Tetra Bio-Pharma and Cannvalate Enter Into Partnership

Published: May 6, 2022

Tetra Bio-Pharma and Cannvalate Enter Into Partnership

Tetra Bio-Pharma Inc., a leader in cannabinoid-derived drug discovery and development, today announced it has entered into a research and development agreement with Cannvalate Pty Ltd. for the initiation of the REBORN®, PLENITUDE® and CAUMZ® clinical trials in Australia, and a subscription agreement contemplating a private placement of common shares in the capital of the Company (the “Common Shares“) with Cannvalate for aggregate proceeds to the Company of up to CAD$7,500,000.

The Company has also appointed Dr. Sud Agarwal as a Special Advisor to the CEO and the board of directors with a mandate to advise on strategic aspects of the Company’s activities and to aid in the advancement of our key programs: QIXLEEF™ and CAUMZ™.

Partnership with Cannvalate
Tetra has entered into a research agreement with Cannvalate for the performance of clinical trials of Tetra’s drug candidates in Australia. Cannvalate is a medical cannabis company bringing in safe and effective cannabinoid-based products to the Australian market. Cannvalate’s wholly owned entity, iNGENū, is one of the largest global CROs specializing in cannabinoid clinical trials. By conducting Tetra’s clinical trial activities in Australia with iNGENū, it will allow the Company to benefit from a 43.5% tax credit on all money spent on clinical trials in Australia, and an increased access to patients seeking participation in trials where the pharmaceutical cannabis drug is provided at no cost. Through the Cannvalate partnership, Tetra aims to efficiently assess the clinical viability of its drug products, as well as any new products developed.

Dr. Guy Chamberland, CEO and CRO of Tetra stated, “We have been developing inhaled cannabinoid drugs since 2016 and have a wealth of data to support the potential development of a new generation of drugs to help patients suffering from chronic diseases.  It takes years of research and development to have a drug in two Phase 2 trials designed to support drug approval in the USA and Europe. Finding ways to accelerate timelines while reducing the monthly burn is a continuous battle for all biotechnology companies.  This partnership is intended to allow Tetra to achieve both goals.”

Private Placement
Cannvalate also agreed to acquire Common Shares of Tetra on a private placement basis, through seven (7) distinct tranches, for aggregate proceeds of CAD$7,500,000. The first tranche providing for the issuance of Common Shares having an aggregate subscription price of CAD$500,000 was triggered by the signing of the subscription agreement, whereas the subsequent tranches of the Private Placement will be triggered by the completion of various operational events in connection with the REBORN®, PLENITUDE® and CAUMZ® clinical trials, such as the achievement of first patient enrolments in each such trial. The Company intends to use the proceeds of the Private Placement to fund its clinical trials and R&D activities in collaboration with Cannvalate and iNGENū.

The subscription price per Common Share issuable under the first tranche will be at a discount of 7% to the 5-day VWAP of the Common Shares on the Toronto Stock Exchange (“TSX“) on the day of execution of the subscription agreement with respect to the Private Placement. Subject to compliance with the rules and regulations of the TSX, the subscription price per Common Share issuable under the second and third tranches will be at a discount of 7%, whereas the subscription price per Common Share issuable under the fourth to seventh tranches will be at a discount of 20%, in each case based on to the 5-day VWAP of the Common Shares on the TSX prior to the date of the issuance of the respective tranche. In accordance with the terms of the Private Placement, the subscription price per Common Share shall be adjusted upwards to ensure that Cannvalate and its affiliates shall not beneficially own, or have control or direction over, Common Shares in excess of 19.99% of the number of Common Shares issued and outstanding immediately after giving effect to the issuance of Common Shares issuable under the applicable tranche.

Upon completion of the fifth tranche of the Private Placement which will result in the Company having received aggregate proceeds of CAD$4,500,000, the Company will enter into a nomination right agreement with Cannvalate providing for the grant of a seat on Tetra’s board of directors to Dr. Sud Agarwal for so long as Cannvalate owns or exercises control or direction, directly or indirectly, over 10% or more of the issued and outstanding Common Shares.  Guy Chamberland, CEO and CRO of Tetra stated, “Dr. Agarwal will bring both inhalation clinical expertise and cannabinoid drug development experience to Tetra’s board.  His addition will further strengthen our board as we continue to evolve into a cannabinoid pharmaceutical company.”

About Dr. Sud Agarwal BSc, MB ChB, FANZCA
Dr. Sud Agarwal is the Co-Founder and CEO of Cannvalate and iNGENū, a globally renowned contract research organisation in the cannabinoid space. Dr. Agarwal is an internationally recognised key opinion leader in the clinical use of medicinal cannabis and is regularly invited as a keynote to key industry and pharmaceutical events. His research interests include synthetic cannabinoid drug development, novel inhalational cannabinoids drug-device combinations and cannabinomimetic analogues.

About Tetra Bio-Pharma
Tetra Bio-Pharma  is a leader in cannabinoid-derived drug discovery and development with a FDA and a Health Canada cleared clinical program aimed at bringing novel prescription drugs and treatments to patients and their healthcare providers. Their evidence-based scientific approach has enabled them to develop a pipeline of cannabinoid-based drug products for a range of medical conditions, including pain, inflammation, and oncology. With patients at the core of what they do, Tetra Bio-Pharma is focused on providing rigorous scientific validation and safety data required for inclusion into the existing biopharma industry by regulators, physicians, and insurance companies. For more information visit: www.tetrabiopharma.com

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