Creso Pharma (ASX: CPH) this morning announced that it will be entering the psychedelic space, the first such listed firm on the ASX to do so. The company is set to acquire Halucenex, a psychedelic-assisted psychotherapy firm based in Canada.
The acquisition will bring the company into the emerging psychedelics sector, which is estimated to be worth up to US$100 billion over the coming years. The firm currently operates a 6,000 square foot medical clinical that is focused on the treatment of mental illnesses, and is located adjacent to an emergency hospital.
Halucenex, which is based in Nova Scotia, has placed its focused on the use of psilocybin in the treatment of treatment resistant depression in individuals suffering from PTSD. The company currently has efforts in researching, developing, and licensing novel psychedelic molecules for use against these indications, with clinical trials currently targeted to begin upon receipt of a Dealers License from Health Canada.
The firm is currently targeting the third quarter of 2021 for the commencement of a phase 2 clinical trial for the indication, with the receipt of the currently pending Dealer’s License expected to be received in the interim. In the mean time, the company has already secured 11.6 grams of synthetic psilocybin, which is to be used for both phase 2 and phase 3 clinical trials.
Finally, the company has an affiliation with Veterans Affairs Canada through its strategic advisor, David Fraser. The affiliation is expected to fast track the subsidiary for revenue through sales into the market.
“This is a major milestone for Creso Pharma and marks our evolution into a broader based pharmaceutical business. Creso will now sell its trusted cannabis products and progress the commercialisation of a range of psychedelic-assisted psychotherapy treatments. Our entry into this market provides the Company with another lucrative vertical and an additional near term revenue stream.”Adam Blumenthal, Non-executive Chairman of Creso Pharma
The acquisition of Halucenex is to take the form of a cash and shares transaction. The transaction will see Creso pay $500,000 in cash, as well as issue 29.3 million common shares of the company. An earn-out provision for a further 17.6 million shares is also in place, based on the Dealer’s License amendment being achieved within twelve months of the closing of the transaction. Creso will also advanced a $250,000 loan to the company, and has agreed to provide $1.0 million in further funding for the firm over the course of the next twelve months.
Creso Pharma last traded at $0.21 on the ASX.
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