Argent BioPharma licences non-core cannabis genetics in global deal

• Argent has signed a 10-year exclusive global licensing agreement with Thai Phytomed International, covering four proprietary cannabis genotypes
• Argent will retain ownership of the genetics and associated IP while receiving a 15% royalty on profits generated from commercialisation
• Deal supports Argent’s strategy to monetise non-core assets while focusing on pharmaceutical development and other key areas

Special Report: Argent BioPharma has signed a 10-year exclusive worldwide licensing agreement with Thai Phytomed International (TPI) for the commercial development of four proprietary cannabis genotypes.

The transaction supports Argent BioPharma’s (ASX:RGT) strategy to unlock value from non-core legacy cannabis assets through capital-efficient licensing arrangements.

It also allows the company to focus scientific and financial resources on pharmaceutical development, immune modulation and anti-inflammatory therapeutics.

Under the agreement, TPI receives exclusive global commercialisation rights covering cultivation, propagation, processing, extraction, manufacturing, marketing, distribution and sales of the licensed genetics and products they derive.

These include cannabis flower, extracts and cannabinoid active pharmaceutical ingredients, subject to applicable regulatory requirements.

The agreement covers four cannabis genotypes developed and maintained by RGT including:

• MXC-THC-10/3;
• MXC-THC-81/5;
• MXC-THC-40/3; and
• MXC-THC-40/2.

The underlying genetics and associated IP remain owned by Argent BioPharma (UK), formerly MGC Pharma (UK), which is wholly owned by RGT.

RGT retains the right to use the licensed genetics for internal pharmaceutical research and development, while TPI receives exclusive commercial rights within the agreed scope for the duration of the agreement.

RGT to receive 15% royalty

RGT will receive a royalty equal to 15% of profits generated from commercialisation, with calculations undertaken quarterly.

The royalty arrangement covers sales conducted directly by TPI, through TPI-controlled operating entities and through permitted sublicensing arrangements.

The agreement has an initial 10-year term, with the option to renew for a further 10 years.

TPI will fund the commercial development of the genetics and be responsible for obtaining and maintaining the regulatory and operational approvals required in each market.

RGT said it may terminate the licence if no commercial sale of licensed products has been made within 24 months after delivery of the licensed genetic material.

Commercialising non-core assets

The transaction follows RGT’s broader strategy of reviewing its historical asset portfolio to identify opportunities to commercialise non-core assets through specialist external partners.

This approach enables the company to retain ownership and long-term economic participation in assets while directing internal scientific and financial resources towards its pharmaceutical development portfolio.

Following the global licensing of CannEpil to NYSE-listed Splash Beverage Group in July, RGT has continued to pursue opportunities to extract value from its legacy cannabis assets through capital-efficient licensing arrangements.

RGT said the board believed the latest agreement provided an opportunity to generate potential future royalty revenue without requiring RGT to fund the commercial development of the licensed genetics.

The structure also preserves the group’s ownership of the IP and its ability to use the genetics for internal pharmaceutical research.

Focus shifts to pharmaceutical development

RGT executive chairman Roby Zomer said the deal was another step towards unlocking value from the company’s historical assets while sharpening its strategic focus.

“These genetics represent intellectual property developed within the group over many years,” Zomer said.

Zomer said rather than continuing to deploy RGT’s capital and operational resources towards their commercial development, the appropriate strategy was to place them with a dedicated commercial partner, while retaining ownership of the underlying assets.

He said RGT could participate in any future success through royalties.

“Importantly, the transaction does not include CannEpil, CimetrA or our pharmaceutical delivery technologies, and we retain the ability to utilise the genetics for internal pharmaceutical research,” he said.

“This structure allows Argent to maintain economic exposure to these legacy assets without diverting resources from our core direction as we increasingly focus on immune modulation, anti-inflammatory therapeutics and proprietary pharmaceutical intellectual property.”

Adding to TPI’s library of products

TPI executive chairman Willy Kruh said the agreement would add the genetics to the company’s library of products supplied to global markets.

“Thai Phytomed International is pleased to be adding these well researched, high value genetics to our library of available, high-quality Thai-grown Medical Cannabis Flower and other products being supplied to global markets,” Kruh said.

“The high THC (38-42% THC) and Balanced Genetics (12-14 % THC/12-14% CBD) both represent existing needs in the market which Thai Phytomed International will be positioned to fulfill via this agreement with Argent.

“We look forward to a long and profitable relationship together as the Global Cannabinoid market further expands and develops.”

This article was developed in collaboration with Argent BioPharma, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Argent BioPharma licences non-core cannabis genetics in global deal appeared first on Stockhead.