LEXXW - Lexaria Grants Exclusive License to Premier Wellness Science Co. Ltd. for Strategic and Long-Term Partnership in the Japanese Market
(TheNewswire)
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Minimum payments due to Lexaria ofUS$4,527,500 over the first five years to retain exclusivity
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Lexaria to receive royalty revenuefrom DehydraTECH product sales
Kelowna, British Columbia – TheNewswire - June 2, 2022 –Lexaria Bioscience Corp. (Nasdaq:LEXX) (Nasdaq:LEXXW) (the“Company” or “Lexaria”), a global innovator in drug deliveryplatforms is pleased to announce a significant exclusive* commerciallicensing agreement (the “Agreement”) in Japan with Premier Wellness ScienceCo., Ltd., (“Premier”).
Under the terms of the Agreement, Premier is purchasingthe rights to DehydraTECH technology for the Japanesenon-pharmaceutical market for use with CBD and hemp ingredients inoral liquid and non-liquid products, as well as for topical,hair-care, lip-care and cosmetics products. Premier is a wholly-ownedsubsidiary of Premier Anti-Aging Co.,Ltd. (“Parent”) which is listedon the Tokyo Stock Exchange Mothers division with securities code4934.
“Premier conducted a global competition to evaluatethe world’s most advanced molecule delivery technologies, andselected Lexaria’s DehydraTECH technology based on its superiorperformance and the extensive data available through Lexaria’s yearsof testing,” said Shinji Shosoyama, CEO of Premier.
“Lexaria is delighted to be working with PremierWellness Science which we expect will dominate the newly openingJapanese market for CBD-based products,” said Chris Bunka, CEO ofLexaria. “Premier and Lexaria share similar philosophies, such asthe provision of world-leading products created through scientificadvantages and placing the consumer’s needs ahead of our own. Wecould not have found a better partner with which to introduceDehydraTECH-enabled products to the Japanese markets.”
In order to retain ongoing exclusivity, the negotiatedminimum quarterly payments (“Payments”) to Lexaria begin September1, 2022 and, during the first five years of the Agreement, amount toUS$4,527,500. Assuming that Premier continues to submit all requiredpayments, the license for the Japanese market is perpetual.
In addition to the Payments, Lexaria will also receiveroyalty revenue from DehydraTECH licensed product sales, the terms ofwhich have been agreed to. Total revenue is expected to besignificantly greater than the minimum Payments if Premier is capableof meeting its expected revenue targets. If Premier achieves eventheir worst-case projected penetration into the Japanesenon-pharmaceutical CBD market, then based on their projections Lexariacould expect to receive annual payments of over $5 million by thefifth year of the contract.
Premier’s Parent had revenues of approximatelyUS$187,000,000 in the first three quarters of fiscal 2021 withyear-over-year revenue growth of 63.1% and strong profit margins.Parent sells over 45 product SKU’s across fourbrands, and these products are sold in more than 16,000 retail storesas well as directly through mail/web order to over 2.6 millionproprietary members. The overall Japanese cosmetics and personalproducts markets are estimated to be morethan US$35 billion in annual sales.
As well, Lexaria and Premier have agreed to examine ona case-by-case basis the possibility of entering research anddevelopment collaborations related to advanced formulation science.Premier and Parent have long-established scientific relationships withsome of the leading scientists in relevant fields in Japan.
This Agreement with Premier follows the awarding of twoissued patents by the Japan Patent Office for DehydraTECH technologyin Japan, strengthening Lexaria’s long-held beliefs that new patentprotection is a vital component of entering commercialagreements.
*The exclusive rights are subject to two previouslyissued licenses for use of DehydraTECH in Japan, which remain valid. Lexaria will not be issuing any further licenses in Japan fornon-pharmaceutical cannabinoid products.
About Premier Wellness Science Co.,Ltd .
Premier Wellness Science Co., Ltd. is focused on thewell-being of its customers that leads to good physical, mental andsocial health. The company seeks to achieve precision, individualizedgrowth in health through a scientific approach to creating the highestperformance products in the world.
About Premier Anti-Aging Co.,Ltd .
Premier Anti-Aging Co., Ltd. engages in the planning,development, import/export, mail order, wholesale, and retail businessof cosmetics and health foods. The company offers its cosmeticproducts under the DUO and CANADEL brands. It is also involved on theinformation provision and consulting services related to anti-aging,beauty, and health; research on management and beauty of beautyclinics, etc.; and marketing research and collection and analysis ofvarious information. The company was founded in 2009 and isheadquartered in Tokyo, Japan.
About Lexaria Bioscience Corp.
Lexaria Bioscience Corp.’s patented drug deliverytechnology, DehydraTECH™, improves the way active pharmaceuticalingredients (APIs) enter the bloodstream by promoting more effectiveoral delivery. Since 2016, DehydraTECH has repeatedly demonstrated theability to increase bio-absorption with cannabinoids, antiviral drugs,PDE5 inhibitors and more. DehydraTECH has also evidenced an ability todeliver some drugs more effectively across the blood brain barrier.Lexaria operates a licensed in-house research laboratory and holds arobust intellectual property portfolio with 25 patents granted andover 50 patents pending worldwide. For more information, please visit www.lexariabioscience.com .
CAUTION REGARDING FORWARD-LOOKINGSTATEMENTS
This press release includes forward-looking statements.Statements as such term is defined under applicable securities laws.These statements may be identified by words such as"anticipate," "if," "believe,""plan," "estimate," "expect,""intend," "may," "could,""should," "will," and other similar expressions.Such forward-looking statements in this press release include, but are not limited to, statements by the companyrelating the Company’s ability to carry out research initiatives,receive regulatory approvals or grants or experience positive effectsor results from any research or study. Such forward-looking statementsare estimates reflecting the Company's best judgment based uponcurrent information and involve a number of risks and uncertainties,and there can be no assurance that the Company will actually achievethe plans, intentions, or expectations disclosed in theseforward-looking statements. As such, you should not place unduereliance on these forward-looking statements. Factors which couldcause actual results to differ materially from those estimated by theCompany include, but are not limited to, government regulation andregulatory approvals, managing and maintaining growth, the effect ofadverse publicity, litigation, competition, scientific discovery, thepatent application and approval process, potential adverse effectsarising from the testing or use of products utilizing the DehydraTECHtechnology, the Company’s ability to maintain existingcollaborations and realize the benefits thereof, delays orcancellations of planned R&D that could occur related to pandemicsor for other reasons, and other factors which may be identified fromtime to time in the Company's public announcements and periodicfilings with the US Securities and Exchange Commission on EDGAR. Thereis no assurance that any of Lexaria’s postulated uses, benefits, oradvantages for the patented and patent-pending technology will in factbe realized in any manner or in any part. No statement herein has beenevaluated by the Food and Drug Administration (FDA). Lexaria-associated products are not intended to diagnose, treat,cure or prevent any disease. Any forward-looking statements containedin this release speak only as of the date hereof, and the Companyexpressly disclaims any obligation to update any forward-lookingstatements contained herein, whether as a result of any newinformation, future events, changed circumstances or otherwise, exceptas otherwise required by law.
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