The MGC Pharmaceuticals Ltd (ASX: MXC) share price has bolted more than 40% higher in morning trade today.
Investors are bidding shares in the pharmaceutical company higher after it released an announcement earlier today. At the time of writing, MGC shares are swapping hands for 5.5 cents, up 41%.
Let's take a look at what MGC Pharmaceuticals announced.
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MGC Pharma share price bolts on US supply agreement
Earlier today, MGC Pharma informed shareholders the company has entered a binding, 3-year US supply and distribution agreement.
The agreement with US-based company, AMC Holdings Inc (AMC), includes a minimum supply order of US$24million.
A range of MGC's phytomedicine products is included in the agreement, namely; CannEpil, CogniCann, and CimetrA.
Under the agreement, AMC will act as a licenced distributor and undertake all marketing activities in the US. In addition, the company will also manage the importing and warehousing of MGC Pharma's products.
In addition to supply, AMC will also be responsible for coordinating relevant clinical trial processes for MGC Pharma's products.
The agreement also outlines a minimum US$3 million of sales in Year 1.
Additionally, MGC Pharma can terminate the agreement if AMC fails to secure regulatory approval for at least 1 of the listed MGC products by 30 September 2021.
What did management say?
MGC Pharmaceuticals' management highlighted the importance of the company's milestone of expanding into the US.
Co-founder and managing director Roby Zomer commented:
This is an important milestone agreement for MGC Pharma, as it provides MGC access to the largest healthcare market in the world. We look forward to working with our new partners at AMC and utilising their expertise and network to widen patient access to MGC's phytomedicine products.
Snapshot of the MGC Pharmaceuticals share price
The MGC Pharma share price has had an extremely volatile year thus far. Shares in the company bolted to record highs earlier in the year after listing on the London Stock Exchange (LSE).
Since then, the MGC Pharmaceuticals share price has whittled away from its highs throughout the year.
At the time of writing, MGC shares are trading 41% higher for the day. The MGC Pharmaceuticals share price was up more than 50% earlier today, after hitting an intra-day high of 6 cents per share.
Including today's bullish price action, shares in MGC are trading around 118% higher year to date.
