Investment Highlights for FSD Pharma Inc.

Key Investment Highlights for
FSD Pharma Inc. (HUGE-NASDAQ/HUGE-CSE)

FSD Pharma is working to accelerate the development of a robust pipeline of innovative treatments to address significant unmet treatment needs in brain and inflammatory disorders.

In September 2021, the Company announced the completion of the previously announced acquisition of 100% of the issued and outstanding shares of Lucid Psycheceuticals Inc. (Lucid), a Canadian-based biotechnology company focused on developing therapies to treat critical neurodegenerative diseases, for approximately US$8.9 million (CAD$11.3 million) in FSD Pharma stock.

Founded in 2020, Lucid is developing novel molecules and combinations with the goal of addressing total brain health. They are targeting some of the most challenging neurodegenerative diseases, including MS, major depressive disorder (MDD), and other brain conditions.

Lucid has exclusive worldwide licensing rights from the University Health Network (UHN) to a patent-protected family of new chemical entities (NCEs) on which Lucid’s development platform is based and from which its lead neurodegenerative disorders therapeutic candidate, LUCID-MS, has been derived. Lucid’s pipeline also includes LUCID-PSYCH, a psychedelic drug candidate targeting mental health disorders. These add to the current anti-inflammatory pipeline under development at FSD Pharma.

LUCID-PSYCH has been selected by researchers at FSD Pharma to advance its research into the treatment of major depressive disorders (MDDs) based on analysis of the drug candidate’s pharmaceutical and metabolic properties processed via machine learning algorithms as well as for its potential proprietary position. To date, the compound has shown promising results and the Company has undertaken preclinical development activities.

LUCID-MS is a disease modifying agent that is targeted to treat neurodegenerative condition in MS patients, in other words, progressive MS condition. With over 11 years of R&D, FSD Pharma owns worldwide exclusive rights for this family of compounds for development and marketing. The compound has shown excellent efficacy in various preclinical animal models with the treatment accelerating functional recovery of diseased mice, preserving myelin, and reducing axonal degeneration, while not suppressing the immune system. LUCID-MS is currently in preclinical development with anticipated IND in the Fall 2022.

FSD-PEA is a proprietary formulation of PEA, a fatty acid amide with proven anti-inflammatory properties and superior bioavailability, making it suitable to treat a range of inflammatory conditions. FSD Pharma is expected to pursue potential target indications for Phase 2 trials based on the market need and the highest potential for success derived from the pharmacological mechanisms of this compound. FSD Pharma holds exclusive worldwide licensing rights (except Italy and Spain) to FSD-PEA for all conditions in all regulatory categories.

FSD Pharma’s Intellectual Property. FSD Pharma has a strong IP portfolio, which covers composition of matter and use of FSD-PEA (2029-2034 U.S. expiration), and composition of matter on LUCID-MS family of compounds (2035 U.S. expiration). The Company continues to evaluate and strengthen its patent portfolio. FSD Pharma has filed for two trademarks: Pharmaceutically Green and In Pursuit of Total Brain Health in various markets, reflecting its ambitious efforts around FSD-PEA and various CNS conditions, respectively.

The Company has a diversified business model, which helps lessen risk. FSD Pharma seeks to de-risk investment by securing therapeutic assets that target large markets with significant unmet need. In addition, possessing multiple pipeline assets with the ability to pivot into different treatment targets based on the pharmacological response potentially reduces risk.

In order to execute on the Company’s pipeline operationally, FSD Pharma has brought on and strengthened world-class scientific and development team led by Dr. Lakshmi P. Kotra, a senior scientist at Campbell Research Institute, Brain Institute at the University Health Network (biography on page 7). Dr. Kotra is also a Professor of Medical Chemistry at the University of Toronto, having spent decades in drug discovery and development, and is now FSD Pharma’s R&D and Operations Biotechnology Lead.

FSD Pharma expects to add complementary expertise to its team, as well as partner with experienced organizations globally as it is focused on completing advanced preclinical studies and scaling up activities to successfully move FSD Pharma’s assets through clinical trials.

Close the sale of FV Pharma. FSD Pharma Inc. announced that it has entered into a firm agreement in connection with the sale of its former cannabis processing facility located in Cobourg, Ontario, where the purchaser has agreed to pay a cash sum of CAD$16,500,000, including a deposit of CAD$660,000. The deposit was received by the Company on February 24, 2022 and the transaction is expected to close on May 31, 2022.

The Company has just under 39 million shares issued and outstanding, with roughly 137,000 shareholders as of September 29, 2021, with roughly 75% of the Company under the control of roughly 100 shareholders.

FSD Pharma is well positioned financially. As of September 2021, FSD had over $39.3 million cash and cash equivalents, and continues to look for additional investment and acquisition opportunities.