Celadon Pharmaceuticals PLC (AIM: CEL) saw its value more than double following a supply agreement that will help it fulfil a German medical cannabis contract signed over a year ago.
This supply deal arrives at a critical time for the AIM-listed biotech, which had previously announced in January that its cash runway would only extend until March.
Under the new terms, Danish partner Valeos will provide Celadon with up to three tonnes of annual cultivation capacity, allowing the company to ramp up the production of pharmaceutical-grade, EU-GMP cannabis Active Pharmaceutical Ingredient (API) products.
Notably, the German contract is anticipated to generate up to £26 million in revenue over three years, with an estimated £8.7 million per annum. Furthermore, the company has already issued an initial invoice to Valeos, and regular revenue is expected to follow as the Danish partner expands its facility utilizing Celadon’s genetics and intellectual property.
James Short, Chief Executive Officer of Celadon Pharmaceuticals Plc, commented:
“This is a pivotal moment for Celadon as we see the early results of our collaboration with Valeos come to life. By leveraging Valeos’ cultivation capacity and our proprietary genetics and IP, we will be able to expedite supply to our existing customers, including our key German contract, while simultaneously creating a new revenue stream for the Company.
The successful initiation of this agreement highlights the effectiveness of our strategic approach, using partnerships to expand our production capacity. We look forward to strengthening our collaboration with Valeos and exploring further opportunities to meet the growing demand for high-THC medicinal cannabis across Europe.”
