Enveric Biosciences ( ENVB ) shares are trading higher after the company signed two non-binding term sheets with an undisclosed biotechnology company to pursue the out-licensing of cannabinoid-COX-2 conjugate compounds for pharmaceutical and non-pharmaceutical applications for joint diseases.

“We are pleased to announce that a second biotechnology company has stepped forward looking to join Enveric in moving some of the company’s promising assets forward,” said Joseph Tucker, Director and CEO of Enveric.

“Ultimately, we believe the definitive licensing agreements, once negotiated and finalized, could represent an excellent potential source of revenue for Enveric, and continue to demonstrate the value of Enveric’s extensive portfolio of assets,” Tucker added.

Also Read: EXCLUSIVE: Enveric Biosciences Announces Non-Binding Deals To License Out Three Types of Drug Compounds.

For all human and animal joint pathology applications, the undisclosed licensee would assume responsibility for all future product development efforts and, in return, would receive exclusive, royalty-bearing global licenses to develop, market, and sublicense the compounds. 

The compounds are new chemical entities that include cannabinoids in conjugate form with COX-2 inhibitors and cannabinoids in conjugate form with selected steroids.

The pharmaceutical application term sheet provides that Enveric could be eligible to receive future development and sales milestone payments of up to approximately $61 million, assuming certain conditions are met, including receiving approval for the investigational new drug application and completing Phases I through 3 testing of the licensed product. 

Royalty rates could range from 2.5% up to 10% on future sales, depending on meeting certain sales criteria.

The non-pharmaceutical application term sheet provides that Enveric could be eligible to receive future development and sales milestone payments of up to approximately $21 million, with royalty rates ranging from 0.25% up to 7%.

Through the out-licensing of the two assets and meeting various development and sales milestones, Enveric could receive milestone payments that total up to approximately $82 million.

Price Action: ENVB shares are up 66.10% at $1.83 on the last check Tuesday.

Image: Mehdi Nobakht from Pixabay