(Correcting location of company headquarters.)

(Alliance News) - Celadon Pharmaceuticals PLC on Wednesday was optimistic about its future prospects, after signing a contract for the commercial supply of its pharmaceutical-grade high-THC cannabis product with a medicinal cannabis company in the UK.

Celadon is a West Midlands, England-based pharmaceutical company focused on researching, manufacturing and selling cannabis-based medicines.

Under the terms of the agreement, it will sell product to a minimum value of GBP3 million over the next three years. At the end of this period, the contract has the option to be extended, should both parties agree. Celadon didn't name the medical cannabis company.

The first shipment is expected in the fourth quarter of this year.

Celadon also told investors that it has received "multiple expressions of interest" in its product. While there is no guarantee these conversations will lead to commercial contracts, they're expected to move the company to a cash generative position if successful.

"We are delighted to have entered into a sizeable first contract so soon after achieving [Good Manufacturing Practices] certification in January. It builds on the positive momentum we are seeing across the business and is testament to the hard work of our employees," said Chief Executive Officer James Short.

He added: "We remain focused on converting expressions of interest into commercial contracts and have recruited a highly experienced pharmaceutical business development director to drive this."

Celadon Pharmaceuticals shares were trading 4.9% higher at 1606.00 pence each in London on Wednesday around midday.

By Holly Beveridge, Alliance News reporter

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