8-K: PMGC Holdings' Subsidiary Northstrive Biosciences Enters Licensing Agreements for EL-22 in Animal Health

Northstrive Biosciences, a subsidiary of PMGC Holdings, has entered into a second amendment to a license agreement with MOA Life Plus and a binding term sheet with Modulant Biosciences to expand the use of EL-22 in the animal health sector.

Summary

• PMGC Holdings' subsidiary, Northstrive Biosciences, has entered into a Second Amendment to its License Agreement with MOA Life Plus Co., Ltd.
• This amendment clarifies the application of certain provisions of the original agreement to the expanded field of animal health.
• Specifically, it amends sections related to licensing, non-compete, milestones, research and development, commercialization, and payment obligations.
• Northstrive has also entered into a binding term sheet with Modulant Biosciences LLC for the exclusive worldwide (excluding Republic of Korea) licensing of intellectual property for use in animal health, including as a feed additive.
• The intellectual property includes U.S. Patent 8,470,551 and U.S. Patent Applications No. 19/191,246 and 19/191,258.
• Modulant will pay Northstrive a share of revenues generated from sublicensing and commercial activities, with the royalty rate decreasing after a certain dollar limit is reached.
• The definitive licensing agreement will include provisions for co-ownership of new intellectual property and annual updates from Modulant.
• A press release was issued on May 13, 2025, announcing the term sheet with Modulant Biosciences.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as the company is expanding its licensing agreements and entering new markets. However, the success of the agreement is dependent on future events and regulatory approvals.

Positives

• The agreement with Modulant Biosciences provides Northstrive with a potential revenue stream from the animal health sector.
• The exclusive licensing agreement allows Modulant Biosciences to focus on commercializing EL-22 in the animal health market.
• The co-ownership of new intellectual property developed by Modulant Biosciences could lead to further innovation and value creation.
• The collaboration with Modulant Biosciences, led by a seasoned biotechnology executive, increases the likelihood of successful commercialization.
• The agreement aligns with Northstrive's strategy of monetizing its intellectual property through strategic partnerships.

Negatives

• The definitive licensing agreement with Modulant Biosciences is subject to approval from Northstrive's head licensor.
• The term sheet is non-binding until a definitive agreement is executed, and the parties have 90 days to reach an agreement.
• The revenue sharing arrangement is subject to a dollar limit, after which the royalty rate decreases, potentially limiting Northstrive's long-term revenue potential.
• The success of the agreement depends on Modulant Biosciences' ability to successfully develop and commercialize EL-22 in the animal health market.

Risks

• The definitive licensing agreement with Modulant Biosciences may not be finalized within the 90-day timeframe.
• The head licensor may not approve the terms of the agreement, preventing the deal from closing.
• Modulant Biosciences may not be successful in developing and commercializing EL-22 in the animal health market.
• Regulatory hurdles and competition in the animal health market could impact the success of the agreement.
• The revenue generated from the agreement may not meet expectations.

Future Outlook

The parties intend to finalize and execute the definitive license agreement in the coming months, pending necessary approvals from Northstrive's head licensor. If EL-22 is successfully developed and brought to market, the license could become a long-term revenue-generating asset.

Management Comments

• Modulant Biosciences CEO Tom Campi stated that targeting the myostatin pathway with a probiotic approach could be a breakthrough for achieving improved body composition in livestock and companion animals.
• Tom Campi also stated that the licensing of EL-22 will enable Modulant to evaluate the muscle-building properties of the modified lactobacillus casei for treating livestock and supporting the industry's environmental efforts.

Industry Context

The agreement reflects a growing trend in the animal health industry towards innovative solutions for improving livestock health and productivity. The use of probiotics to target the myostatin pathway represents a novel approach to muscle preservation in livestock.

Comparison to Industry Standards

• Elanco Animal Health and Huvepharma are major players in the animal health industry, and Modulant Biosciences CEO Tom Campi has previously worked for both companies.
• The licensing agreement is similar to other deals in the biotechnology industry, where companies license their intellectual property to partners for commercialization.
• The revenue sharing arrangement is a common structure in licensing agreements, with the royalty rate often decreasing after a certain milestone is reached.

Stakeholder Impact

• Shareholders may benefit from the potential revenue generated by the licensing agreement.
• Employees of Northstrive Biosciences may have opportunities to work on the commercialization of EL-22 in the animal health market.
• Customers in the animal health market may benefit from the development of new products based on EL-22.
• Suppliers to Northstrive Biosciences may see increased demand for their products and services.
• Creditors of Northstrive Biosciences may benefit from the improved financial performance of the company.

Next Steps

• Finalize the definitive licensing agreement between Northstrive Biosciences and Modulant Biosciences.
• Obtain necessary approvals from Northstrive's head licensor.
• Modulant Biosciences to develop and commercialize EL-22 in the animal health market.
• Modulant will establish, and cause its sublicensees to establish, a detailed plan for the commercialization of each Licensed Product, and will provide Northstrive with a final version of the same within three (3) months following Modulants or its sublicensees receipt of regulatory approval to sell such Licensed Product.

Key Dates

Keywords

Northstrive Biosciences, Modulant Biosciences, EL-22, Animal Health, Licensing Agreement, Intellectual Property, PMGC Holdings, Revenue Sharing, Sublicensing, Biotechnology