MGC Pharma scores new trial approval from major Israeli hospital for COVID-19 treatment
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Medicinal cannabis company MGC Pharma (ASX:MXC) is staying busy during the pandemic, after getting ethics approval from a second hospital in Israel to run a phase II clinical trial on COVID-19 patients.
The company also announced firm commitments for a new $3.5m share placement to institutional and sophisticated investors. MGC will issue around 129.6 million new fully paid ordinary shares priced at 2.7c per share.
The additional trial is for MGC’s natural treatment that targets viral infections with inflammatory symptoms.
The company has manufacturing and distribution rights for the product after signing a deal with the developer, Swiss-based Micelle Technology.
Following news of the trial announcement, MGC shares ticked higher and a short time ago were up 3.4 per cent at 3c per share.
Speaking with Stockhead, MGC Pharma executive chairman Brett Mitchell said the second approval was evidence of strong “validation and endorsement” from medical professionals. Hillel Yaffe is a major coastal hospital serving around 400,000 residents.
“We’ve effectively gone from a standing start to having product approval, then ethics approval for a clinical trial, in the space of around three months,” Mitchell said.
“Usually that process takes over a year. So I think the increased level of engagement demonstrates the interest and support from Israel’s medical community.”
The treatment has been approved as a “special clinical trial” by Israeli health authorities, which allows MGC to fast-track the process without requiring final approval from the Israeli Ministry of Health. It’s expected to commence in September, with results available in October.
The second trial at Hillel Yaffe will evaluate the safety and efficacy of the product to treat patients diagnosed with COVID-19.
MGC will also use the trial to test the claims of the product as an effective food supplement, and extract the necessary data required to achieve full marketing authorisation.
Accompanying the announcement, MGC announced firm commitments from new and exisiting institutional and sophisticated investors for a $3.5m share placement.
Mitchell said the raise would leave the company in a “strong financial position, firstly to complete these trials”.
“If successful, we’ll then have the resources to drive distribution and commence selling the product as a food supplement for commercial orders,” he said.
The capital raise also provides the company with financial flexibility to maintain production and sales for its existing range of phyto-cannabinoid products.
The funding round was led by a cornerstone investment from Merchant Opportunities Fund, with Canaccord Genuity acting as lead manager.