Enveric Biosciences Signs Non-Binding Term Sheets to Pursue the Exclusive Out-Licensing of Three Classes of Compounds

Rhea-AI Summary

Enveric Biosciences (ENVB) signs three non-binding term sheets with an undisclosed biotechnology company for out-licensing of compounds, potentially leading to $200 million in milestone payments. The agreements entail exclusive global licenses for drug development, with royalty rates up to 10% on future sales. Enveric's extensive library of novel molecules aims to address mental health conditions, showcasing the value of its proprietary drug discovery platforms.

Insights

Financial Analyst

The signing of three non-binding term sheets by Enveric Biosciences for out-licensing its novel compounds is a strategic move that could potentially unlock significant revenue streams. The structure of the deal, involving milestone payments and execution fees up to $200 million, alongside royalty rates ranging from 2.5% to 10%, provides a lucrative incentive for the company. However, it's crucial to note that such agreements are contingent upon the successful progression through regulatory milestones, such as IND approvals and clinical trial phases. The financial health and stock valuation of Enveric could be considerably influenced by the actualization of these payments and the market's perception of the company's potential for future earnings.

It's also important to consider the impact of the agreement on the company's cash flow. Upfront payments can provide immediate liquidity, which is beneficial for a biotech company that typically incurs high research and development costs. However, the bulk of the financial benefit lies in the long-term, assuming clinical success. Investors should weigh the inherent risks associated with drug development, such as potential delays or failures in clinical trials, which could affect the expected timeline for these payments.

Medical Research Analyst

The development of neuroplastogenic small-molecule therapeutics represents a cutting-edge approach to treating mental health conditions such as depression, anxiety and addiction disorders. Enveric's focus on this therapeutic area is noteworthy, as the current treatment landscape has a high unmet need for innovative solutions. The use of proprietary platforms like Psybrary™ and PsyAI™ for drug discovery positions Enveric at the forefront of leveraging computational chemistry and artificial intelligence in biotechnology.

While the potential for these compounds is significant, the path to commercialization is fraught with scientific and regulatory challenges. The success of the out-licensed compounds will depend on their efficacy, safety profile and differentiation from existing treatments. Given that the compounds are still in the preclinical stage, there is a long road ahead before they can reach the market and generate sales. For stakeholders, the long-term benefits hinge on the licensee's ability to navigate the clinical development process effectively and ultimately deliver marketable drugs that address the pressing needs of patients with CNS disorders.

Market Research Analyst

The mental health market is rapidly expanding, with an increasing demand for new treatments. Enveric's decision to out-license its compounds could be a strategic effort to capitalize on this growth by tapping into the strengths of another company with specialized development capabilities. By assuming responsibility for future development, the licensee can potentially accelerate the timeline to bring these treatments to market. The exclusive, royalty-bearing global licenses also suggest that Enveric is positioning itself to benefit from global sales, which could be substantial given the worldwide prevalence of CNS disorders.

For investors, the announcement of these term sheets may be seen as a positive indicator of Enveric's potential for future partnerships and business expansion. However, the non-binding nature of the term sheets implies that there is still some uncertainty until definitive agreements are in place. The ability of Enveric to secure additional out-licensing opportunities from its remaining molecule portfolios will be a critical factor to watch, as it will further indicate the market's reception to their proprietary drug discovery platforms and the commercial viability of their compounds.

Potentially significant milestone payments and execution fees if all development and sales criteria are met for all three agreements.

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Enveric Biosciences (NASDAQ: ENVB) (“Enveric” or the “Company”), a biotechnology company dedicated to the development of novel neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety, and addiction disorders, is pleased to announce that it has signed three non-binding term sheets with an undisclosed biotechnology company to pursue the out-licensing of three classes of compounds. The compounds come from Enveric’s extensive library of over 1,000 novel molecules generated using the Company’s Psybrary™ platform and proprietary computational chemistry and artificial intelligence (AI) drug-discovery system (PsyAI™).

The three term sheets contemplate that the undisclosed licensee would receive exclusive, royalty-bearing global licenses to develop and sublicense the assets, along with cash buyout options and future option rights to substantially related assets in the Enveric portfolio. The licensee would assume responsibility for all future preclinical and clinical development for all human and/or animal pharmaceutical applications.

