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LGC Capital to Acquire a Stake in Italian Pharmaceutical Firm Freia Farmaceutici
Wednesday 22 May 2019

22 May 2019 - Canadian investor LGC Capital Ltd. (TSX Venture: LG) (OTC-QB: LGGCF) has entered into an investment agreement to acquire a 35% equity interest in the hemp-focused Italian pharmaceutical company, Freia Farmaceutici Srl, the firm said.

Freia was established in 2009 and is currently the only company in Italy, and one of the few in Europe, to have developed and marketed hemp-based pharmaceutical products authorised by the Italian Ministry of Health.

Freia currently owns two patents, has filed five patent applications, and is in the process of completing six additional applications.

Currently Freia has six registered pharmaceutical drug products in the market intended for patients on radio and chemotherapy treatment, suffering from atopic dermatitis and psoriasis, and from dysmetabolism (hypercholesterolemia, diabetes and endocrine dysfunction).

Freia's product pipeline includes six products already authorized in the nutrition and topical fields, eight further products have been authorised in the gynecological field and are to be launched in 2019, another nine products are awaiting authorisation and 12 products are in the development stage in the areas of gastroenterology and nutrition.

A special research project also involves an application for use in the treatment of multiple sclerosis. Since its establishment the company has been conducting several clinical Trials in the above therapeutic areas.

Since June 2014, Freia has conducted market tests in Italy through medical information activities (multi-mandated agents) to validate the true value of the products and their therapeutic potential.

Financial performance: In 2017 Freia achieved sales of CDN 740k and EBITDA of CDN 265k (36% EBITDA margin) which was achieved with an initial suite of authorized drugs in the market.

In 2018, with the addition of further authorized drugs to Freia's portfolio, sales levels increased by 74% to CDN 1.29m and EBITDA grew to CDN 280k (22% EBITDA margin).

In 2019, Freia will be focusing on expanding its business nationally and internationally through the sales of increased volumes of existing drugs and the roll out of a further eight authorized drugs into the market.

LGC and Freia's existing shareholders have entered into an investment agreement whereby LGC will acquire a 35% equity interest in Freia for a total cash consideration of CDN 4,847,033 (USD 3.61m), to be paid in three installments over the course of ten months.

The investment agreement contains standard representations, warranties and covenants of the parties, and closing of the transaction is subject to standard closing conditions and final acceptance by the TSX Venture Exchange.

LGC has also appointed members to Freia's board of directors.

LGC Capital is a cannabis investment firm with a focus on the legal global cannabis market.

Through its portfolio of investment companies, LGC is building a transversal integrated organisation of interconnected legal cannabis companies with cultivation, processing and distribution in Australia, Jamaica, Switzerland, Italy, and Canada serving domestic and export markets.
Date Published: 22/05/2019
Target: Freia Farmaceutici Srl/35% stake
Country: Italy
Deal Size: 3.61m (USD)
Sector: Pharmaceuticals
Type: Stakebuilding
Financing: Cash
Status: Agreed
Buyer: LGC Capital Ltd