CAMBRIDGE, Mass. - Enveric Biosciences (NASDAQ: ENVB), a biotech company focusing on neuroplasticity-based treatments, announced a non-binding term sheet to out-license its Novel Psilocin Prodrugs (NPP) to MindBio Therapeutics (CNSX: MBIO). The agreement, once finalized, will grant MindBio an exclusive global license to develop and commercialize these compounds for neuropsychiatric conditions such as depression.
Enveric's NPP molecules are engineered to release therapeutic levels of psilocin, the active metabolite of psilocybin, with a reduced risk of hallucinogenic effects. The company holds a U.S. patent and has several pending applications for its library of NPP compounds, which exhibit properties like enhanced gastrointestinal stability and increased absorption.
MindBio, a clinical stage biopharma company based in Vancouver, intends to progress one of the NPP drug candidates into clinical trials. The terms of the agreement include development and sales milestones payments to Enveric, potentially totaling $66.5 million, along with royalties on future sales ranging from 2.5% to 10%.
Joseph Tucker, Ph.D., CEO of Enveric, expressed optimism about the partnership, highlighting the combined efforts to leverage psychedelic-based compounds for targeting brain signaling pathways. MindBio's CEO, Justin Hanka, echoed this sentiment, emphasizing the alignment with their strategy to develop finely-tuned formulations and dosing strategies.
This collaboration comes as both companies are actively involved in the development of treatments for mental health disorders. Enveric's lead program, EB-003, aims to promote neuroplasticity without inducing hallucinations, while MindBio is conducting clinical trials with microdoses of psychedelic medicines, including a proprietary form of LSD.
This report is based on a press release statement from Enveric Biosciences.
InvestingPro Insights
As Enveric Biosciences (NASDAQ: ENVB) forges a promising partnership with MindBio Therapeutics, investors are closely monitoring the company's financial health and market performance. According to real-time data from InvestingPro, Enveric's Market Cap stands at a modest 6.13M USD, reflecting the size of the company within the biotech industry. The company's Price / Book ratio, as of the last twelve months ending Q4 2023, is reported at 3.14, providing an insight into how the market values the company's net assets. However, it's important to note the company's Operating Income shows a significant loss of -16.45M USD in the same period, underscoring the financial challenges it faces.
InvestingPro Tips highlight several critical aspects for potential investors. Enveric holds more cash than debt on its balance sheet, which can be a positive sign of financial stability. However, analysts have raised concerns about the company's cash burn rate, indicating that Enveric is quickly using up its cash reserves. This is a crucial factor to consider, especially for a biotech company with long development cycles and uncertain revenue streams. Moreover, analysts have revised their earnings upwards for the upcoming period, suggesting a potential improvement in the company's financial outlook.
For those considering investment in Enveric, it's worth noting that the company has not been profitable over the last twelve months and does not pay a dividend to shareholders. The stock has also fared poorly over the last month, with a price total return of -16.77%. Given these factors, investors may seek further insights and tips from InvestingPro, which lists additional tips for Enveric. Using the coupon code PRONEWS24, users can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights.
The partnership with MindBio could be a turning point for Enveric, and with the next earnings date on May 14, 2024, investors will be watching closely. The InvestingPro platform offers a comprehensive analysis of Enveric, including a fair value estimate of 1.37 USD, which could be instrumental for those looking to make an informed decision.
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