Psyence Biomed Announces the Signing of a Conditional Binding Term Sheet for the Acquisition of Psilocybin-Based Drug Developer Clairvoyant

Rhea-AI Summary

Psyence Biomedical (Nasdaq: PBM) has entered into a conditional binding term sheet to acquire Clairvoyant Therapeutics Inc, a Canadian clinical-stage developer of psilocybin-based therapeutics. The acquisition involves issuing US$500,000 in PBM common shares upon closing, with potential additional payments of up to US$500,000 based on milestones. PBM will also advance up to US$1,800,000 to settle Clairvoyant's liabilities.

Clairvoyant is currently conducting a Phase IIb clinical trial evaluating a synthetic psilocybin candidate for Alcohol Use Disorder (AUD). The trial has enrolled and treated 154 randomized double-blinded subjects, with topline results expected in early 2025. This acquisition could expand PBM's pipeline into AUD treatment and potentially transition the company to a commercial-stage, revenue-generating entity.

Positive

• Acquisition expands PBM's pipeline with a synthetic psilocybin-based candidate for AUD treatment
• Phase IIb clinical trial for AUD treatment is already in progress with 154 subjects enrolled
• Topline results from the AUD study expected in early 2025
• Potential to transition PBM to a commercial-stage, revenue-generating company
• Complementary to PBM's existing nature-derived psilocybin development program

Negative

• Issuance of US$500,000 in common shares may lead to dilution for existing shareholders
• Additional potential payments of up to US$500,000 based on milestones
• PBM to advance up to US$1,800,000 to settle Clairvoyant's liabilities
• Acquisition completion subject to various conditions, including due diligence and regulatory approvals

Insights

Pharmaceutical Industry Analyst

This acquisition marks a strategic move for Psyence Biomed, potentially accelerating their path to becoming a commercial-stage company. The deal structure, with an initial $500,000 in shares and up to $500,000 in milestone payments, appears favorable for Psyence, limiting upfront costs while gaining access to Clairvoyant's advanced clinical program.

The ongoing Phase IIb trial for Alcohol Use Disorder (AUD) is a significant asset, with topline data expected in early 2025. If successful, this could position Psyence as a frontrunner in psychedelic-based therapeutics. The $1.8 million commitment to fund trial costs suggests confidence in the potential outcomes.

However, investors should note that success is not guaranteed and the regulatory pathway for psychedelic-based treatments remains uncertain. The acquisition's true value will heavily depend on the Phase IIb results and subsequent regulatory decisions.

Clinical Psychiatrist

The potential of psilocybin in treating Alcohol Use Disorder (AUD) is promising, especially given the significant treatment gap in this area. With only 1% of AUD patients seeking drug therapy, there's a substantial unmet medical need.

Previous studies showing an 83% average reduction in alcohol consumption with psilocybin-assisted psychotherapy are encouraging. However, it's important to await the results of this larger, more rigorous Phase IIb trial. The double-blind, placebo-controlled design adds credibility to the study.

If successful, this treatment could revolutionize AUD therapy, offering a new approach with potentially better efficacy and compliance than current options. Nevertheless, careful consideration of safety profiles and long-term effects will be essential before widespread adoption.

Market Research Analyst

The market potential for an effective AUD treatment is substantial. With 15% of adult drinkers in the EU, Canada and the UK at risk for AUD - representing 50 million people - the addressable market is significant. Current treatments suffer from modest efficacy and poor compliance, creating an opportunity for innovative therapies.

However, the adoption of psychedelic-based treatments may face hurdles, including regulatory challenges and potential stigma. Psyence will need to navigate these carefully. The company's dual focus on synthetic and nature-derived psilocybin could provide flexibility in addressing different markets and regulatory environments.

If successful, this acquisition could position Psyence as a leader in a potentially lucrative new market segment, but investors should be aware of the speculative nature of this early-stage pharmaceutical development.

Clairvoyant currently executing a fully randomized multi-country Phase IIb clinical trial evaluating a synthetic psilocybin candidate as a potential therapeutic for Alcohol Use Disorder (AUD)

Topline data from the ongoing Phase IIb AUD study anticipated in early 2025

NEW YORK, Sept. 06, 2024 (GLOBE NEWSWIRE) -- Psyence Biomedical Ltd. (Nasdaq: PBM) (“Psyence Biomed” or the “Company”) today announced that the Company has entered into a conditional binding term sheet with privately-held Clairvoyant Therapeutics Inc (“Clairvoyant”), a clinical-stage developer of psilocybin-based therapeutics based in Canada, for the proposed acquisition by Psyence Biomed of 100% of the shareholdings of Clairvoyant (the “Proposed Acquisition”). As consideration for the Proposed Acquisition, Psyence Biomed will issue US$500,000 of the Company’s common shares upon closing to Clairvoyant’s disposing shareholders, followed by potentially up to two share-based payments of US$250,000 each (payable in cash or common shares, at the Company’s election) upon the achievement of pre-specified milestones by December 2026. In addition, Psyence Biomed will advance funds in tranches of up to US$1,800,000 in aggregate to Clairvoyant in order to settle its liabilities, which consist primarily of clinical trial costs.

