London, 24 May 2023 – Celadon Pharmaceuticals Plc (AIM: CEL), a UK-based pharmaceutical company focused on the research, cultivation, manufacturing and sale of breakthrough cannabis-based medicines, announces that it has entered into a contract for the commercial supply of its pharmaceutical-grade high-THC cannabis product with a leading UK medicinal cannabis company.

Under the terms of the contract, Celadon will sell a minimum of £3 million worth of product over the next three years, with the first shipment expected in Q4 2023. At the end of the three years, the contract can be extended for a further two years with the mutual agreement of the parties.

In addition to this inaugural contract win, Celadon has received multiple expressions of interest in the sale of its pharmaceutical-grade product. The Company is currently in discussions to convert these into commercial contracts, and whilst there is no guarantee around if or when these will convert, if successful they would be expected to move the Company to a cash-generative position. The discussions include a further contract from the inaugural customer worth in excess of £7 million of annual supply.

The contract win announced today follows the Company’s Good Manufacturing Practices (“GMP”) registration on 16 January 2023, and the update to its Home Office licence on 14 March 2023. The Directors believe Celadon is one of a limited number of companies globally with the approvals in place to cultivate and manufacture EU-GMP grade high-THC medicinal cannabis and is understood to be the first for high-THC API in the UK since medicinal cannabis was legalised in 2018.

The level of interest in Celadon’s product further confirms management’s belief that UK production, combined with indoor, fully-controlled hydroponic cannabis cultivation, has a significant advantage over imported products, with the associated frustrations for patients of supply delays and increased cost.

James Short, Chief Executive Officer of Celadon, said:

“We are delighted to have entered into a sizeable first contract so soon after achieving GMP certification in January. It builds on the positive momentum we are seeing across the business and is a testament to the hard work of our employees.

“Demand for our product continues to grow, as we deliver on our strategy of being a leading pharmaceutical cannabis company. We remain focused on converting expressions of interest into commercial contracts and have recruited a highly experienced pharmaceutical business development director to drive this.”

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ENVIRONMENT

Celadon uses a highly controlled indoor cultivation environment in order to produce plants to the tightest pharmaceutical tolerances and cannabinoid content. Hydroponics is used to grow plants in a soilless substrate, with mineral salts dissolved into high quality filtered water and delivered direct to the roots of the plant. Micro-zoned sensors monitor every aspect of the environment in real time; from the room’s temperature, lighting cycles and humidity, to the plant’s mineral absorption and transpiration rates. This allows Celadon to build a data bank of optimal growing conditions for each strain, as well as adjust the room automatically.

TRACKING

Celadon has a bespoke “track and trace” system throughout the production process, providing complete transparency. Each plant is given a unique QR code, allowing it to be traced from its origins through to the final product. IOT boxes are used to automatically feed data into the system, from environmental data to the product’s weight, at each stage of production. This provides full visibility over the production process, as well as inventory tracking and accurate cost analysis which feeds into our accounting systems.

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Medical Cannabis Market, Transparency Market Research May 2022

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Stannard et al, (2016) Traditional opioids for chronic non-cancer pain: untidy, unsatisfactory, and probably unsuitable

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Stannard et al, (2016) Traditional opioids for chronic non-cancer pain: untidy, unsatisfactory, and probably unsuitable

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Stannard et al, (2016) Traditional opioids for chronic non-cancer pain: untidy, unsatisfactory, and probably unsuitable

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ENVIRONMENT

Celadon uses a highly controlled indoor cultivation environment in order to produce plants to the tightest pharmaceutical tolerances and cannabinoid content. Hydroponics is used to grow plants in a soilless substrate, with mineral salts dissolved into high quality filtered water and delivered direct to the roots of the plant. Micro-zoned sensors monitor every aspect of the environment in real time; from the room’s temperature, lighting cycles and humidity, to the plant’s mineral absorption and transpiration rates. This allows Celadon to build a data bank of optimal growing conditions for each strain, as well as adjust the room automatically.

TRACKING

Celadon has a bespoke “track and trace” system throughout the production process, providing complete transparency. Each plant is given a unique QR code, allowing it to be traced from its origins through to the final product. IOT boxes are used to automatically feed data into the system, from environmental data to the product’s weight, at each stage of production. This provides full visibility over the production process, as well as inventory tracking and accurate cost analysis which feeds into our accounting systems.

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Legalised in 2018

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Legalised in 37 States Limited Federal legalisation

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Legalised in 2016

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Legalised in 2016

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Legalised in 2016 Rapid growth to >200k patients (2019-21)

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Legalised in 2001

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BUSINESS DESCRIPTION

 

Celadon Pharmaceuticals Plc is a UK based pharmaceutical company focused on the research, cultivation, manufacturing, and sale of breakthrough cannabis-based medicines. Its primary focus is on improving the quality of life for chronic pain sufferers, as well as exploring the potential of cannabis-based medicines for other conditions such as autism.

Its 100,000 sq ft UK facility operates to an EU-GMP standard and comprises indoor hydronic cultivation, proprietary GMP extraction and manufacturing and an analytical and R&D laboratory. The Company’s subsidiary owns a Medicines and Healthcare Products Regulatory Agency (“MHRA”) approved clinical trial using cannabis-based medicinal products to treat chronic pain in the UK. Celadon also has a minority interest in early-stage biopharma Kingdom Therapeutics Limited which is developing a licensed cannabinoid medicine to treat children with Autism Spectrum Disorder

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COUNTRY OF INCORPORATION/OPERATION

 

Celadon Pharmaceuticals Plc is incorporated in England and Wales and is listed solely on the London Stock
Exchange Alternative Investment Market (AIM), and is subject to the UK City Code on Takeovers and Mergers.

TIDM: CEL.L
ISIN: GB00BDQYGP38

There are no restrictions on the transfer of Celadon Pharmaceutical’s shares.

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AIM SECURITIES IN ISSUE

 

The following information is correct as at 3rd June 2024.

The Company’s issued share capital comprises

65,744,617 ordinary shares

Each with a nominal value of 1 pence

So far as the Company is aware, 41.71% of its issued share capital is not in public hands.

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