Silo Pharma Inc (OTCMKTS: SILO) is headed for the top in the market this morning, and for good reason. Late last week, the company announced a license agreement with a Nasdaq listed company. Today, the company went into more detail with regard to the agreement, providing the name of the licensing partner, Aikido Pharma Inc. (NASDAQ: AIKI). Here’s what you need to know:
Skip to What You Want to Read
SILO Pens Agreement With AIKI
In the press release this morning, Silo Pharma announced that the license agreement signed last week was signed with Aikido Pharma. Under the terms of the agreement, Aikido now has an exclusive, royalty-bearing license to certain intellectual property owned by Silo surrounding the development of therapeutics for the treatment of complications of cancer.
Not only does the agreement bring AIKI into the fray with SILO, offering up a strong partner, it will also drive value to the company’s balance sheet. In fact, the company will receive an upfront payment of $1 million, paid out in $500,000 in cash and about $500,000 in stock.
On top of the upfront payment made by AIKI to SILO, the company will also be entitled to potential royalties on Net Sales in the event that the licensed property is commercially developed.
In a statement, Eric Weisblum, Chairman and CEO at Silo Pharma, had the following to offer:
Our Agreement advances Silo Pharma’s unique approach to researching and discovering therapeutics that can be used in combination with psychedelic elements. We are enthusiastic about this agreement and opportunity. Researching the use of psilocybin to treat both cancer and cancer side effects is a noteworthy opportunity for Silo Pharma and its shareholders. We look forward to updating investors on this agreement and further developments.
Why This News Is Exciting
Ultimately, there’s quite a bit to be excited about here. Most significantly:
- Partnership. The licensing agreement creates a partnership between Silo Pharma and Aikido Pharma. This partnership serves to validate the work SILO is doing with a Nasdaq-listed company taking notice.
- Immediate Value. The agreement will add $1 million to the balance sheet at SILO. That’s $1 million of non-dilutive funding that’s plenty to lead to excitement.
- Potential Future Payments. Should AIKI develop the company’s IP and bring it to the commercial stage, SILO will earn royalties. There’s nothing like the potential for strong future revenue at this stage in the game.
- Psilocybin Validation. Silo is assessing multiple compounds as potential treatment options. However, the center of its attention is psilocybin, the same compound the licensing agreement is built around. With the use of psilocybin as a therapeutic option being a relatively new idea, this agreement provides validation for the company’s work and sets the stage for tremendous growth ahead.
At the end of the day, Silo Pharma is firing on all cylinders. The company is moving into Phase 2 studies, has penned an agreement with Aikido Pharma, and continues to enhance shareholder value through its operations.
Moving forward, I’m expecting more of the same. Moreover, I’m expecting to see compelling price appreciation in the stock. Afterall, while there are only a handful of companies looking into psilocybin and other psychedelic compounds as potential treatment options, SILO is leading the charge in many ways, yet incredibly undervalued when compared to its peers. All in all, if you’re not watching SILO stock, you’re missing out.
Disclosure. The author is not an investment advisor or broker dealer. This article expresses the views and opinions of the author, which may not necessarily be the views and opinions of the outlet on which it was published. CNA Finance has a monetary relationship with Silo Pharma that may create a conflict of interest.