Potential for psychedelic treatments prompts big North American buyouts

Interest in psychedelic drugs and treatments continues to grow, as evidenced by three major takeovers in Canada and the USA.

One takeover of a psilocybin and DMT drug developer is valued at $23m, while a $10m deal between two North American firms is claimed to create the largest psychedelic health provider in the US. A Canadian life sciences firm also paid $8.9m to buy a researcher focused on developing psychedelic treatments for neurodegenerative and mental disorders.

Last month Enveric Bioscience, based in Naples, Florida, closed the acquisition of major US psychedelic drugs firm MagicMed, initially announced in May 2021; the deal was valued at $23m and conducted via an all-stock transaction of just under 10m shares.

Enveric researches the efficacy of cannabinoids to treat cancer-related disorders, while MagicMed is currently studying novel molecules derived from psilocybin and DMT, the active ingredient in ayahuasca.

MagicMed agreed to the takeover to garner further access to capital through Enveric’s listing on the Nasdaq exchange. “It’s a really exclusive group listed on the Nasdaq, and that access to capital is going to be a game-changer for everybody,” said Joseph Tucker, founder of MagicMed and the new CEO of Enveric.

Through the acquisition, Enveric will gain a new drug discovery research and development arm with a strong focus on psychedelic drugs and cannabinoids. “The way that we see this is very complementary,” said Tucker. “We’ve got this whole drug development and early-discovery side which makes a lot of great potential drug candidates, but we don’t have this later stage clinical trial capability.

“We’re kind of like two halves of one company.”

The new Enveric will be advancing a molecule discovered by MagicMed for the treatment of post-traumatic stress disorder (PTSD) in cancer patients, with the possibility of eventually applying it to research around military veterans suffering from PTSD.


Biggest in the US?


Meanwhile, Canadian psychedelic wellness platform Delic is claiming that it is now the largest psychedelic health provider in the US, following its recent acquisition of a chain of ketamine infusion treatment centres in the US for $10m.

Delic was already operating two ketamine infusion clinics in California and Arizona and has now acquired a further ten from Ketamine Wellness Centers (KWC), which has branches in Arizona, Colorado, Florida, Illinois, Minnesota, Nevada, Texas, and Washington state.

Delic expects to open a further 15 clinics across the US over the coming 18 months, offering psychedelic treatment for pain, as well as a variety of mental health conditions.

Describing the merger as “a game changer for the future of health and psychedelic wellness in America”, Delic co-founder and CEO Matt Stang said “KWC is the leading and largest network of trusted health clinics operating in our space, and we have architected Delic to scale their efforts and contribute to their position through our existing portfolio of clinics and media properties, which can drive patient count and demand”.

In addition to ketamine infusions, the clinics expect to work with MDMA and psilocybin in the near future.


Psychedelic pharma


Nearly reaching the same value is the acquisition of Canadian psychedelic pharmaceutical company Lucid Psycheceuticals by life sciences firm FSD Pharma for approximately CAD$11.3m (US$8.9m) in FSD Pharma stock.

Lucid Psycheceuticals focuses on the development of therapies to treat critical neurodegenerative diseases, while FSD Pharma is developing a “diversified pipeline of novel, patent-protected drug candidates”, which will be used to target therapies for mental health disorders and neurodegenerative diseases.

The research will be led by Lucid’s co-founder Lakshmi Kotra, who said: “Lucid recently licensed novel compounds from University Health Network for the potential treatment of neurodegenerative disorders, such as multiple sclerosis, and is also developing a psychedelics-class of compounds for mental health disorders. These add to the current anti-inflammatory pipeline under development at FSD.

“As we move forward, we will be adding complementary expertise to the company’s team, as well as partnering with experienced organisations globally. We are laser-focused on completing advanced pre-clinical studies and scale-up activities, to successfully move FSD Pharma’s assets through the clinical trials.”

Kotra added: “This transformative transaction is a mutually synergistic step toward addressing total brain health, and the company’s team is excited at the new possibilities and therapeutics.”

– Lorraine Mullaney CBD-Intel staff

Photo: Therapeutic Shroom

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