PharmAla Biotech (CSE: MDMA; OTCQB: MDXXF, Toronto) has signed a term sheet to grant Jupiter Neurosciences (Nasdaq: JUNS, Jupiter, Florida) exclusive, perpetual US rights to ALA-002, its non-racemic MDMA novel chemical entity, in a transaction valued at over USD 100 million. The deal gives Jupiter, a CNS-focused company formerly known as Jupiter Orphan Therapeutics, a dedicated US development and commercialization vehicle for the asset while PharmAla retains all rights outside the US, including through its Cortexa joint venture in Australia. The transaction remains at term sheet stage, with a definitive agreement to be executed within 90 days.
Under the terms, PharmAla will receive upfront consideration of USD 3.33 million at closing, comprising USD 1.50 million in cash and USD 1.83 million in Jupiter common stock subject to a 10-day lock-up. Jupiter has deposited USD 600,000 into escrow upon signing, which will be credited against the cash component at closing; if the definitive agreement is not executed within 90 days, PharmAla retains the escrowed amount as a reverse termination fee, subject to fault-based carve-outs. Additional development milestone payments and single-digit royalties on US net sales make up the remainder of the stated USD 100 million potential value, though specific milestone triggers and royalty rates were not disclosed.
Deal context
ALA-002 is a patented, non-racemic small molecule described by PharmAla as engineered to deliver improved cardiovascular safety and reduced abuse liability relative to racemic MDMA, while preserving the pro-social and therapeutic properties associated with MDMA-assisted therapy. Standard racemic MDMA comprises a 50/50 mixture of R- and S-enantiomers; ALA-002's non-racemic composition represents a chemically distinct formulation with its own IP position. The US FDA has recognized ALA-002 as a novel chemical entity, a designation that carries potential regulatory exclusivity advantages over racemic MDMA products.
ALA-002's pharmacology is consistent with the broader MDMA class, acting on serotonin, dopamine, and norepinephrine transporters and receptors. PharmAla's characterization of the asset's improved safety profile — specifically reduced cardiovascular burden and lower abuse potential — is sourced from company materials and has not been independently verified through published clinical data. No clinical trial identifiers or efficacy readouts for ALA-002 were disclosed in the announcement, and the asset appears to be at an early development stage, with the deal structure oriented around future US development activity by Jupiter.
PharmAla has been active in building clinical evidence around its MDMA supply platform ahead of this transaction. The company signed a supply and data agreement with Nautilus Sanctuary for a Phase II MDMA clinical trial in frontline healthcare workers in March 2026, and entered a drug donation agreement for an MDMA-assisted therapy trial in fibromyalgia in February 2026. PharmAla's clinical-grade MDMA is also currently supplied into US government-sponsored trials funded by the Department of Veterans Affairs and the Defense Health Agency, according to the company.
Industry and transaction context
The upfront payment of USD 3.33 million is modest relative to the USD 100 million headline, reflecting the early development stage of ALA-002 and the term sheet structure of the arrangement. The gap between upfront and total potential value is wide even by psychedelic-sector standards, where deals have historically been small relative to conventional CNS licensing. The reverse termination fee mechanism — USD 600,000 payable to PharmAla if Jupiter does not execute a definitive agreement within 90 days — provides PharmAla with limited but concrete downside protection at this stage.