SciSparc Grants Global Rights for Pain Therapy to Biotech Company in Agreement Worth up to $6 Million

Rhea-AI Summary

SciSparc (Nasdaq: SPRC) has finalized an Exclusive Patent License Agreement with Polyrizon for the out-licensing of its SCI-160 program for pain treatment. The deal is worth up to $6 million, including:

• $3 million in Polyrizon securities
• Potential milestone fees of approximately $3 million in cash
• Royalties

SCI-160 is a 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 development could potentially address the public health issue of opioid abuse in pain management.

Positive

• Exclusive global license agreement worth up to $6 million
• Potential for $3 million in Polyrizon securities and $3 million in cash milestone fees
• Additional revenue stream through royalties
• SCI-160 showed analgesic effects comparable to high-dose morphine in pre-clinical studies
• Potential solution to opioid abuse in pain management

Negative

• Milestone fees are contingent on meeting certain development milestones
• CEO's position on Polyrizon's board may present a conflict of interest

Insights

Financial Analyst

This licensing deal marks a significant milestone for SciSparc, potentially worth up to $6 million. The agreement's structure, combining $3 million in Polyrizon securities and up to $3 million in cash milestones, offers a balanced approach to value realization. The inclusion of royalties adds an ongoing revenue stream, which could prove lucrative if SCI-160 gains market traction. However, investors should note that milestone payments are contingent on development progress, introducing an element of uncertainty. The deal's value relative to SciSparc's market cap and cash position will be important in assessing its impact on the company's financial health. While this agreement potentially strengthens SciSparc's balance sheet, the true value hinges on Polyrizon's ability to successfully develop and commercialize SCI-160.

Medical Research Analyst

SciSparc's out-licensing of SCI-160 for pain treatment is a noteworthy development in the quest for non-opioid pain therapies. The combination of cannabinoids and N-acylethanolamines presents an innovative approach to pain management. Pre-clinical studies suggesting comparable efficacy to high-dose morphine without significant side effects are particularly promising. If these results translate to human trials, SCI-160 could address the critical need for effective pain treatments with reduced abuse potential. However, it's important to note that many promising pre-clinical candidates fail in later-stage trials. The transition from animal studies to human trials will be a critical juncture for SCI-160's development. Investors should closely monitor upcoming clinical trial results to gauge the therapy's true potential in addressing the opioid crisis.

Legal Expert

The Exclusive Patent License Agreement between SciSparc and Polyrizon raises some governance concerns that investors should be aware of. The disclosure that SciSparc's CEO, Mr. Oz Adler, is also a board member of Polyrizon presents a potential conflict of interest. While not necessarily improper, this relationship demands heightened scrutiny to ensure the deal terms are truly arm's length and in the best interest of SciSparc shareholders. Investors should seek clarity on whether Mr. Adler recused himself from negotiations and decision-making processes related to this agreement. Additionally, the structure of the deal, particularly the equity component, warrants careful examination. The $3 million in Polyrizon securities introduces an element of risk, as their value could fluctuate based on Polyrizon's performance and market conditions. Shareholders should request detailed information on the valuation methodology used for these securities.

SciSparc would be entitled to receive consideration valued at $3 million in Polyrizon securities, as well as potential milestone fees of approximately $3 million in cash

TEL AVIV, Israel, Aug. 28, 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 finalized 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.

As announced on August 15, 2024, Polyrizon will receive exclusive, royalty-bearing global license to develop and sublicense the Assets. In exchange, SciSparc would be entitled to receive consideration valued at $3 million in Polyrizon securities, 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, abuse of such opioids is a significant public health issue according to the Centers for Disease Control and Prevention.

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. 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) licensing agreement with Polyrizon?

The licensing agreement between SciSparc (SPRC) and Polyrizon is worth up to $6 million, including $3 million in Polyrizon securities, potential milestone fees of approximately $3 million in cash, and royalties.

What is SCI-160 and how does it compare to morphine in pain treatment?

SCI-160 is a synthetic combination of cannabinoids and N-acylethanolamines developed by SciSparc for pain treatment. In pre-clinical studies, it showed analgesic effects comparable to high-dose morphine without significant side effects.

How might SciSparc's (SPRC) SCI-160 program address the opioid abuse issue?

SciSparc's SCI-160 program could potentially address the opioid abuse issue by providing an alternative pain treatment that is effective and well-tolerated without the significant side effects and abuse potential associated with prescription opioids.

What rights does Polyrizon receive under the license agreement with SciSparc (SPRC)?

Polyrizon receives an exclusive, royalty-bearing global license to develop and sublicense SciSparc's (SPRC) SCI-160 program assets for the treatment of pain.