PharmAla Biotech Holdings Inc., a biotechnology company, announced that it has entered into a term sheet under which PharmAla would grant Jupiter Neurosciences, Inc. (JUNS) exclusive, perpetual United States licensing rights to ALA-002, a PharmAla's patented, non-racemic MDMA formulation.
The proposed transaction exceeds $100 million and comprises upfront consideration, development milestone payments, and single-digit royalties on net sales. Closing of the definitive agreement is expected within 90 days of the execution of the term sheet, subject to regulatory approvals.
The proposed transaction is intended to give ALA-002 a dedicated U.S. development and commercialisation platform through Jupiter Neurosciences, and it's the CNS-focused team.
Notably, PharmAla would retain all rights to ALA-002 in territories outside of the United States, including its existing commercial presence through its Cortexa joint venture in Australia.
Pursuant to the term Sheet, PharmAla would receive upfront consideration of $3.33 million at closing of the definitive agreement, comprised of $1.50 million in cash and $1.83 million in shares of Jupiter common stock, with such shares subject to a 10-day lock-up period.
Further development milestone payments and royalties will be paid to PharmAla as the product is developed, approved, and commercialised in the United States.
And if the definitive agreement is not executed within 90 days of the signing of the term Sheet, PharmAla shall receive all of the escrowed cash as a reverse termination fee.
JUNS has traded between $0.306 and $3.33 over the last year. The stock closed Tuesday's trade at $0.32.
JUNS is currently trading at $0.36, up 13.84%.
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