FSD Pharma Inc. (NASDAQ: HUGE) shares absolutely exploded on Wednesday morning after the company received a key update from the U.S. Food and Drug Administration (FDA).

Note that while this stock was halted when trading began for the day, on last look over 5 million shares had changed hands.

Specifically, the FDA has given the company permission to submit an Investigational New Drug Application (IND) for the use of FSD-201 to treat COVID-19.

FSD Pharma is focused on developing FSD-201 for its anti-inflammatory properties to avoid the cytokine storm associated with acute lung injury in hospitalized COVID-19 patients.

The primary endpoint was to determine if FSD-201 plus SOC provides a significant improvement in clinical status (i.e., shorter time to symptom relief).

At the same time, key secondary objectives include determining if FSD-201 demonstrates additional benefit in terms of safety, objective assessments such as length of time to normalization of fever, length of time to improvement of oxygen saturation and length of time to clinical progression, including time to mechanical ventilation or hospitalization, and length of hospital stay. The treatment period is expected to be 14 days.

This company’s market cap was only $27 million as of Tuesday’s closing price. Now the market cap is closer to $85 million. FSD Pharma only has $7.9 million on the balance sheet. Also, investors might see a capital raise in the very near future.

Raza Bokhari, M.D., executive co-chair and CEO, commented:

FDA’s permission to design a proof-of-concept study in COVID-19 patients evaluating clinical doses of FSD-201 is a paradigm shift for FSD Pharma and is the result of outstanding work conducted by Dr. Edward Brennan, President FSD BioSciences, and his team. We contacted the FDA in late-March 2020 after becoming aware that several Italian physicians and scientists were advocating for use of ultramicronized PEA for patients suffering from symptoms of COVID-19, based on the drug’s mechanism of action as a potent and safe anti-inflammatory agent that reduces the production of pro-inflammatory cytokines. Numerous studies over the past 40 years also validate the efficacy and safety of ultramicronized PEA in the treatment and prophylactic effects in respiratory infections. These studies also pointed out that the ease of application of PEA offers the possibility to have a quick therapeutic answer ready in case of a flu epidemic.

FSD Pharma stock traded up over 225% at $10.11, in a 52-week range of $2.39 to $32.16.

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