Psyence Biomed Enters Into $25 Million Common Stock Purchase Agreement with White Lion Capital, LLC

Rhea-AI Summary

Psyence Biomedical (Nasdaq: PBM) has entered into a $25 million common stock purchase agreement with White Lion Capital, This 24-month agreement allows Psyence Biomed to sell up to $25 million in shares to White Lion, subject to certain conditions. The purchase price will be 90% of the lowest VWAP for Fixed Purchase Notices and the lowest traded price for Rapid Purchase Notices. White Lion has agreed not to engage in short selling Psyence Biomed's shares. The agreement can be terminated by Psyence Biomed at any time without penalty.

This funding will support Psyence Biomed's upcoming Phase IIb clinical trial of nature-derived, non-synthetic psilocybin for Adjustment Disorder in Palliative Care, as well as earlier-stage programs in other indications.

Positive

• Access to $25 million in potential funding over 24 months
• Flexibility to sell shares at 90% of lowest VWAP or lowest traded price
• No warrants, derivatives, or other share classes associated with the agreement
• Agreement can be terminated by Psyence Biomed without penalty
• Funding to support upcoming Phase IIb clinical trial and earlier-stage programs

Negative

• Potential dilution of existing shareholders' stock
• Share price may be negatively impacted by selling at discounted rates
• Dependence on external funding for clinical trials and program advancement

Insights

Financial Analyst

Psyence Biomed's $25 million common stock purchase agreement with White Lion Capital is a significant development that could provide important funding for the company's clinical trials and research programs. The flexible nature of this agreement, allowing Psyence to sell shares at its discretion over a 24-month period, offers a strategic advantage in managing cash flow. However, investors should be aware of potential dilution risks.

The pricing mechanism, set at 90% of the lowest VWAP for Fixed Purchase Notices and the lowest traded price for Rapid Purchase Notices, suggests a discount to market prices. While this may be attractive for White Lion, it could put downward pressure on the stock price. The absence of warrants or derivatives is a positive aspect, simplifying the deal structure.

Psyence's ability to terminate the agreement without penalty provides a safety net, but the issuance of shares as a commitment fee represents an immediate dilution. The company's focus on using these funds for its Phase IIb clinical trial in Adjustment Disorder treatment and other research programs indicates a clear strategic direction, which could be viewed positively by the market if these initiatives show promise.

Overall, while this agreement provides Psyence with financial flexibility, investors should closely monitor the company's use of this facility and its impact on share price and dilution over time.

Medical Research Analyst

Psyence Biomed's focus on nature-derived, non-synthetic psilocybin for Adjustment Disorder in Palliative Care is an intriguing approach in the burgeoning field of psychedelic medicine. The progression to a Phase IIb clinical trial signifies that earlier studies have shown promise, warranting further investigation. This is a critical juncture for the company, as Phase II results often determine whether a drug candidate advances to larger, more expensive Phase III trials.

The choice of Adjustment Disorder in the Palliative Care context is noteworthy. This condition, characterized by emotional or behavioral symptoms in response to an identifiable stressor, is particularly relevant in end-of-life care. Traditional treatments often have limitations and if Psyence's psilocybin-based approach proves effective, it could represent a significant advancement in patient care.

However, investors should be aware that psychedelic research, while promising, is still in its early stages. Regulatory hurdles and potential stigma associated with psychedelic compounds could pose challenges. The company's mention of "additional high-need indications" suggests a broader research pipeline, which could diversify risk but also stretch resources.

The success of Psyence Biomed will largely depend on the outcomes of this Phase IIb trial and subsequent studies. Positive results could position the company as a leader in a new therapeutic approach, while negative outcomes could significantly impact its prospects.

NEW YORK, July 31, 2024 (GLOBE NEWSWIRE) -- Psyence Biomedical Ltd. (Nasdaq: PBM) (“Psyence Biomed” or the “Company”) today announced that it has entered into a $25 million common stock purchase agreement (the “Purchase Agreement”) with White Lion Capital, LLC, (“White Lion”) a California-based institutional investor focused on high-growth, early-stage public companies.   

