Update Provided on GBB Drink Lab, Inc. Litigation and Safety Shot
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Insights
The recent developments in the litigation between FSD Pharma and GBB Drink Lab carry significant legal and financial implications. The denial of the Motion to Dismiss by the court suggests that the case has sufficient grounds to proceed to the discovery phase. This phase is critical as it will determine the robustness of GBB's claims regarding the alleged breach of a nondisclosure agreement and misappropriation of trade secrets.
From a legal standpoint, the outcome of this litigation could set precedents for how similar cases might be handled in the future, particularly within the biopharmaceutical sector. If FSD Pharma is found to have breached the nondisclosure agreement, it could face substantial liabilities. Conversely, if the claims are deemed baseless, it could strengthen the position of companies defending against what they perceive as opportunistic litigation.
Furthermore, the fact that GBB's assets were sold for a fraction of the claimed value could either undermine GBB's valuation claims or suggest other strategic reasons for the lower sale price. This discrepancy might influence the court's assessment of damages if FSD Pharma is found liable.
The litigation case against FSD Pharma, demanding $53 million, is a significant financial concern for the company and its investors. The stock market typically reacts to such uncertainties and prolonged legal battles can lead to volatility in a company's stock price. Investors will be closely monitoring the discovery outcomes for potential impacts on FSD Pharma's financial health.
Should the litigation result in a financial setback for FSD Pharma, the consequences could extend beyond immediate cash flow issues to potentially affect future investment in research and development. This could have a knock-on effect on the company's pipeline of innovative assets and biotech solutions, which are crucial for long-term growth in the biopharmaceutical industry.
On the other hand, if FSD Pharma successfully defends against the lawsuit, it may reinforce investor confidence and stabilize the stock price. The company's ability to avoid a significant payout could preserve capital for strategic investments and operational expenses, thus potentially enhancing future earnings prospects.
The biopharmaceutical industry is highly competitive and the protection of intellectual property through nondisclosure agreements is a standard practice. The outcome of this litigation could influence how companies in the sector approach future mergers and acquisitions, particularly with regard to due diligence and the management of confidential information.
Market dynamics could shift if a precedent is set that affects the perceived risks associated with business negotiations and potential acquisitions. Companies may become more cautious, which could slow down the pace of consolidation within the industry. This could ultimately impact innovation and the speed at which new products are brought to market.
Additionally, the public nature of such a lawsuit can affect the reputation of the companies involved. FSD Pharma's handling of the situation and the final verdict may influence stakeholder trust and partnerships, which are essential for business growth in the biopharmaceutical sector.
TORONTO, ON / ACCESSWIRE / January 16, 2024 / FSD Pharma Inc. (NASDAQ:HUGE)(CSE:HUGE)(FRA:0K9A) ("FSD Pharma" or the "Company"), is a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions. The Company is providing this statement as an update regarding its litigation with GBB Drink Lab, Inc. ("GBB").
In May 2023, GBB filed a lawsuit against FSD Pharma alleging a material breach of a mutual nondisclosure agreement and trade secret misappropriation. FSD Pharma has categorically denied these allegations and filed a Motion to Dismiss the lawsuit. On January 8, 2024 the Court denied the Motion to Dismiss. This means only that FSD Pharma will now proceed with discovery, during which it is confident that it will be able to demonstrate not only that GBB's claims have no merit, but that this lawsuit, which baselessly demands
After being rebuked by FSD Pharma, GBB subsequently sold its assets to Jupiter Wellness, Inc. for a fraction of what it claims it was worth in its publicly filed Amended Complaint, which then changed its name to Safety Shot, Inc. (NASDAQ:SHOT) and began marketing and selling an alleged alcohol detoxification product.
In discovery, FSD Pharma will have the opportunity to demonstrate all of the reasons why it chose not to acquire GBB. FSD Pharma continues to remain concerned about unsubstantiated and misleading public statements made about Safety Shot, Inc.'s product, including the claim that the product "accelerates the process of converting alcohol to sugar in the body," (GBB Drink Lab Files
FSD Pharma remains confident in its legal position, and looks forward to vindicating its rights and exposing GBB and its bully tactics.
