Hoth Therapeutics Inc (NASDAQ:HOTH) has agreed to license its cannabinoid therapeutic, HT-005, for lupus patients back to Zylö Therapeutics.

The agreement gave Hoth an exclusive North American license to a possibly topical treatment that delivers anandamide using Zylö's patented delivery system, called Z-pods.

Hoth's CEO, Robb Knie, said, "the licensing of HT-005 back to Zylö after proving its efficacy and safety in animals is a win-win for both companies."

Scott Pancoast, Zylö's CEO, said, "Hoth has been a great partner, working closely with the Zylö team to confirm efficacy in an animal model and to strategize about the preclinical development plan."

Why It matters: Hoth will receive further equity in Zylö and the potential upside through royalties. It will also reap cost savings, as Zylö will be responsible for future development costs.

In May 2020, Hoth Therapeutics made a small equity investment in Zylö Therapeutics.

The significant reduction of plaque severity in the overall composite score was observed within three weeks and maintained throughout the 10-week treatment cycle.

Price Action: HOTH shares traded higher by 2.58% at $0.80 premarket on the last check Wednesday.

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