Psyence Biomed will have the option, but not the obligation, to sell to White Lion up to $25.0 million in shares of common stock over a 24-month period subject to certain conditions, including a registration statement being filed and declared effective by the SEC.

The price to be paid by White Lion for any shares that Psyence Biomed requires White Lion to purchase will depend on the type of purchase notice that the Company delivers. For shares being issued pursuant to a Fixed Purchase Notice, the purchase price per share will be equal to 90% of the lowest VWAP of the common stock that occurs during the Fixed Purchase Valuation Period. For shares being issued pursuant to a Rapid Purchase Notice, the purchase price per share will be equal to the lowest traded price of the Common Stock on the Rapid Purchase Notice Date. There are no upper limits to the price White Lion may pay to purchase common stock from Psyence Biomed.

White Lion has agreed not to engage in any manner of short selling Psyence Biomed’s shares of common stock. No warrants, derivatives, or other share classes are associated with this agreement. In consideration for entering into the agreement, Psyence Biomed has issued shares of common stock to White Lion as a commitment fee. The Purchase Agreement may be terminated by Psyence Biomed at any time, at its sole discretion, without any additional cost or penalty.

“This agreement with White Lion Capital provides us with access to critical funding as we rapidly approach initiation of our Phase IIb clinical trial of nature derived, non-synthetic psilocybin as a potential treatment for Adjustment Disorder in the Palliative Care context, while in parallel advancing earlier stage programs in additional high-need indications,” said Dr. Neil Maresky, Chief Executive Officer of Psyence Biomed. “We welcome White Lion to our roster of shareholders, and we are grateful for their support.”

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.  

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, or 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. The Company 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 commencement of the clinical trial referred to in this news release, the safety and effectiveness of psilocybin as a treatment option for adjustment disorder within the context of Palliative Care, and the Company exercising its discretion to utilise the ELOC. These forward-looking statements are based on a number of assumptions, including the assumption that the anticipated shipment of the drug candidate, PEX010, will be successfully delivered to Australia, Psyence Australia Pty Ltd. (“Psyence Australia”), the Company’s Australian subsidiary, will receive all such regulatory and other approvals as may be required to implement the clinical trial, that patient recruitment will be successful in accordance with the expected timelines, and that the Company will satisfy all of the Equity Conditions and other conditions contained in the Purchase Agreement to utilise the ELOC.

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 ability of iNGENū to execute its obligations in respect of the clinical trial; (ii) changes in applicable laws which may impact the clinical trial and/or the conducting thereof; (iii) Psyence Australia’s ability to achieve successful clinical results; (iv) Psyence Biomed’s ability to obtain regulatory approval for its product candidates, and any related restrictions or limitations of any approved products; (v) Psyence Biomed’s ability to obtain licensing of third-party intellectual property rights and supply of raw materials for future discovery and development of its product candidates; (vi) the ability of Psyence Biomed to maintain the listing of its common shares and warrants on Nasdaq; and (vii) 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, initially filed by the Company with the SEC on February 9, 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.

FAQ

What is the value of Psyence Biomed's (PBM) stock purchase agreement with White Lion Capital?

Psyence Biomed (PBM) has entered into a $25 million common stock purchase agreement with White Lion Capital,

How long is the duration of Psyence Biomed's (PBM) agreement with White Lion Capital?

The agreement between Psyence Biomed (PBM) and White Lion Capital has a duration of 24 months.

What is the purchase price for Psyence Biomed (PBM) shares under the Fixed Purchase Notice?

Under the Fixed Purchase Notice, White Lion Capital will purchase Psyence Biomed (PBM) shares at 90% of the lowest VWAP during the Fixed Purchase Valuation Period.

What clinical trial is Psyence Biomed (PBM) planning to initiate with the funding?

Psyence Biomed (PBM) is planning to initiate a Phase IIb clinical trial of nature-derived, non-synthetic psilocybin for Adjustment Disorder in the Palliative Care context.