MustGrow Provides Additional Information and Clarification on Commercial License Agreement with Bayer
MustGrow Biologics Corp. (TSXV: MGRO) (OTCQB: MGROF) (FSE: 0C0) (“MustGrow”) wishes to provide additional information about the collaboration agreement (the “Agreement”) with Bayer AG (“Bayer”) which was announced December 11, 2023. The Agreement is a license and collaboration agreement enabling Bayer to further evaluate certain soil applications of MustGrow’s mustard-based biocontrol technologies and to develop, formulate and commercialize licensed products containing such technologies for soil-applied, in-field uses for food and feed production in certain countries in Europe, the Middle East and Africa. The Agreement is dated effective December 11, 2023, and unless terminated earlier as provided in the Agreement, the term of the agreement shall continue until the expiration of all intellectual property licensed to Bayer under the agreement.
Under the terms of the Agreement, MustGrow will receive an initial upfront payment as well as additional payments linked to the achievement of certain business milestones. These milestones include achievement of certain technical milestones such as testing in field trials and safety studies, submission of the first regulatory dossier to the appropriate authorities, and receipt of regulatory approval for a licensed product. Upon the commencement of commercial sales, MustGrow will also be entitled to fees from royalties and manufacturing sales.
Pursuant to the Agreement, Bayer will be responsible for the regulatory and market development work (the “Development Work”) in the respective field of use necessary to commercialize MustGrow’s mustard-based biocontrol technologies, including the development of the formulated product, conducting relevant regulatory data studies for regulatory submissions, filing regulatory submissions, registration with relevant regulatory authorities, and support, marketing, and commercial sales activities. Based on the industry experience of its management team, MustGrow anticipates that the value of the upfront, milestone payments and Development Work could approximate USD $35 to $40 million over the next 5 to 7 years. The value and the timeline associated with completing the Development Work is not knowable with precision at this time for a variety of reasons, including risks relating to product development and regulatory matters and the nature of collaboration agreements, which are described more fully in MustGrow’s Annual Information Form for the year ended December 31, 2022 starting on pages 24 and 26, which is available under the Company’s profile at www.sedarplus.ca. Because of the nature of the licensing arrangement, other than costs associated with providing product for testing, there are minimal incremental costs to MustGrow in pursuing the Development Work.
Pursuant to the Agreement, Bayer has also been granted a right-of-first-negotiation for a license to use MustGrow’s mustard-based biocontrol technologies for use in bananas in particular applications, excluding post-harvest applications. MustGrow expects to continue collaborating with Bayer to consider other potential applications of MustGrow’s mustard-based biocontrol technologies, including potentially testing in regions not currently covered by the Agreement.
MustGrow is providing this additional information to the market in response to questions it has received about the Agreement, including a clarification request from the Canadian Investment Regulatory Organization.
About MustGrow
MustGrow is an agriculture biotech company developing organic biocontrol and biofertility products by harnessing the natural defense mechanism and organic materials of the mustard plant to sustainably protect the global food supply and help farmers feed the world. MustGrow and its leading global partners — Bayer, Janssen PMP (pharmaceutical division of Johnson & Johnson), Sumitomo Corporation, and Univar Solutions’ NexusBioAg — are developing mustard-based organic solutions for applications in biocontrol to potentially replace harmful synthetic chemicals in preplant soil treatment and weed control, to postharvest disease control and food preservation. Bayer has an commercial agreement to develop and commercialize MustGrow’s biocontrol soil applications in Europe, Africa, and the Middle East. Concurrently, with new formulations derived from food-grade mustard, the Company is pursuing the adoption and use of its first registered and OMRI Listed® product, TerraSanteTM, in key U.S. states. Over 150 independent tests have been completed, validating MustGrow’s safe and effective approach to crop and food protection and yield enhancements. Pending regulatory approval, MustGrow’s patented liquid technologies could be applied through injection, standard drip or spray equipment, improving functionality and performance features. MustGrow has approximately 50.1 million basic common shares issued and outstanding and 55.0 million shares fully diluted. For further details, please visit www.mustgrow.ca.
Contact Information
Corey Giasson
Director & CEO
Phone: +1-306-668-2652
info@mustgrow.ca
MustGrow Forward-Looking Statements
Certain statements included in this news release constitute “forward-looking statements” which involve known and unknown risks, uncertainties and other factors that may affect the results, performance or achievements of MustGrow.
Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “occur” or “be achieved”. Examples of forward-looking statements in this news release include: MustGrow’s receipt of an initial upfront payment as well as additional payments linked to the achievement of certain business milestones; whether and if certain development and commercial achievements, that are a pre-condition to MustGrow receiving certain fees from royalties and manufacturing sales, will occur; the anticipated value of potential aggregate payments and development capital being USD $35 to $40 million; whether and how Bayer completes any regulatory and market development work; and MustGrow’s expectation to continue collaborating with Bayer to consider other potential applications of MustGrow’s mustard-based biocontrol technologies, including testing in regions not currently covered by the Agreement. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of MustGrow to differ materially from those discussed in such forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, MustGrow. Important factors that could cause MustGrow’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include market receptivity to investor relations activities as well as those risks described in more detail in MustGrow’s Annual Information Form for the year ended December 31, 2022 and other continuous disclosure documents filed by MustGrow with the applicable securities regulatory authorities which are available at www.sedarplus.ca. Readers are referred to such documents for more detailed information about MustGrow, which is subject to the qualifications, assumptions and notes set forth therein.
This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States.
Neither the TSXV, nor their Regulation Services Provider (as that term is defined in the policies of the TSXV), nor the OTC Markets has approved the contents of this release or accepts responsibility for the adequacy or accuracy of this release.
© 2023 MustGrow Biologics Corp. All rights reserved.
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