Cosmos Health Inc. (NASDAQ:COSM), a $19.5 million market cap healthcare company with annual revenues of $56 million, has entered into an exclusive licensing agreement with DocPharma Single SA, a related party, to commercialize two patented cancer treatments, according to a filing with the Securities and Exchange Commission on Wednesday. According to InvestingPro data, the company's shares have surged nearly 40% year-to-date, despite facing profitability challenges.
Under the agreement signed on December 31, 2024, Cosmos Health obtained a royalty-bearing, exclusive worldwide license to actively commercialize the patents through research and preclinical and clinical trials for the life of the patents or 20 years, whichever is longer. The patents, filed in 2016 and 2017 respectively, cover innovative treatments for cancer.
InvestingPro analysis indicates the company is currently burning through cash, with negative free cash flow of $3.32 million in the last twelve months, making this investment particularly significant for its future.
The terms of the agreement include an initial payment of $500,000 due by the end of 2024, followed by fixed annual payments of EUR 350,000 during the five-year Start-Up Term from 2025 to 2030. After the Start-Up Term, Cosmos Health will pay a 1.5% royalty on annual net sales of licensed products covered by an issued patent.
Moreover, Cosmos Health retains an optional buy-out right for a total amount of EUR 7,500,000, which can be exercised with 60 days' notice and a 60-day close period. The company also has the right to sublicense the patents.
The agreement allows Cosmos Health to terminate for convenience after five years from the effective date with a 30-day notice. Conversely, the licensor may terminate the agreement for breach or default by Cosmos Health if not cured within 60 days or upon the company’s bankruptcy, insolvency, or receivership.
This strategic licensing agreement is governed by New York law and will be subject to the jurisdiction of New York courts.
The deal represents a significant step for Cosmos Health in expanding its portfolio in the oncology space and marks a commitment to advancing cancer treatment research and development.
The information reported is based on the company's SEC filing.
In other recent news, Cosmos Health Inc. has made several key announcements. The company reported a net loss of $33.81 million in the past twelve months but also noted a revenue growth of 13.01% within the same period. In addition, Cosmos Health has appointed Professor Dimitrios Trafalis as the new Head of Oncology at its Research and Development division.
In terms of financial performance, Cosmos Health announced stable Q3 financials, with a slight decrease in quarterly revenue to $12.41 million. However, the company managed to significantly reduce costs by 18.6%. Its subsidiary, CosmoFarm, generated record revenues of approximately $43 million in the first ten months of 2024, a boost of 8.62%.
The company also issued additional warrants for company stock, a strategic move representing a 200% increase over previous warrant shares issued. In a recent shareholders meeting, key proposals such as the election of directors, issuance of shares, approval of an equity incentive plan, and the potential for reverse stock splits were approved.
In terms of expansion, Cosmos Health received UK orders for its C-Scrub antimicrobial wash and initiated the development phase for CCDL24, a novel treatment for gastrointestinal disorders. These are recent developments in Cosmos Health's operations.
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