Creso Pharma (ASX:CPH) has secured a Distribution Agreement for its hemp-derived therapeutic products in Pakistan, the Philippines, and other new potential markets.
Creso Pharma Limited (ASX:CPH) announced today that the company had secured a distribution agreement with a leading nutritional supplements company called Route2 Pharm Pvt Ltd, which will allow Creso to import, market, distribute and sell its innovative hemp-derived therapeutic products exclusively into Pakistan and the Philippines.
The deal also allows Creso to market, distribute and sell its products non-exclusively into other potential target markets including Cambodia, Afghanistan, Azerbaijan, Bangladesh, Georgia, the Maldives, Myanmar, Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.
The agreement is worth A$2.5 million in the first year and covers a total potential market of over 750 million people.
Route2 is a subsidiary company of the Pakistan-based Route2Health, which has over thirty years of pharmaceutical sciences experience and produces and distributes world-class herbal remedies and dietary supplements.
Route2Health has United States Pharmacopeia (USP) GMP compliant manufacturing facilities and global partnerships.
The agreement will span three years and gives Route2 exclusivity rights over the CPH's cannaQIX® and cannaDOL product lines in Pakistan and the Phillipines, assuming Route2 achieving minimum order quantities for each product line in the first contractual year, being the 1st of January to the 31st December.
First Contractual Year minimum order quantities are as follows:
The minimum order quantities will come into effect three months after each product is registered in each exclusive territory, and Route 2 shall launch and commence distribution within 6 months after such product registration, with minimum order quantities in the first contractual year being adjusted pro-rata relative to the date that a product is registered and launched in an exclusive territory.
Route 2 is responsible for obtaining all of the legally required registrations, authorizations and certifications during the agreement.
For the second and third contractual years of the Agreement, the Parties will negotiate in good faith to set new minimum sales targets.
Creso has reserved the right to terminate the agreement should minimum order quantities be unmet within any year of the contract,
In the event that minimum order quantities are not met within any Contractual Year, Creso has the right to terminate the Agreement upon giving Route 2 six months written notice.
Creso's agreement follows a decision by the Pakistan government in September 2020 to allow for the country to enter into the billion-dollar cannabidiol (CBD) market.
Route2Health has a strategic association with Highnoon Laboratories Limited (PSX: HINOON), one of Pakistan's most successful and progressive pharmaceutical companies. This association with Highnoon allows Creso to leverage their combined international reach to distribute and sell Creso's products into additional markets including the Philippines and Cambodia, as well as Afghanistan, Azerbaijan, Bangladesh, Cambodia, Georgia, the Maldives, Myanmar, Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.
Creso has a growing portfolio of cannabis and hemp-derived products that focus on four key areas including therapeutics, nutraceuticals, animal health, and cosmetics. CPH currently has a portfolio of 13 products, eight of which have been commercialized and are generating revenues, as well as a strong product development pipeline.
This agreement has the potential to take Creso into markets with a combined population of over 750 million people. Non-executive Chairman of Creso Pharma, Adam Blumenthal
"Our mission is to deliver access to affordable, high quality, broad-spectrum, GMP products for the betterment of people's lives everywhere. We're delighted to conclude this important partnership, through which we hope to provide the opportunity for millions of people to have access to our innovative products," Non-executive Chairman Adam Blumenthal.
Tausif Khan, the Chairman of Route2 and Highnoon Laboratories said: "We are very excited to progress this partnership with leading global cannabis company Creso Pharma. There exists a vast amount of real-world and strong clinical evidence which supports the safety and efficacy of hempbased therapeutic products."
"The basis for this partnership is a shared commitment of bringing affordable, high-quality products to market which improve peoples lives. We intend to fully leverage the financial and marketing strength of our group to deliver on this mission," added Khan.
Shahnawaz Baig, Managing Director of Route2 said: "Our company has thirty years' experience of successfully bringing products to market. These products draw on our knowledge in both pharmaceutical sciences and time-tested herbal remedies."
"We have been strongly encouraged with the recent regulatory breakthrough on CBD in Pakistan, which will result in the removal of obstacles to patient access. We continue to work closely with the relevant authorities to pave a way for patients and consumers to gain access to the benefits of Creso's innovative hemp-derived therapeutic
products," Baig concluded.
To learn more about Creso Pharma, visit the company HQ here.
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