SciSparc's High-Stakes Pivot from Cannabis to Medical Devices

TEL AVIV, Israel – November 26, 2025 – SciSparc Ltd., a clinical-stage pharmaceutical company known for its focus on cannabinoid-based therapies, today announced a dramatic strategic pivot with its planned acquisition of a portfolio of medical device patents from Xylo Technologies Ltd. The deal, centered on the innovative MUSE™ endoscopic system for treating gastroesophageal reflux disease (GERD), signals a significant diversification for the Nasdaq-listed firm, moving it from the volatile world of biotech drug development into the established, yet competitive, medical device market.

The binding term sheet gives SciSparc the intellectual property for MUSE™, a device already commercialized in Greater China. SciSparc intends to replicate that model in major Western markets, a bold move for a company whose primary identity has been tied to drug programs for conditions like Tourette syndrome and Alzheimer's disease. While the acquisition opens a potential path to new revenue streams, it also introduces considerable risks, including shareholder dilution and the formidable challenge of navigating a complex global regulatory landscape.

A Bold Diversification

SciSparc's core business has been its majority-owned subsidiary, NeuroThera Labs, which is developing a pipeline of pharmaceutical assets based on THC and CBD. This abrupt entry into the medical device sector represents a fundamental shift in corporate strategy. The move comes as the company faces financial headwinds, having reported a revenue decrease of over 54% in 2024 and a net loss of $6.28 million. For a company with a market capitalization hovering in the low single-digit millions, a strategic pivot to tap into a new market is an aggressive, high-stakes maneuver.

The terms of the acquisition reflect this. In exchange for the MUSE™ intellectual property, SciSparc will issue shares to Xylo representing 19.99% of its outstanding share capital. Based on recent market capitalization figures, this non-cash transaction is valued at several hundred thousand dollars. While preserving cash, the deal will dilute the holdings of existing investors—a fact not lost on the market. SciSparc's stock (SPRC) fell over 15% following the announcement, signaling investor apprehension about the risks associated with integrating a business line so far removed from its pharmaceutical research and development expertise.

Analysts note that investors must weigh the long-term potential of entering the projected $3 billion GERD device market against the immediate financial and operational hurdles. The success of this venture will depend entirely on SciSparc’s ability to execute a global commercialization strategy, an endeavor far different from its current focus on clinical drug trials.

The MUSE™ System: A Clinically Backed Play

The centerpiece of the acquisition is the MUSE™ system, a single-use endoscopic device for performing transoral fundoplication (TIF). This minimally invasive procedure reconstructs the valve at the top of the stomach to treat the chronic acid reflux characteristic of GERD. The system, which includes an endostapler, camera, and ultrasonic sensors, is designed to be operated by a single physician.

SciSparc is not acquiring an unproven concept. Clinical data on MUSE™ suggests it is an effective treatment. One study reported that nearly 78% of patients experienced a significant reduction in GERD symptoms following the procedure. Another found that six months post-treatment, 79% of patients had either reduced or completely stopped their use of common acid-suppressing medications known as proton pump inhibitors (PPIs), with long-term data showing this benefit persists for years in a majority of patients.

However, the competitive landscape is not empty. The MUSE™ system will contend with established GERD devices, most notably the EsophyX® device from EndoGastric Solutions, which is also used for TIF procedures. A comparative study offered a nuanced picture: while both devices improved symptoms, the MUSE™ technique appeared more effective in the long term for a specific subset of patients. The same study, however, raised a critical safety flag, noting that MUSE™-related adverse events, though infrequent, were more severe than those associated with its competitor, with 4.4% being classified as life-threatening. This data point underscores the clinical and marketing challenges SciSparc will face as it introduces the device to new, highly regulated markets.

Replicating Success on a Global Stage

SciSparc's strategy hinges on a key precedent: Xylo Technologies' successful 2019 licensing and distribution agreement with a Shanghai-based company, which included a $3 million upfront payment to bring MUSE™ to the market in Greater China. SciSparc's public plan is to replicate this “proven model” by forging exclusive partnerships with leading regional distributors across North America, Europe, and Latin America to accelerate global commercialization and unlock new revenue.

This franchising of a commercialization model is an ambitious undertaking. While the upfront payment in China signals market interest, the full picture of Xylo's revenue and market penetration there remains opaque. Furthermore, Xylo's own recent corporate maneuvers, including a planned delisting from Nasdaq and a merger, suggest a strategic refocusing that may have motivated the sale of the MUSE™ IP. SciSparc is essentially picking up a promising but divested asset, betting it can succeed where its originator decided to move on.

Navigating the Gauntlet of Global Regulation

The greatest challenge for SciSparc will be navigating the intricate and costly regulatory pathways in its target markets. Success is far from guaranteed and will require significant expertise and capital. In the United States, the Food and Drug Administration (FDA) will require a comprehensive pre-market review. Depending on its classification, the MUSE™ system could require either a 510(k) submission, which demonstrates substantial equivalence to an existing device, or the more rigorous and expensive Premarket Approval (PMA) process reserved for higher-risk devices.

In Europe, the company will face the European Union's notoriously stringent Medical Device Regulation (MDR), which demands robust clinical evidence and post-market surveillance to obtain the essential CE mark for market access. The complexity and backlogs associated with the MDR have delayed market entry for many companies.

Latin America presents its own unique hurdles. In Brazil, the region's largest market, the regulatory body ANVISA classifies devices into four risk categories. A surgical device like MUSE™ would likely be a Class III or IV device, mandating the extensive “Registro” process and the appointment of a local Brazil Registration Holder to manage the submission. Each of these markets requires a tailored approach, deep regulatory knowledge, and a substantial investment of time and money—resources that will test a small pharmaceutical company pivoting into an entirely new industry.