The term sheets further provide that, Enveric could be eligible to receive future development and sales milestone payments and execution fees for the three licenses, which in total could add up to $200 million, assuming certain conditions are met, including receiving approval for the investigational new drug (IND) applications and completing Phases I through III testing of the licensed products. Royalty rates on each of the three licenses could range from 2.5% up to 10% on future sales, depending on meeting certain sales criteria. The compound classes under the term sheets come from two of the seven portfolios of preclinical molecules that Enveric recently unveiled as available for out-licensing. Numerous molecules and classes remain available for additional out-licensing opportunities.

“Patients living with serious mental health conditions have seen insufficient innovation for far too long, and we are excited for the opportunity to progress several of the novel compounds generated using our drug discovery engine,” said Joseph Tucker, Ph.D., Director and CEO of Enveric. “We look forward to working with our partner, and we are confident in their leadership and capabilities to work on further developing these drug candidates to advance treatment options for patients. Ultimately, we believe the definitive licensing agreements, once negotiated and finalized, could represent an excellent potential source of revenue for Enveric, and could demonstrate the value creation from Enveric’s discovery capabilities and proprietary PsyAI™ and Psybrary™ platforms, which have already generated an impressive library of compounds targeting a variety of CNS disorders.”

About Enveric Biosciences

Enveric Biosciences (NASDAQ: ENVB) is a biotechnology company dedicated to the development of novel neuroplastogenic small-molecule therapeutics for the treatment of depression, anxiety, and addiction disorders. Leveraging its unique discovery and development platform, Psybrary™, Enveric has created a robust intellectual property portfolio of New Chemical Entities for specific mental health indications. Enveric’s lead program, EB-003, is a first-in-class approach to the treatment of difficult-to-address mental health disorders designed to promote neuroplasticity without inducing hallucinations in the patient. Enveric is also developing EB-002, formerly EB-373, a next generation synthetic prodrug of the active metabolite, psilocin, being studied as a treatment of psychiatric disorders. Enveric is headquartered in Naples, FL with offices in Cambridge, MA and Calgary, AB Canada. For more information, please visit www.enveric.com.

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans,” “expects” or “does not expect,” “proposed,” “is expected,” “budgets,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” or “believes,” or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, should, would, or might occur or be achieved. Forward-looking statements may include historical statements and statements regarding beliefs, plans, expectations, or intentions regarding the future and are based on the beliefs of management as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including, but not limited to, the ability of Enveric to: negotiate and finalize definitive agreements based on the three out-licensing term sheets and perform pursuant to the terms thereof; carry out successful clinical programs in Australia; achieve the value creation contemplated by technical developments; avoid delays in planned clinical trials; establish that potential products are efficacious or safe in preclinical or clinical trials; establish or maintain collaborations for the development of therapeutic candidates; obtain appropriate or necessary governmental approvals to market potential products; obtain future funding for product development and working capital on commercially reasonable terms; scale-up manufacture of product candidates; respond to changes in the size and nature of competitors; hire and retain key executives and scientists; secure and enforce legal rights related to Enveric’s products, including patent protection; identify and pursue alternative routes to capture value from its research and development pipeline assets; continue as a going concern; and manage its future growth effectively. The three out-licensing term sheets identified herein are non-binding and may not result in definitive agreements or attainment of the licensing fees referenced therein.

A discussion of these and other factors, including risks and uncertainties with respect to Enveric, is set forth in Enveric’s filings with the Securities and Exchange Commission, including Enveric’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Enveric disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240228697980/en/

Investor Relations

Tiberend Strategic Advisors, Inc.

Daniel Kontoh-Boateng

(862) 213-1398

dboateng@tiberend.com

Media Relations

Tiberend Strategic Advisors, Inc.

Casey McDonald

(646) 577-8520

cmcdonald@tiberend.com

Source: Enveric Biosciences

FAQ

What does Enveric Biosciences (ENVB) announce in the press release?

Enveric signs three non-binding term sheets with an undisclosed biotechnology company for out-licensing of compounds.

What is the potential value of milestone payments mentioned in the PR?

The milestone payments could add up to $200 million if certain conditions are met.

What are the royalty rates on future sales for Enveric's licensed products?

Royalty rates could range from 2.5% up to 10% on future sales, depending on meeting certain sales criteria.

What is the focus of Enveric's novel molecules and compounds?

Enveric's compounds target the treatment of depression, anxiety, and addiction disorders.

Who is the Director and CEO of Enveric Biosciences?

Joseph Tucker, Ph.D., is the Director and CEO of Enveric Biosciences.