ASX-listed MGC Pharmaceuticals has completed the acquisition of Czech-based medical cannabis company Panax Pharma, enabling MGC to significantly scale up its research into medical marijuana at world-leading European facilities.
MGC said it had settled on a binding heads of agreement to acquire up to 100 per cent equity in Panax following due diligence on the acquisition and the finalisation of a research deal with the Czech Republic’s Institute of Experimental Botany of Academy of Sciences known as “IEBAS”.
In an update to the market on Tuesday, the Perth-based company said the next step following the acquisition would be to work collaboratively with Panax executives to develop a medical cannabis genetics and breeding program.
One of the major upsides for MGC from the deal is that Panax, a well connected player in the Czech Republic’s medicinal cannabis industry, holds research access rights to IEBAS, which has a cannabis breeding licence from the Ministry of Health in the Czech Republic. As a result of the acquisition, MGC can access IEBAS’ world renowned medical cannabis research facilities in Prague.
Specifically, the links between IEBAS and Panax mean that MGC will be able to conduct medical cannabis breeding research at IEBAS’s labs and scale up to 1,000m2 of greenhouse growing space, with ability for further scale up if needed.
MGC co-founder and managing director Nativ Segev said: “We are pleased to announce that our acquisition of Panax is complete. MGC Pharmaceuticals will now immediately commence its research operations at the world-class Institute of Experimental Botany of Academy of Sciences of the Czech Republic. ”
Under the acquisition deal, 25 per cent equity in Panax was immediately issued to MGC while a further 55 per cent equity was issued for MGC’s commitment to fund operating costs for the next 12 months, capped at €700,000.
MGC has an option to acquire the final 20 per cent equity in Panax by issuing €600,000 worth of MGC shares.
MGC is confident the deal will strengthen its medical research program that is being developed alongside its cannabis-based cosmetic and dermatological lines targeted at the booming global market for marijuana-derived products.
The company has already achieved European and US revenue flows from its cosmetic lines and last month it moved closer to commercialising its dermatological offering with human clinical trials commencing in Slovenia.
By Matt Birney
