By GREGORY ZELLER //
And now, onto the science.
Canadian mining exploration company Kitrinor Metals Inc. and Scythian Biosciences Inc., a Calgary-based biotech owned by Great Neck investment banker Jonathan Gilbert, have announced a pair of deals that complete first-round financing for Scythian, which is exploring cannabinoid-based treatments for concussions.
The new deals add on to the $13.08 million (Canadian) in brokered financing, led by Ontario-based Clarus Securities Inc., already raised by Scythian Biosciences, which is financially and scientifically backing a University of Miami study pitting cannabinoid compounds against post-concussion brain cell inflammation and related conditions.
On Friday, Kitrinor Metals and Scythian Biosciences announced the closing of an additional $200,000 (Canadian) in brokered financing through lead agent Clarus Securities and the simultaneous closing of roughly $2.97 million (Canadian) in non-brokered financing – essentially, a private placement – bringing total project financing to date to $16,250,946 (Canadian).
That’s roughly 12.2 million U.S. dollars, more than enough to kick off the five-year study at the University of Miami’s Miller School of Medicine, according to Gilbert. The study – which expands on the science behind two pending patents written by Scythian Biosciences Chief Operating Officer David Schrader – is projected to cost as much as $16 million (U.S.), but Scythian’s chief exec isn’t concerned about making up the difference.
In fact, Scythian Biosciences has already made three payments to the Miller School, where behavioral neuroscientist Gillian Hotz is leading the study. Gilbert wouldn’t say how much money was included in those three payments, only that Hotz’s teams were “off and running.”
“We raised $16 million (Canadian) fairly quickly,” Gilbert told Innovate LI. “We’re certainly going to raise more money over the next year, let alone the next four.”
Not that fundraising will continue to be a major priority at the new Scythian Biosciences, at least not in the short term. Canadian regulatory permissions and other paperwork officially creating the new R&D firm – essentially, Kitrinor Metals is forming a subsidiary that will merge with Gilbert’s company to form a new entity – should be completed in April, and when they are, the main focus will be on science, according to the CEO.
“We won’t be actively seeking additional funding at this time,” Gilbert noted.
But that’s not to say future investments aren’t in the cards. Gilbert, who said he was “grateful” to Clarus Securities and its partner brokerages “for believing in Scythian’s mission,” is confident those backers will double down on their investments when the time is right.
“I’m certainly hopeful that they will come back to the table for Round Two, whether that be six months from now or whenever,” Gilbert noted. “We believe we won’t have to look elsewhere for funding, assuming Scythian executes as we believe it will.”
If it does, the Canadian biotech with the Long Island roots will move rapidly to the forefront of what Gilbert described as “a new slice within biotech,” referencing the development of pharmaceuticals based on cannabidiol, the major non-psychoactive cannabinoid in the marijuana plant.
“This is a very narrow space,” the CEO said. “The cannabidiol-pharma sector within biotech has become very hot and has become a category of its own.”
That narrow space does have its entrenched pioneers, including GW Pharmaceuticals, a British biopharma firm known best for Sativex, a multiple sclerosis treatment made from cannabinoids. The “slice” is also developing a healthy network of investors who are increasingly familiar with the science – including Aphria Inc., a Toronto-based medical marijuana producer and lead Claris Security investor known as a regular backer of early-stage biotechs.
Many of those companies are well ahead of Scythian Biosciences in the cannabinoid race, developmentally speaking. GW Pharmaceuticals, for one, boasts a pipeline filled with experimental cannabinoid-derived compounds beyond Sativex.
Gilbert understands the playing field and the magnitude of the head start enjoyed by some of those rival cannabinoid-focused pharma firms – but he still has big plans for his little Canadian biotech.
“I want to own this space,” he said Friday. “It’s hard to say that with GW Pharma out there, but we have the science, we have the researchers and we have the financial backing to make it happen.”