SciSparc Finalizes Exclusive Global Out-Licensing Agreement for its Pain Therapy Valued at $3 million

Rhea-AI Summary

SciSparc (Nasdaq: SPRC) has signed an Exclusive Patent License Agreement with Polyrizon for the out-licensing of its SCI-160 program for pain treatment. The deal is valued at $3 million in Polyrizon securities, with potential additional milestone fees of $3 million in cash and royalties. SCI-160 is a proprietary synthetic combination of cannabinoids and N-acylethanolamines that has shown promising results in pre-clinical studies, demonstrating analgesic effects comparable to high-dose morphine without significant side effects. This agreement allows SciSparc to potentially benefit from the program's development without further investment, addressing the need for effective pain treatments amid the opioid abuse crisis.

Positive

• Exclusive global out-licensing agreement valued at $3 million in Polyrizon securities
• Potential for additional $3 million in cash milestone fees and royalties
• SCI-160 program showed promising pre-clinical results in pain treatment
• Opportunity for revenue without additional investment in development

Negative

• Consideration received in shares rather than cash, which may be less liquid
• Additional cash payments and fees dependent on meeting uncertain development milestones

Financial Analyst

The $3 million licensing deal for SciSparc's pain therapy program is a positive development for the company's financial outlook. While the initial consideration is in shares, not cash, it still represents a tangible value for SciSparc's intellectual property. The potential for additional $3 million in milestone fees and future royalties could provide a steady revenue stream if the therapy proves successful. However, investors should note that these future payments are contingent on meeting development milestones, which carries inherent risks. The deal structure allows SciSparc to monetize its research without further investment, potentially improving its cash position and focusing resources on other pipeline projects. This strategic move could enhance SciSparc's financial flexibility in the competitive pharmaceutical landscape.

Medical Research Analyst

SciSparc's SCI-160 program shows promising potential in the critical field of pain management. The pre-clinical studies indicating comparable efficacy to high-dose morphine without significant side effects is particularly noteworthy. This could address the pressing need for effective, non-addictive pain treatments amidst the ongoing opioid crisis. The combination of cannabinoids and N-acylethanolamines represents an innovative approach to pain therapy, potentially offering a new class of analgesics. However, it's important to remember that pre-clinical success doesn't guarantee clinical efficacy. The true value of SCI-160 will be determined by its performance in human trials, which will be Polyrizon's responsibility under this agreement. The out-licensing strategy allows for continued development without direct financial burden on SciSparc.

Legal Expert

The exclusive global out-licensing agreement between SciSparc and Polyrizon presents some interesting legal considerations. The deal structure, involving share-based compensation and potential milestone payments, is a common approach in biotech licensing. However, the potential conflict of interest with SciSparc's CEO serving on Polyrizon's board warrants scrutiny. While disclosed, this relationship could raise questions about deal terms and valuation. Investors should be aware that milestone-based agreements carry inherent uncertainties and the realization of full value depends on future developments. The global nature of the license also introduces complex international IP considerations. As Polyrizon gains sublicensing rights, careful contract drafting is important to protect SciSparc's interests in downstream agreements and ensure proper royalty flow.

SciSparc will receive consideration in shares, and in addition may receive cash payments and fees if certain development milestones are met

TEL AVIV, Israel, Aug. 16, 2024 (GLOBE NEWSWIRE) -- SciSparc Ltd. (Nasdaq: SPRC) ("Company" or "SciSparc"), a specialty clinical-stage pharmaceutical company focusing on the development of therapies to treat disorders and rare diseases of the central nervous system, announced that it has signed an Exclusive Patent License Agreement (the “License Agreement”) with Polyrizon Ltd. (“Polyrizon”) for the out-licensing of its SCI-160 program (the “Assets”) for the treatment of pain.

According to the License Agreement, Polyrizon will receive exclusive, royalty-bearing global license to develop and sublicense the Assets. In exchange, SciSparc would be entitled to receive consideration  in the form of Polyrizon securities valued at $3 million, as well as potentially milestone fees of approximately $3 million in cash, if certain development milestones will be met, as well as royalties.

SCI-160 is an innovative, proprietary synthetic combination of cannabinoids and N-acylethanolamines in the field of pain treatment. Based on numerous pre-clinical studies conducted by the Company, several proprietary combinations have been found to be involved in mediating analgesic effects in the peripheral nervous system without causing significant side effects in both acute and chronic pain.

Moreover, in certain studies, SCI-160 was found to be well tolerated, did not cause any significant adverse clinical effects, and had a comparable analgesic effect to high-dose morphine and, in some instances, exerted even greater potency. While prescription opioids are effective treatments for moderate-to-severe pain, the abuse of such opioids is a significant public health issue according to the Centers for Disease Control and Prevention.

“We are pleased to finalize the License Agreement for the out-licensing of the SCI-160 program for treating pain. The License Agreement may allow us to enjoy royalties and milestones payments from the SCI-160 program, without investing additional funds in the development.” said Oz Adler, SciSparc's Chief Executive Officer.

Mr. Oz Adler, SciSparc’s Chief Executive Officer and Chief Financial Officer, is a member of the board of directors of Polyrizon.

About SciSparc Ltd. (Nasdaq: SPRC):

SciSparc Ltd. is a specialty clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists. SciSparc’s focus is on creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the Company is currently engaged in the following drug development programs based on THC and/or non-psychoactive cannabidiol: SCI-110 for the treatment of Tourette Syndrome, for the treatment of Alzheimer's disease and agitation; SCI-160 for the treatment of pain; and SCI-210 for the treatment of autism and status epilepticus. The Company also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seeds’ oil-based products on the Amazon.com Marketplace.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. For example, SciSparc is using forward-looking statements when it discusses the potential of receiving royalties and development milestone fees  and that the License Agreement may enable the Company to enjoy royalies and milestones payments from the SCI-160 program, without investing additional funds in the development. The Company may not receive any royalties or milestone fees as a result of the License Agreement. Since such statements deal with future events and are based on SciSparc’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of SciSparc could differ materially from those described in or implied by the statements in this press release. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including those discussed under the heading "Risk Factors" in SciSparc's Annual Report on Form 20-F filed with the SEC on April 1, 2024, and in subsequent filings with the U.S. Securities and Exchange Commission. Except as otherwise required by law, SciSparc disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date they were made, whether as a result of new information, future events or circumstances or otherwise.

Investor Contact:
IR@scisparc.com
Tel: +972-3-6167055

FAQ

What is the value of SciSparc's (SPRC) out-licensing agreement for SCI-160?

The out-licensing agreement for SciSparc's (SPRC) SCI-160 program is valued at $3 million in Polyrizon securities, with potential additional milestone fees of $3 million in cash and royalties.

What is SciSparc's (SPRC) SCI-160 program designed to treat?

SciSparc's (SPRC) SCI-160 program is designed to treat pain. It is a proprietary synthetic combination of cannabinoids and N-acylethanolamines that has shown promising analgesic effects in pre-clinical studies.

How does SciSparc's (SPRC) SCI-160 compare to morphine in pain treatment?

In pre-clinical studies, SciSparc's (SPRC) SCI-160 was found to have a comparable analgesic effect to high-dose morphine, and in some instances, it exerted even greater potency without causing significant side effects.

What are the potential benefits for SciSparc (SPRC) from this licensing agreement?

SciSparc (SPRC) may benefit from royalties and milestone payments from the SCI-160 program without investing additional funds in its development, potentially generating revenue while minimizing further investment risks.