Clairvoyant is currently executing a Phase IIb clinical trial (CLA-PSY-201) of a synthetic psilocybin-based candidate as a potential treatment for Alcohol Use Disorder (AUD). The company has completed the enrollment and treatment of 154 randomized double blinded subjects and topline results are anticipated in early 2025.

“The proposed acquisition of Clairvoyant makes strategic sense for us for several reasons,” said Dr. Neil Maresky, Chief Executive Officer of Psyence Biomed. “First, it introduces a synthetic psilocybin-based therapeutic candidate that nicely compliments our ongoing nature-derived psilocybin development program that we are advancing in Adjustment Disorder following a life limiting cancer diagnosis in the Palliative Care context. Additionally, this proposed acquisition may expand our pipeline into another high-value indication – AUD – with a regulatory pathway that could potentially transition us to a commercial-stage, revenue-generating company.”

“With this proposed acquisition, we would have line-of-sight to two important Phase II data read-outs that, if successful, would position us as a leader in the development of psychedelic-based therapeutics to treat a range of underserved mental health and related disorders that are in need of effective new treatment options,” Dr. Maresky concluded.

“We are very pleased to join forces with Psyence Biomed as we move ahead with our ‘speed to market’ strategy for psilocybin in AUD,” stated Damian Kettlewell, Chief Executive Officer of Clairvoyant. “AUD has the widest treatment gap among all mental health disorders; while 15%^1,2,3 of adult drinkers in the EU, Canada and the UK – 50 million people – are considered to be at risk for AUD, fewer than 1%^4,5 seek any form of drug therapy, and currently approved therapeutics are plagued by modest efficacy and poor compliance.”

Mr. Kettlewell added, “Importantly, prior academic studies, including one study by NYU Langone published in JAMA Psychiatry in 2022⁶, found that psilocybin-assisted psychotherapy resulted in an 83% average reduction in alcohol consumption. As well, a study of psilocybin therapy for AUD from August 2024 showed that a single psilocybin dose was safe and effective in reducing alcohol consumption in AUD patients⁷. These two studies suggest that there is very strong scientific rationale for continued development in this indication.”

“We look forward to topline data in early 2025 that, if positive, could accelerate development plans to approval.”

Clairvoyant’s Phase IIb clinical trial is a 24-week, multi-center, randomized, double-blind, placebo-controlled, parallel-group study evaluating two administrations of 25mg psilocybin (at weeks five and nine) in conjunction with psychotherapy compared to placebo. Twelve study sites in E.U. and Canada are participating in the trial, which randomized 154 subjects with a moderate to severe diagnosis of AUD as measured by Diagnostic and Statistical Manual of Mental Disorders, 5th Edition (DSM-5) criteria using Structured Clinical Interview for DSM-5 by the investigator. All study subjects expressed a desire to reduce or stop alcohol consumption.

The Proposed Acquisition shall be subject to the conclusion of a definitive share purchase agreement between the parties based on the salient terms set out in the binding term sheet. The completion of the Proposed Acquisition is subject to several suspensive conditions, including board approval, regulatory strategy approvals, and satisfactory due diligence, as well as such other customary closing conditions.

For more information on the Clairvoyant Phase II trial: https://clinicaltrials.gov/study/NCT05646303

About Psyence Biomed

Psyence Biomedical Ltd. (Nasdaq: PBM) is the world’s first life science biotechnology company focused on the development of botanical (nature-derived and non-synthetic) psilocybin-based psychedelic medicine to be listed on Nasdaq. The name “Psyence” combines the words “psychedelics” and “science” to affirm Psyence Biomed’s commitment to an evidence-based approach to innovation as it works to develop safe and effective, nature-derived psychedelic therapeutics to treat a broad range of mental health disorders. Psyence is initially focused on mental health disorders in the context of Palliative Care.

Learn more at www.psyencebiomed.com and on LinkedIn.

Contact Information

Email: ir@psyencebiomed.com
Media Inquiries: media@psyencebiomed.com
General Information: info@psyencebiomed.com
Phone: +1 416-477-1708

Investor Contact:
Jeremy Feffer
Managing Director
LifeSci Advisors
jfeffer@lifesciadvisors.com

Forward Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning.

