FSD Pharma Inc. (NASDAQ: HUGE)(CSE: HUGE) recently disclosed its audited financial results for the fourth quarter and the entirety of the fiscal year ending December 31, 2023. Currently, the company has not generated any revenue. For the year 2023, FSD Pharma reported a net loss of $18.2 million, which is an improvement from the previous year’s net loss of $23.6 million.
The operating expenses for the company saw a decrease, landing at $23 million in 2023 compared to $27 million in 2022. By the end of 2023, FSD Pharma reported an accumulated deficit of $157.9 million alongside a working capital surplus of $6.5 million. The company’s cash reserves, including cash equivalents, stood at $2.7 million, a significant decrease from the $16.9 million reported at the end of 2022. Over the course of 2023, FSD Pharma utilized $10.8 million in its operating activities.
FSD Pharma is currently spearheading two major initiatives aimed at addressing some of the most pressing neurodegenerative, inflammatory, and metabolic health issues. These initiatives are:
- Lucid-MS: This program is in the development phase for a new treatment for Multiple Sclerosis, featuring the lead compound Lucid-21-302. Lucid-MS, through its patented chemical formulation, has shown promise in preclinical models to halt and even reverse the degradation of myelin, which is a key factor in the progression of multiple sclerosis.
- Novel Treatments for Alcohol Misuse: This second initiative focuses on developing and promoting new solutions for combating alcohol misuse and its associated conditions.
During the America’s Committee meeting for multiple sclerosis treatment and research held in February 2024, FSD Pharma unveiled the findings from the initial human Phase 1 study of Lucid-MS. The study found Lucid-21-302 to be safe and well-tolerated within a dose range of 50-300 mg when administered orally. Importantly, no significant differences were observed in the pharmacokinetics of the compound between fed and fasting states. Encouraged by these findings, FSD Pharma is planning to advance Lucid-MS into a Phase 2 clinical trial, with an estimated cost of $30 million to reach commercialization.
In addition to these developments, FSD Pharma is collaborating with its licensing partner, Celly Nu, on Unbuzzd, a product aimed at addressing alcohol misuse. The strategy for Unbuzzd encompasses both recreational retail and healthcare sectors, with Celly Nu focusing on the former. As of March 28, 2024, FSD Pharma has secured five trademarks in Canada and the U.S., and 17 with the Canadian Intellectual Property Office, related to treatments for alcohol misuse, including Unbuzzd.
FSD Pharma has faced multiple legal challenges recently. GGB Drink Lab has filed a lawsuit against FSD Pharma, accusing it of breaching a mutual non-disclosure agreement and misappropriating trade secrets, with claims valued at $53 million. This case is slated for trial in November 2024.
Additionally, former CEO Dr. Raza Bokhari has initiated five legal actions against the company. While an arbitrator dismissed his claims in 2022, the litigation remains active, with the Ontario Superior Court of Justice recently upholding the dismissal and ordering Dr. Bokhari to pay C$5,000 in costs for an unsuccessful appeal attempt.
Furthermore, FSD Pharma is contending with lawsuits from two other former employees seeking compensation for wrongful dismissal. The company also reached a $100,000 settlement with Syneos Health, LLC and Syneos Health UK Limited in August 2023.