Canada-based Psyence Biomed has completed a merger with Newcourt Acquisition Corp. (NASDAQ: NCAC), making the palliative care-focused psychedelics company publicly traded in the United States.
Psyence Biomed is a subsidiary of the Canadian biotech company Psyence Group Inc. Psyence is publicly traded on the Canadian Securities Exchange and has made natural psychedelic products the focus of its business. The company’s name combines the words “psychedelic” and “science,” and its footprint includes operations in Canada, the United States, the United Kingdom, Australia and some southern African countries.
The company expects to receive a minimum of $20 million in cash held in trust through the transaction.
“This merger represents a pivotal moment for Psyence as we continue our journey to redefine health and wellness,” Dr. Neil Maresky, CEO of Psyence Biomed, said in a statement. “The NASDAQ listing, as well as the capital infusion, expands our presence to additional investors in North America and will empower us to accelerate our clinical trials and contribute to advancements in the global health and wellness landscape.”
Newcourt is a special purpose acquisition company (SPAC). As a SPAC, Newcourt was established for the explicit purpose of pursuing a merger, share purchase of exchange, asset acquisition or combination with other businesses.
Current Newcourt shareholders would transition to owning stock in the combined company after the deal closes, which is expected to occur in the second half of 2023, pending customary regulatory and shareholder approvals.
The deal reflects the growing interest among the health care and business communities in the therapeutic potential of psychedelics, such as psilocybin, MDMA and LSD.
As of January 2022, 50 publicly traded companies have emerged in the United States that seek to market psychedelic therapies, including three valued at more than $1 billion, a JAMA Network study found. The authors cited projections that the U.S. market for those substances would reach $10.75 billion by 2027, up from $2 billion in 2020.
The transaction follows a series of regulatory developments in the United States and Canada.
The Canadian government, for example, has permitted companies to apply for a license to manufacture certain psychedelics for research purposes.
In the United States, the Food and Drug Administration (FDA) in 2018 designated psilocybin as a “breakthrough therapy” for major depressive disorder, which paved the way for expanded clinical trials. The prior year, the FDA made a similar decision regarding MDMA as a treatment for post-traumatic stress disorder.
“The FDA’s designation of psilocybin as a ‘Breakthrough Therapy’ is extremely encouraging, and the large body of data that is being generated from recent psilocybin research and clinical trials serves to significantly enhance the company’s prospects of progressing successfully through its clinical trial,” Newcourt CEO Marc Balkin said in a Jan. 2023 statement. “We believe that Psyence Biomed has a strong team led by Dr. Maresky, and that there will likely be very strong demand for its botanically-based psilocybin treatments.”