About FSD Pharma
FSD is a biopharmaceutical company dedicated to building a portfolio of innovative assets and biotech solutions for the treatment of challenging neurodegenerative, inflammatory and metabolic disorders and alcohol misuse disorders with drug candidates in different stages of development. Through its wholly-owned subsidiary, Lucid Psycheceuticals Inc. ("Lucid"), FSD is focused on the research and development of its lead compound, Lucid-MS (formerly Lucid-21-302) ("Lucid-MS"). Lucid-MS is a patented new chemical entity shown to prevent and reverse myelin degradation, the underlying mechanism of multiple sclerosis, in preclinical models. FSD is also focused on the research and development of UNBUZZD™, a proprietary formulation of natural ingredients, vitamins, and minerals to help with liver and brain function for the purposes of quickly relieving individuals from the effects of alcohol consumption. FSD maintains a portfolio of strategic investments through its wholly-owned subsidiary, FSD Strategic Investments Inc., which represent loans secured by residential or commercial property.
Cautionary Note Regarding Forward-Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "plans", "expects", "expected", "scheduled", "estimates", "intends", "anticipates", "hopes", "planned" or "believes", or variations of such words and phrases, or states that certain actions, events or results "may", "could", "would", "might", "potentially" or "will" be taken, occur or be achieved. More particularly, and without limitation, this press release contains forward-looking statements contained in this press release include statements concerning the future of FSD Pharma and are based on certain assumptions that FSD Pharma has made in respect thereof as of the date of this press release. FSD Pharma cannot give any assurance that such forward-looking statements will prove to have been correct.
Since forward-looking statements relate to future events and conditions, by their very nature they require making assumptions and involve inherent risks and uncertainties. The Company cautions that although it believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct and these risks and uncertainties give rise to the possibility that actual results may differ materially from the expectations set out in the forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties including, but not limited to: the fact that the drug development efforts of the Company and Lucid are at a very early stage; the fact that preclinical drug development is uncertain, and the drug product candidates of the Company and Lucid may never advance to clinical trials; the fact that results of preclinical studies and early-stage clinical trials may not be predictive of the results of later stage clinical trials; the uncertain outcome, cost, and timing of product development activities, preclinical studies and clinical trials of the Company and Lucid; the uncertain clinical development process, including the risk that clinical trials may not have an effective design or generate positive results; the potential inability to obtain or maintain regulatory approval of the drug product candidates of the Company and Lucid; the introduction of competing drugs that are safer, more effective or less expensive than, or otherwise superior to, the drug product candidates of the Company and Lucid; the initiation, conduct, and completion of preclinical studies and clinical trials may be delayed, adversely affected, or impacted by COVID-19 related issues; the potential inability to obtain adequate financing; the potential inability to obtain or maintain intellectual property protection for the drug product candidates of the Company and Lucid; and other risks. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this press release, which speak only as of the date of this press release.
Further information regarding factors that may cause actual results to differ materially are included in the Company's annual and other reports filed from time to time with the Canadian Securities Administrators on SEDAR+ (www.sedarplus.ca) and with the U.S. Securities and Exchange Commission on EDGAR (www.sec.gov), including the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2022, under the heading "Risk Factors." This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. The forward-looking statements contained in this document speak only as of the date of this document. FSD Pharma does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
Neither the CSE nor its regulation services provider accept responsibility for the adequacy or accuracy of this release.
Contacts:
FSD Pharma Inc.
Zeeshan Saeed, Founder, CEO and Executive Co-Chairman of the Board, FSD Pharma Inc.
Email: Zsaeed@fsdpharma.com
Telephone: (416) 854-8884
Investor Relations
Email: ir@fsdpharma.com, info@fsdpharma.com
Website: www.fsdpharma.com
SOURCE: FSD Pharma Inc.
View the original press release on accesswire.com
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