Tue, 1st Mar 2022 07:00
Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments
1 March 2022
SEED Innovations Limited ("SEED" or the "Company")
Investee Company Update: Little Green Pharma Ltd
SEED Innovations Ltd, the AIM quoted company investing in fast growing and industry leading businesses with a focus on the medical cannabis, health and wellness space, is pleased to note an announcement released on the ASX by its portfolio company, Little Green Pharma Ltd ('LGP') including its half-year financial report for the period ended 31 December 2021.
SEED owns a holding of 7,324,796 ordinary shares in LGP representing 3.1% of LGP's issued share capital.
Alfredo Pascual, VP of Investment Analysis of SEED, commented: "It is very encouraging to see the progress that LGP has made in its latest reported interim report for the half year ended 31 December 2021, continuing to achieve strong financial growth with revenue reaching A$7.3 million, almost doubling compared to the previous corresponding period.
"We must note the positive operational and research related milestones reported by LGP within this period, including the grant of the first local registration for cannabis medicines in Denmark and most recently being awarded an Italian Government tender to supply cannabis flower into Italy."
"This progress lays the path for further expansion into other territories, as the board of LGP have alluded to, and we believe will further add value to shareholders. We look forward to further developments from the LGP team."
The following extract from the announcement is set out without material changes or adjustments and the announcement in full can be accessed from the link below this section.
"REVIEW OF OPERATIONS
Continuation of early mover strategy into new, under-supplied markets
In line with LGP's global strategy, the reporting period and early 2022 were marked by LGP's continued early penetration into future key markets and jurisdictions with currently highly limited supply options.
During the reporting period and early 2022, LGP was granted the first local registration for cannabis medicines in Denmark, signed an exclusive distribution agreement with PharmaServe Hellas (PharmaServe) for Greece, and was awarded an Italian Government tender to supply cannabis flower into Italy. Each of these territories are distinguished by having only one or two global cannabis suppliers qualified or registered to supply into these markets.
These pathways complement LGP's existing distribution networks and agreements into other, limited-supply territories, including France, where LGP is one of only four qualified suppliers and Poland, where LGP anticipates being one of the first registered products on the market.
Meanwhile, the Company continues to negotiate new pathways for supply from its Danish and Australian facilities with a range of highly prospective UK and EU territories while at the same time growing its brand presence in Germany (through its distribution agreements with AMP Medical Products (AMP) and Demecan GmbH).
These new and existing EU and UK distribution pathways give LGP potential access to a population of over 350 million, representing 68% of the EU and UK population. LGP's ability to rapidly move into new, highly prospective territories represents a continuation of LGP's historical success as an industry first-mover, including as Australia's first local producer of cannabis oil and first exporter of medicinal cannabis products from Australia. LGP believes this strategy and its development of a global, multi-jurisdiction distribution platform will enable both substantial future sales and grow LGP brand recognition in markets for its future registered cannabis medicines.
Record revenue growth
The Company continued to achieve strong growth during the reporting period, with a significant increase in revenue to $7,321,504, up 94% compared to the previous corresponding period (31 December 2020: $3,771,237). Australia In August 2021, the Group completed its ~$5.9 million acquisition of the properties underlying its cultivation and manufacturing facilities in Western Australia, as well as two adjoining properties. Consideration for the acquisition was a cash payment of $4 million with the balance in scrip. Since acquisition the Company has continued its Phase 3 expansion of its manufacturing facilities which are anticipated to be operational in the coming months.
During the reporting period, enrolments for the QUEST Initiative closed with over 3,000 participants, making it the world's largest longitudinal study for medicinal cannabis. Results of this study will be released later this year. With the success of this study, a second QUEST Initiative will be undertaken later this year, which will include both LGP medical cannabis oil and flower products.
In addition, LGP partnered with Curtin University and Professor Marco Falasca to research the efficacy of medicinal cannabis in the treatment of obesity, and the Company's refractory pain study results were also accepted for publication in the peer-reviewed journal, "Medical Cannabis and Cannabinoids", representing successful clinical validation of LGP's Classic 10:10 product. The Company also held a pre-submission meeting with the TGA during which it presented its clinical trial strategy for its Schedule 3 CBD medication. Based on that meeting the Company has a clear understanding of the pathway to product registration.
LGP continued to develop its psychedelics business within its wholly-owned subsidiary Reset Mind Sciences Limited (Reset), with the grant of an endorsement permitting the supply of psilocybin on its Schedule 9 licence, its recruitment of a Non-Executive Chair and Advisory Board for Reset, and its continued development of a research protocol for its proposed clinical trial.
During the half year, LGP's Danish facility commenced delivery of cannabis flower medicine to Australia and, following a robust 2.5-year regulatory process, was also granted a product registration for its Billy Buttons flower medicine as 'Billinol LGP', the first locally registered cannabis medicine in Denmark.
LGP Denmark also received its GMP certificate to provide analytical testing services to third parties. Given the limited number of GMP certified cannabis testing laboratories in Europe LGP has commenced offering testing services to other Danish and European medicinal cannabis producers.
Meanwhile, the Group procured a suite of new cannabis genetic lines for development for both its Western Australian and Danish facilities in order to expand its product offering.
EVENTS SUBSEQUENT TO BALANCE DATE
In addition to its entry into distribution agreements with PharmaServe and AMP, as well as its successful award in an Italian Government tender, on 24 February 2022 the Company signed a ~$3.8 million loan finance facility secured against its Western Australian production facilities, as well as a $2.0 million revolving equipment finance facility from National Australia Bank.
In February 2022, the Company also announced its intention to demerge LGP's psychedelics business as a public unlisted entity rebranded as Reset Mind Sciences Limited and commenced construction of its psilocybin mushroom cultivation facility at LGP's Western Australian production site. Reset continues to finalise the development of psychotherapy protocols for its clinical trial and has received a Federal import permit for the synthetic psilocybin it intends to use in the trial.
On 15 February 2022 the Company also resolved to change its financial year to 1 April to 31 March to align with the current reporting period at the Danish facility and optimise accounting team and consultant availability during the year end process.
On 20 February 2022, 55,534,703 ordinary shares in the Company were also released from ASX escrow.
On 25 February 2022, Angus Caithness (Executive Director) exercised 3.5 million options at $0.30 raising $1.05 million.
The announcement can be viewed in full on LGP's website via the following link: https://investor.littlegreenpharma.com/site/investor-centre/asx-announcements
- Ends -
For further information on the Company please visit www.seedinnovations.co or contact:
Ed McDermott /
Lance de Jersey
SEED Innovations Ltd
James Biddle /Roland Cornish
Beaumont Cornish Limited,
Tel: +44 (0) 207 628 3396
Isabella Pierre /Damon Heath
Shard Capital Partners LLP
Tel: +44 (0)20 7186 9927
Catherine Leftley /Isabelle Morris
St Brides Partners Ltd,
SEED Innovations is an AIM quoted investment company focused primarily on disruptive high growth life sciences and technology businesses particularly within the medical cannabis arena. The Company's strategy is to identify early-stage opportunities that have an upcoming investment catalyst and grow its portfolio in terms of value whilst limiting the number of investee companies to a level where relevant time can be devoted to each.