Psyence Biomedical Finalizes Acquisition of Psyence Group's Stake in PsyLabs

Psyence Biomedical Ltd. (Nasdaq: PBM) has announced the closing of its acquisition of Psyence Group’s 11.13% stake in PsyLabs, a private company focused on the cultivation and production of psychedelic active pharmaceutical ingredients (APIs) and extracts. This transaction strengthens the strategic partnership between Psyence Biomed and PsyLabs, further consolidating their efforts in developing psychedelic-based therapeutics for mental health and well-being.

PsyLabs specializes in the development and production of nature-derived, pharmaceutical-grade psychedelics. Among their key products is psilocybin, which is being studied for its potential in treating Alcohol Use Disorder (AUD) and other Substance Use Disorders (SUDs). PsyLabs operates under a licensing agreement with Psyence Biomed, granting the latter exclusive worldwide rights to their products for specific applications.

Dr. Neil Maresky, CEO of Psyence Biomed, expressed his satisfaction with the acquisition, noting the benefits of integrating vertically in the development of regulatory-approved psychedelic therapeutics. Tony Budden, CEO of PsyLabs, welcomed Psyence Biomed as a shareholder, emphasizing their ongoing efforts to advance proprietary processes and drug candidates that align with Psyence Biomed's therapeutic pipeline aimed at treating mental health conditions.

Additionally, Psyence Biomed and Psyence Group have finalized a debt-for-equity swap agreement. Under this agreement, Psyence Biomed will issue 845,394 common shares at a price of US$0.50 each to Psyence Group. This exchange discharges the remaining debt owed by Psyence Biomed to Psyence Group from a promissory note dated January 25, 2024. Should the average VWAP of Psyence Biomed shares fall below US$0.50 before January 15, 2025, a "make whole payment" will be required, payable either in cash or additional shares.

Psyence Biomed has committed to register the resale of these common shares within 60 days of their issuance. The debt swap agreement includes standard representations, warranties, and covenants from both parties. The board of directors of Psyence Group has approved the agreement, with interested directors who are also on Psyence Biomed’s board recusing themselves from the decision.

PsyLabs is a significant player in the psychedelic API sector, federally licensed to cultivate and export various psychedelic compounds such as psilocybin, psilocin, mescaline, ibogaine, and dimethyltryptamine (DMT). They have demonstrated the ability to purify natural psilocybin to unprecedented levels using proprietary technologies and are scaling up to commercial production. This work is being supported by a major UK-owned contract manufacturing organization.

Psyence Biomed stands out as one of the few vertically integrated biopharmaceutical companies focusing on psychedelic-based treatments. Listed on Nasdaq, it is dedicated to developing nature-derived psilocybin-based medicines, particularly targeting unmet needs in mental health care. The name "Psyence" reflects the company's commitment to combining psychedelics with scientific innovation to create effective, FDA-approved treatments for a range of mental health disorders.

In summary, the acquisition of PsyLabs shares and the debt-for-equity swap agreement mark significant strategic advancements for Psyence Biomed. These moves are expected to enhance the company's capabilities in developing and commercializing psychedelic-based therapeutics, thereby addressing critical mental health challenges.