Small Pharma Shares Business Update Ahead of Annual Financial Results

Small Pharma Inc. (TSXV: DMT | OTCQB: DMTTF), a biotechnology company focused on short-acting psychedelic-assisted therapies for mental health conditions, provides a business update ahead of its annual financial results for the fiscal year ended February 28, 2022. All references to “$” in this press release refer to Canadian dollars unless otherwise indicated.

Small Pharma has appointed Dr. Alastair Riddell as Chief Operating Officer of the Company. Dr. Riddell joins the management team with over 30 years of international leadership experience in the pharmaceutical, life science and biotech industries. In his roles as CEO of Pharmagene plc, Paradigm Therapeutics and Stem Cell Sciences as well as Chairman of Feedback plc, Dr. Riddell led significant fundraises, including an IPO on the London Stock Exchange and trade sales to Takeda in Japan and Stem Cells, Inc. in the USA. In companies now acquired by Pfizer, J&J and GE Healthcare, Dr. Riddell oversaw all phases of clinical trials of novel anti-inflammatory, anti-infective and oncology products before moving to international sales and marketing. Dr. Riddell was recently Chairman of the South-West Academic Health Science Network, which fosters links between the National Health Service, industry and universities. He is non-executive director of one NASDAQ-listed and two UK biotech companies.

Following Dr. Riddell’s appointment, Marie Layzell, the current COO and Head of CMC, will take on the role of Chief Manufacturing and Development Officer to build out the infrastructure to support Small Pharma’s growing pipeline of products as they progress into and through clinical trials.

The Company continues to build a robust IP portfolio with two additional patents granted. These new patents bring the Company’s portfolio to a total of six granted patents and 68 patent applications pending across the Company’s psychedelic and non-psychedelic portfolio.

EP 3 826 632, Composition of Matter patent
This European patent protects Composition of Matter of certain deuterated homologues of N,N-dimethyltryptamine (“DMT”), including the active ingredient in SPL028. This patent sits alongside the Company’s UK patent for SPL028, strengthening its protection in European markets.

EP 3 844 147, Composition of Matter patent
This European patent protects Composition of Matter of certain deuterated homologues of certain tryptamine compounds, including the active ingredients currently being investigated in the SPL029 series. This patent also provides protection for therapeutic applications of these deuterated tryptamines and their use in the development of orally active formulations.

As Small Pharma’s portfolio continues to advance and expand, the Company has structured its programs into two areas: (i) “Ultra Short-acting” Psychedelic Program targeting a <30-minute psychedelic experience aimed at maximizing the clinical scalability of psychedelic therapies; and (ii) “Short acting” Psychedelic Programs, which incorporates a pipeline targeting a >30-minute short psychedelic experience aimed at optimizing patient convenience and expanding therapeutic potential in depressive disorders and additional indications.

SPL026 intravenous (“IV”) DMT-assisted psychotherapy for the treatment of Major Depressive Disorder (“MDD”) is the Company’s lead program, currently in the Phase IIa part of the Phase I/IIa trial.

Phase I results demonstrate SPL026 to be safe and well tolerated and to elicit a short, psychedelic experience
The full dataset for the Phase I clinical trial demonstrates a clear correlation between the intensity and quality of the psychedelic experience and doses of SPL026, starting at 9 mg and up to 21.5 mg, across all four cohorts. IV administration of SPL026 offers a short-lived, well-tolerated psychedelic experience of ~20 minutes, enabling a dosing session of ~30 minutes. No drug-related serious adverse events and minimal short-lived adverse events were reported.

Phase IIa clinical trial dosing expected to be completed in coming months
The Phase IIa clinical trial is progressing well as the Company enters the latter stages, with a significant number of patients dosed and no safety concerns highlighted to-date. However, slower than anticipated patient recruitment following COVID-19 government restrictions in the UK had some impact on trial timelines. These restrictions have been lifted and as such, patient recruitment has significantly improved. As a result, dosing is expected to complete in the coming months. Updates on trial completion progress and data are anticipated throughout H2 2022.

