PharmAla Biotech Holdings Inc. (CSE: MDMA) (OTCQB: MDXXF) announced it has executed a definitive agreement to form Restora Neurosciences, a special purpose vehicle for clinical development of its patented MDXX molecule APA-01. The company entered the agreement with Aluvaris Inc. and Diteba Inc.

Under the agreement, PharmAla and Aluvaris will each hold 50% of Restora's founding common shares. The joint venture aims to file an Investigational New Drug application with the U.S. Food and Drug Administration for APA-01, designated as (R)-2-[(2H-1,3-benzodioxol-5-yl)methyl]pyrrolidine and covered by United States Patent No. 12,042,478.

PharmAla will grant Restora an exclusive worldwide license to develop and commercialize APA-01, conditional on the joint venture raising at least $2.5 million within three months. Upon meeting this funding threshold, Restora will pay PharmAla a $500,000 license fee and 3% royalty on net sales.

Diteba will serve as the principal provider of bioanalytical and scientific project-management services for the development program. The Mississauga-based company holds licenses from Health Canada as a Drug Establishment and is registered with the U.S. Food and Drug Administration.

APA-01 is being developed for therapeutic applications in post-stroke neurorehabilitation and traumatic brain injury. The molecule is not considered a controlled substance in Canada or the United States.

The joint venture must file the first IND application within 36 months of satisfying the funding threshold. PharmAla retains ownership of underlying intellectual property and maintains veto rights over IP-related matters.

"Restora Neurosciences applies that same discipline to a novel, U.S. & PCT patented molecule whose target indications align squarely with the priorities articulated in the recent Presidential Executive Order," said Nicholas Kadysh, founding CEO of PharmAla Biotech.