The Medlab Clinical Ltd (ASX: MDC) share price is on the rise in mid-afternoon trade. This comes after the company announced an agreement with Australia's largest generic and over the counter pharmaceutical company, Arrotex.
Consequently, at the time of writing, the Medlab share price is fetching 34 cents apiece, up 3.08%.
Below, we take a closer look at the deal between Medlab and Arrotex.
Medlab shares are in the green today after reporting an important agreement that will unlock new opportunities for the company.
According to its release, Medlab advised it has entered an exclusive non-binding Heads of Agreement (HoA) with Arrotex.
Under the deal, Arrotex will assist Medlab in accelerating its cannabinoid formulation NanoCBD for development and distribution to Australian pharmacies. This will include fast-tracking its final application with the Therapeutic Goods Administration (TGA). Medlab hopes to position NanoCBD for pharmacist only medicines schedule (S3).
Interestingly, the HoA is the first time a pharma and biotech have formed a partnership to explore medical cannabis prospects in Australia.
The contract, which will include commercial terms, is expected to be finalised before 1 July 2021.
What did management say?
Medlab CEO Dr. Sean Hall hailed the new agreement, saying:
This is a major milestone for both the Australian market and the budding partnership between Medlab and Arrotex. Unlike many CBD producers, Medlab can deliver to the pharmaceutical standards required for TGA approval and this partnership will now enable direct application into clinical practice through Arrotex's extensive network. There is a clear alignment within both companies to deliver a superior, approved CBD product to Australian patients.
Dr. Hall went on to speak about the company's novel medicinal candidate, NanoCBD. He added:
A key differentiator of NanoCBD is the proprietary delivery platform NanoCelle that provides faster and more effective absorption of active ingredients into the bloodstream, without the need for needles or pills. It is a commercially viable platform that offer unique opportunities for partnering with some of the biggest players in the pharma industry.
How has the Medlab share price performed?
Shares in Medlab have been on a rollercoaster ride over the past 12 months, riding on volatile swings. Despite the company's shares being up a mediocre 11% since this time last year, Medlab has mostly recovered compared to its pre-COVID highs.