Forward-looking statements in this communication include statements regarding the conclusion of a definitive agreement to the satisfaction of the parties, the fulfilment of the conditions to the closing of the Proposed Acquisition, access to the capital and liquidity required for Psyence Biomed to execute on the AUD strategy and Clairvoyant’s ability to successfully conduct its trial and deliver its intended drug product to patients. These forward-looking statements are based on a number of assumptions, including the assumptions that the parties will obtain all such regulatory, corporate, shareholder and other approvals as may be required to implement the Acquisition, the continuation of the clinical trial referred to in this news release on schedule, and the safety and effectiveness of psilocybin as a treatment option for AUD.

There are numerous risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among others: (i) the inability to complete the Acquisition; (ii) the inability to recognize the anticipated benefits of the proposed Acquisition (iii) the ability of CRO to execute its obligations in respect of the clinical trial; (iv) changes in applicable laws which may impact the clinical trial and/or the conducting thereof; (v) Clairvoyant’s ability to achieve successful clinical results; (vi) Psyence Biomed’s ability to obtain regulatory approval for the proposed product candidate, and any related restrictions or limitations of any approved products; (vii) the ability of Psyence Biomed to maintain the listing of its common shares and warrants on Nasdaq; and (viii) volatility in the price of the securities of Psyence Biomed due to a variety of factors, including changes in the competitive and highly regulated industries in which Psyence Biomed operates, variations in performance across competitors, changes in laws and regulations affecting Psyence Biomed’s business and changes in Psyence Biomed’s capital structure. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Registration Statement on Form F-1 filed by the Company with the SEC on August 19, 2024 and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Actual results and future events could differ materially from those anticipated in such information. Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except as required by law, the Company does not intend to update these forward-looking statements.

The Company makes no medical, treatment or health benefit claims about the Company’s proposed products. The U.S. Food and Drug Administration, Health Canada or other similar regulatory authorities have not evaluated claims regarding psilocybin, psilocybin analogues, or other psychedelic compounds or nutraceutical products. The efficacy of such products has not been confirmed by approved research. There is no assurance that the use of psilocybin, psilocybin analogues, or other psychedelic compounds or nutraceuticals can diagnose, treat, cure or prevent any disease or condition. Vigorous scientific research and clinical trials are needed. The Company has not conducted clinical trials for the use of its proposed products. Any references to quality, consistency, efficacy, and safety of potential products do not imply that the Company verified such in clinical trials or that the Company will complete such trials. If the Company cannot obtain the approvals or research necessary to commercialize its business, it may have a material adverse effect on the Company’s performance and operations.

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¹ Global Alcohol Report. World Health Organization. 2018
² Alcohol Use is on the Rise, but Doctors Too Often Fail to Treat it, NY Times, July 12, 2021
³ Alcohol Use Disorders. Carvalho, A.F., et al., 394: 781-792. Lancet. 2019
⁴ Strategies to Implement Alcohol Screening and Brief Intervention in Primary Care Settings: A Structured Literature Review. Williams EC et al. Psychol Addict Behav. 2011;25(2):206-214.
⁵ Morgan Stanley, Counterpoint Global Insights Psychedelics. Retrieved from: https://psychedelicalpha.com/wp-content/uploads/2022/08/Morgan-Stanley-Psychedelics.pdf
⁶ JAMA Psychiatry. doi:10.1001/jamapsychiatry.2022.2096. Published online August 24, 2022
⁷ https://www.researchsquare.com/article/rs-4947184/v1

FAQ

What is the value of Psyence Biomed's acquisition of Clairvoyant Therapeutics?

Psyence Biomed (PBM) will issue US$500,000 in common shares upon closing, with potential additional payments of up to US$500,000 based on milestones. PBM will also advance up to US$1,800,000 to settle Clairvoyant's liabilities.

What is the focus of Clairvoyant's Phase IIb clinical trial?

Clairvoyant's Phase IIb clinical trial is evaluating a synthetic psilocybin-based candidate as a potential treatment for Alcohol Use Disorder (AUD).

When are the topline results expected from Clairvoyant's AUD study?

The topline results from Clairvoyant's Phase IIb clinical trial for AUD treatment are anticipated in early 2025.

How many subjects are enrolled in Clairvoyant's Phase IIb AUD study?

Clairvoyant has completed the enrollment and treatment of 154 randomized double-blinded subjects in their Phase IIb clinical trial for AUD.

What is the potential impact of this acquisition on Psyence Biomed's (PBM) business?

The acquisition could expand PBM's pipeline into AUD treatment and potentially transition the company to a commercial-stage, revenue-generating entity, positioning it as a leader in psychedelic-based therapeutics for mental health disorders.