Enveric Biosciences (NASDAQ: ENVB) (“Enveric” or the “Company”), a patient-first biotechnology company developing novel therapeutic drugs to improve the quality of life for cancer patients, Chief Executive Officer, David Johnson, today is issuing an open letter to shareholders.
Dear Fellow Shareholders:
As we approach our annual stockholder meeting on September 14, 2021 and the expected closing of the transaction with MagicMed Industries Inc. (“MagicMed”), we believe we are well-positioned to emerge as a next-generation neuroscience platform. We expect the pending transaction to complement our existing product development activities, which are focused on physical symptoms, with a platform of novel, psychedelics that addresses the large mental health challenges related to CNS indications such as PTSD, anxiety, depression and pain.
We filed our second quarter and first half of 2021 financials last Friday with the SEC, which demonstrates our strong balance sheet of approximately $20 million in cash, no debt and an efficient capital table, affording us the flexibility to be opportunistic about further M&A possibilities and in executing on our current business plan.
We also increased R&D spend during the first half of 2021 and, after the proposed transaction with MagicMed, plan on further investments in mental health initiatives with potential for true disruption in this patient care segment, solidifying our unique position as one of the few NASDAQ-listed mental health companies.
We recognize that the public markets have been difficult for microcap companies in this space for the past several months, and remain committed to executing on our business plan to maximize shareholder value moving forward.
Acquisition of MagicMed
To date, Enveric’s focus has been in the discovery and development of cannabinoid-based therapeutic drugs for patients who suffer from the side effects of cancer therapy. Indications such as Radiation Induced Dermatitis and Chemotherapy Induced Peripheral Neuropathy represent a very large market opportunity and the current standard of care has seen minimal clinical innovation.
Our development activities, however, revealed an even larger opportunity related to a side effect in cancer therapy known as ‘Cancer Related Distress’ (CRD) derived from anxiety, depression and PTSD arising from the diagnosis, treatment protocol or a patient’s concerns about the future. While working to address the physical issues associated with cancer therapy, as a patient-centric company, it became evident that patients also had significant struggles with the mental aspect of their diagnosis. Scientific evidence published by leading academic institutions such as John Hopkins and Yale show the promise of psychedelic molecules as an effective and exciting approach in treating mental health. The FDA’s approval of Janssen’s SPRAVATO® (eskatamine) and its designation of “Breakthrough Therapy” for a Psilocybin and MDMA, further bolsters this published research.
It was with this lens that we started looking for the right partner to enter this space. We have been excited about MagicMed since we first met them. Their library of Intellectual Property for Generation 3molecules, together with their use of Artificial Intelligence, we believe will allow the combined company to address many of the issues not only within our desired cancer indications, but well beyond in this extensive arena of societal mental health problems. In fact, we now believe there is a potential to disrupt the entire market through our IP strategy, which is a very exciting proposition for patients and our shareholders alike.
Dr. Joseph Tucker, current CEO of MagicMed and incoming CEO of Enveric upon the expected closing, and I agree, quite passionately, that mental health is a major global crisis with inadequate current therapies. With a market estimated at more than $250 billion in North America alone, the combined company will be uniquely positioned to bring significant value in the form of efficacious, reliable, life-changing therapies for the patients we seek to serve.
The proposed transaction with MagicMed has now cleared the regulatory approvals and is currently awaiting a shareholder vote of both Enveric and MagicMed shareholders on matters related to the proposed transaction. We expect the proposed transaction to close late in the third quarter or very early in the fourth quarter.
Other key points of progress
Building a World Class Team
To support our growing business, Enveric and MagicMed plan to come together with a very deep and experienced leadership team, while continuously looking for further enhancements. In the second quarter, we announced that Carter Ward had joined the company as our CFO. Carter comes to Enveric with years of Public Company experience in the Life Sciences space, as well as a KPMG pedigree.
To support our growing R&D capabilities and team, we have leased a new discovery facility at the University of Calgary, increasing the efficiency and focus of our R&D activities. In addition, we have just agreed to double our team in Calgary to allow them to accelerate our ability to synthesize and screen more drug candidates.
Finally, we have brought in other new skill sets in Project Management, Clinical Research and a new Scientific Advisory Board Member, Dr. Arash from Cedar Sinai Hospital in Los Angeles
Progressing our Pipeline
- EV101 has now been given approval for a Phase 1/2 trial in Tel Aviv. We will continue to look at the best pathway forward for this initiative.
- EV102 continues to make progress in our development program and still shows signs that this could be in the clinic in the first half of 2022.
- EV104 is a discovery stage program for Pain, creating a Proof of Principal on the Diverse Bio Assets we licensed in Q1 of 2021.
Expansion of Intellectual Property
Enveric Biosciences was granted US patent number 11,090,275 on August 17th. This US patent is the first of three pending patent portfolios directed to cancer treatment using cannabidiol (CBD) owned by Enveric. This patent is part of a larger strategy to build a large and strong Patent portfolio. It is an exciting milestone for the company.
Outlook of Combined Company
The combination of Enveric and MagicMed is expected to uniquely and immediately propel us to emerge as a powerful drug discovery and clinical stage mental health biotechnology company, bringing forward novel therapies to improve the standard of care and unmet medical needs globally.
Our focus is very clear:
- Continue to progress our pipeline into and through the clinic
- Close the MagicMed Industries transaction and start to utilize their Psybrary to protect, expand and develop new psychedelic drug candidates, starting with PTSD for cancer
- Opportunistically look for external development ways to add value to Enveric
I want to thank our shareholders for their support as we approach our September 14th stockholder meeting. As always, we look forward to hearing from you. Please email our investor relations department for more information – [email protected].
Chairman and CEO