transaction.”
More recently, on February 16, 2024, FSD Pharma entered into an at-the-market offering agreement (ATM Agreement) with H.C. Wainwright & Co., LLC. This agreement allows FSD Pharma to offer and sell Class B Subordinate Voting Shares with an aggregate offering price of up to US$11,154,232 through Wainwright as the sales agent, who will receive a 3.0% cash commission on the gross proceeds raised.
Furthermore, on February 28, 2024, FSD Pharma announced two key developments. The first was a debt settlement aimed at settling outstanding obligations. It involved issuing 545,000 Class B Subordinate Voting shares for $1.17 per share, amounting to $637,650. Second, they issued 55,000 restricted share units (RSUs) to several consultants as part of their equity incentive plan.
Market Performance and Outlook
FSD Pharma’s shares experienced a notable movement on March 8, 2024, closing at $0.81, a decline of 5.8% from its closing price of $0.86. With a market capitalization of approximately $32.378 million, the price reflects investors’ valuation in the highly volatile pharmaceutical sector. FSD Pharma is set to release its financial results for the 2023 (Q4) quarter ending on March 29, 2024, with analysts predicting an Earnings Per Share (EPS) forecast of -$0.14.
While the US pharmaceutical industry saw a slight decline of 1.5% in the past week, influenced by Eli Lilly’s 2.6% drop, the sector has achieved a 26% growth over the last 12 months, with expectations for earnings to expand by 21% annually in the coming years. As of March 10, 2024, the market capitalization stands at $1.9 trillion, with revenues reported at $355.3 billion and earnings at $22.4 billion. It reflects a price-to-earnings (PE) ratio of 84.0x and a price-to-sales (PS) ratio of 5.3x, suggesting strong investor optimism for long-term growth.
FSD Pharma Pioneering New Frontiers in Healthcare
FSD Pharma pioneers novel treatments, addressing Multiple Sclerosis through Lucid-MS and alcohol’s effects with UNBUZZD™. Early-phase trials for Lucid-MS show promise in filling an unmet need for non-immunomodulatory MS therapies. UNBUZZD™ represents a groundbreaking approach to mitigating alcohol’s impact.
As FSD Pharma progresses towards further clinical milestones, including the anticipated Phase II trials for Lucid-MS and the innovative clinical study for UNBUZZD™, the Company’s strategic decisions, from securing regulatory approvals to entering strategic licensing and distribution agreements, underline its potential to revolutionize treatment paradigms in their respective fields.
With a keen eye on medical advancement and shareholder value, FSD Pharma is poised to significantly contribute to healthcare, potentially improving millions of lives while creating substantial market opportunities. As the Company moves forward, the anticipation of its success in upcoming trials and product launches offers a beacon of hope for patients and investors alike, marking FSD Pharma as a biopharmaceutical company to watch in the years to come.
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