Order book reaches £40m for cannabis-based medicine developer

Cannabis-based medicine developer Celadon Pharmaceuticals has signed a deal with a newly established healthcare company for the supply of its medicinal cannabis product from its Rugby facility.

The contract has minimum order quantities with a value of up to £10.5m over the five-year term, with volumes increasing materially from year one to year three. The cultivation of the products for the minimum order volume for the first supply year will begin no later than a year’s time.

Celadon entered into a strategic collaboration with Valeos Pharma A/S, a Danish EU-GMP cultivator of medicinal cannabis products in September 2024. This collaboration will allow Celadon to supply to its European customer (worth up to £26m over three years) from Valeos’ Danish cultivation facility, reducing the administrative burden of supplying this customer from the UK and increasing the capacity of Phase 2 of Celadon’s UK cultivation facility that is able to supply its UK customers.

This contract win takes the potential order book for Celadon up to £40.7m when combined with the group’s £26m European contract announced in November 2023, and the two UK contracts worth £4.2m announced in May and September 2023.

James Short, Chief Executive Officer of Celadon, commented: “We are pleased to have signed this new contract with another key healthcare partner. Our collaboration with Valeos Pharma A/S has been pivotal in increasing our ability to supply product to our pharmaceutical and healthcare customer, enabling us to begin converting our bank of Letters of Intent into signed sales agreements. This contract represents another key milestone as we continue to grow and fulfil the demand for high-quality pharmaceutical-grade medicinal cannabis.

“As demand for medicinal cannabis products continues to rise, our focus remains on delivering exceptional quality while increasing our capacity to meet this rapidly growing market.”