Phase IIb clinical trial preparation continues
Preparation continues for the international multi-site Phase IIb clinical trial, with further scientific advice requested from the United States Food and Drug Administration and the European Medicines Agency. The Company has also selected a centralized Contract Research Organization to support the execution of the study.

Drug interaction study in patients with MDD expected to commence in H2 2022
This study will assess the impact of selective serotonin reuptake inhibitors (“SSRIs”) on the safety, tolerability, pharmacokinetics and pharmacodynamics of SPL026 with psychotherapy. The aim of the study is to enable a better understanding of the interaction between DMT-assisted psychotherapy and existing antidepressants, opening up the potential to reach the broadest population of patients suffering from MDD. Additionally, this could facilitate patient recruitment in future trials as patients may no longer be required to discontinue current SSRI medication.

UK “Fast-track” Designation
Following the award of the fast-track Innovation Passport Designation by the MHRA in October 2021, Small Pharma has engaged in the Innovative Licensing and Access Pathway. Small Pharma has initiated collaborative discussions regarding the Target Development Profile with key regulatory bodies to identify opportunities to accelerate time to market and patient access to SPL026, DMT-assisted psychotherapy.

Short-acting Psychedelic Programs

SPL026 IM Phase I study planned for 2022
The SPL026 intramuscular (“IM”) preclinical program is complete and a comparative pharmacokinetics Phase I study is planned for 2022. The study will compare the treatment profile of IM versus IV modes of administration of SPL026. IM injection would offer a simple injectable form that could further enhance convenience and accessibility of DMT-assisted psychotherapy for patients and clinicians.

SPL028, deuterated DMT-assisted psychotherapy, Phase I clinical trial planned for H2 2022
The program has been initiated with positive preclinical data of IM and IV formulations of SPL028. In vitro data demonstrated a reduction in clearance rate and significant extension in half-life compared to SPL026. SPL028 offers a similar pharmacological profile to SPL026 in vitro and in vivo, with differentiated pharmacokinetics. Additionally, toxicological profiling demonstrated SPL028 to be safe and well-tolerated in vivo at all doses tested, demonstrating significant safety margins for progressing into first-in-human trials. A Phase I clinical trial is planned to commence in H2 2022.

The Company has entered into a new master service agreement with LifeSci Advisors, LLC (“LSA”) to continue to provide investor relations services (the “Services”). The new agreement will commence on June 1, 2022 for a period of three months and shall automatically continue after the end of the initial term for successive one month periods unless either party provides written notice of termination at least 30 days prior to the commencement of a new term. LSA will receive a monthly fee of US$15,000 for the Services. The Company and LSA act at arm’s length and to the knowledge of the Company, LSA does not currently own any securities of Small Pharma. The agreement is on similar terms and conditions to the initial master service agreement between the parties dated June 20, 2021. LSA has agreed to comply with all securities laws and policies of the TSX Venture Exchange (the “TSXV”) in providing the Services. No stock options or other compensation are being granted in connection with the engagement.

The Company had cash on hand as of February 28, 2022 of approximately $40.7 million (unaudited) and working capital of approximately $38.5 million (unaudited). The Company’s annual financial results for the fiscal year ended February 28, 2022 will be reported in June 2022.

Small Pharma is a biotechnology company progressing a pipeline of short-acting psychedelics with therapy for the treatment of mental health conditions, with a current focus on depression. Small Pharma initiated a clinical program into DMT-assisted psychotherapy in February 2021. This program includes a Phase I/IIa trial on the Company’s lead candidate alongside the development of a robust pipeline of proprietary preclinical assets.

DMT is a naturally occurring psychedelic tryptamine found in plants and in the brain of mammals. Scientific evidence suggests DMT offers the potential for rapid-acting and long-lasting antidepressant effects. DMT is differentiated by its short psychedelic experience (< 30 mins), which allows for short treatment sessions and offers the potential for convenient supervised treatments within patient clinics. Small Pharma is advancing a pipeline of DMT-based therapies and is leading the most advanced clinical trial in commercial development for DMT-assisted psychotherapy in Major Depressive Disorder.