Scythian, U of M concussion study hits the jack-pot

Heads up: A little Canadian corporate wrangling will pump $10 million into a University of Miami concussion program (with a Long Island link).

A Calgary-based R&D firm with strong Long Island ties has swung an eight-figure financing deal, lighting up a major study pitting cannabinoids against concussions.

Scythian Biosciences Inc. – owned by owned by Great Neck investment banker Jonathan Gilbert, who partners in fitness-nutrition enterprise Decision Nutrition with his wife, Keren Gilbert, among other ventures – and the University of Miami stand ready with a planned five-year, $16 million study of cannabinoid-based methods for reducing post-concussion brain cell inflammation, which causes headaches and more serious neurological complications.

The holdup, of course, has been the 16 mill.

Yes, they cannabinoid: Pot pioneers Gillian Hotz and Jonathan Gilbert are ready to roll.

But this week, Canadian mining exploration company Kitrinor Metals Inc. announced a “reverse takeover transaction” involving Scythian Biosciences and a $10 million “strategic lead investment” by Toronto-based medical marijuana producer Aphria Inc., kick-starting the study by the University of Miami’s Miller School of Medicine.

Before the deal is finalized – among other things, it needs the approval of TSX Venture Exchange, a Canadian stock exchange – Scythian Biosciences is expected to complete a 4-for-1 consolidation of issued and outstanding common shares.

According to a statement from Kitrinor Metals, the plan is for Kitrinor to form a subsidiary that merges with Scythian Biosciences to form a new entity. The TSX Venture Exchange approval essentially allows the stock market to list the new entity’s shares.

The companies plan to close the deal by the end of May, according to Kitrinor Metals.

Stock consolidations and other paperwork aside, it appears the concussion study is a go – important not only for the science and its ultimate effect on the nation’s serious concussion problem, but to the multi-year project’s chances of landing the rest of its funding.

That should be a little easier now, according to Gilbert, who believes the Aphria stake will open the funding floodgates for the high-profile cannabinoid study. Not only can that seed funding be “over-subscribed” – that is, Aphria can always raise its bet – but as the $16 million program evolves, Gilbert said, it will quickly attract new backers.

“As we go past certain levels in the clinical trials, we will be able to raise money at a better valuation,” he told Innovate LI. “Next year, or two years from now, when we’re further along in the process, we’ll go out and raise $40 million or $50 million.

“Or we may buy up another company.”

That’s putting the cart slightly before the horse, of course. For now, the focus is on funneling that first $10 million tranche into the University of Miami study, which will expand on the science behind two pending patents written by Scythian Biosciences Chief Operating Officer David Schrader, a corporate attorney with a biochemistry degree from Johns Hopkins University.

The science, and the patents, involve a proprietary compound that combines CBD, a cannabinoid derivative of hemp, with a chemical that disrupts nerve-cell receptors.

Nationally recognized behavioral neuroscientist Gillian Hotz is leading the University of Miami study. An expert in neurotrauma, concussion management and neurorehabilitation, Hotz has been the co-director of the Miller School’s Concussion Program since 1995.

She’s a major-league manager for a slugging science with all-world potential, according to Gilbert, who renamed his Canadian R&D firm for the Fourth Century BC Iranian/Eurasian nomadic tribe believed to be the first cannabis users, after launching in 2014 as Valens Agritech Canada.

Hotz is also further cause, he added, for everyone involved to feel confident about the enterprise’s financial future. Not only is the study stretched comfortably over five years – “We don’t need the rest of the money today,” Gilbert noted – but there’s always Schrader’s second pending patent, which covers the cannabinoid compound’s potential uses for gastrointestinal disorders.

“I expect more funding will come in,” Gilbert said. “This may be one of many drugs we develop. We can seriously go out and raise $50 million in the future, and I have no problem saying that.”

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