Creso Pharma completes acquisition of Canada-based Halucenex, set to enter the US$100 billion psychedelic market
Health & Biotech
Health & Biotech
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The completion of Creso Pharma’s acquisition of Halucenex is set to unlock a number of lucrative opportunities, including the $100 billion dollar market in psychedelic medicines.
Global medicinal cannabis company, Creso Pharma (ASX:CPH), has finally completed the acquisition of Canadian psychedelics company Halucenex Life Sciences, providing it with access to the emerging global market for psychedelic medicines estimated to be worth up to US$100 billion.
Creso had announced the acquisition back in March, and has since been undertaking due diligence, which was completed today.
The acquisition marks an important milestone and will unlock a number of opportunities for Creso in the near term following its potential merger announcement with Canada-based Red Light Holland in June.
“Completing the acquisition of Halucenex is a major milestone for Creso Pharma and we will now aggressively pursue a number of near-term value creation strategies through the subsidiary and in preparation of the proposed merger with Red Light Holland,” said Creso’s non-executive chairman Adam Blumenthal.
The acquisition of Halucenex provides Creso with access to a number of lucrative market verticals.
Halucenex is focused on developing novel psychedelic molecules to treat post-traumatic stress disorder (PTSD), depression and other mental illnesses.
It also operates a 557 square metre medical clinic in Windsor, Nova Scotia, and is working on beginning a Phase II clinical trial this year, evaluating the use of psilocybin (“magic mushrooms”) to alleviate treatment-resistant depression.
Recently, there has been a growing body of evidence demonstrating that psychedelic medicines are safe and non-addictive when used in medical settings.
In a number of clinical trials completed in recent years, psychedelic-assisted psychotherapy has produced some significant, long-lasting clinical outcomes for individuals living with mental health conditions.
Creso says that mental health conditions remain significantly undertreated, with mainstream treatments considered to be ineffective with major side effects.
Surveys have also indicated that less than half of individuals with a mental illness do not receive any form of treatment.
Against this backdrop, Halucenex is currently focusing on its Phase II clinical trials of PAP using psilocybin, with the aim of becoming a clinical drug pipeline provider.
The company will also seek to explore the interactions between natural and synthetic psilocybin derivatives to accumulate intellectual property on the effects of naturally sourced psilocybin.
Halucenex has made progress towards the commencement of the Phase II clinical trial, having completed all USP 61 requirements which provide considerable validation for the use of its GMP grade psilocybin.
The USP 61 test provides enumeration of mesophilic bacteria and fungi that may grow under aerobic conditions. This test provides the total number of aerobic organisms, yeast, and mould present within a sample.
“Recent USP 61 results have highlighted that our GMP grade psilocybin is now validated ahead of a clinical trial,” commented Halucenex founder and CEO, Bill Fleming.
In USP 61 testing, the sample is typically diluted, plated, and then incubated with results used to determine whether or not compounds can be used for human testing.
Halucenex has now completed this testing phase, and will now progress the USP 62 test, which will highlight the shelf life of its psilocybin samples, as well as provide additional validation.
“We expect USP 62 testing to be finalised before the end of the month, which will allow us to take another step towards the commencement of our Phase II clinical trial,” Felming added.
Following completion of these tests, Halucenex will then be positioned to apply for Clinical Trial Authorisation (CTA), and will commence the phase II clinical trial subject to obtaining its Dealer’s License from Health Canada.
The company can also apply for its CTA prior to the receipt of its Dealer’s License, expediting its clinical trial process.
The combined company is expected to have an implied pro forma equity value of C$347 million (A$371 million), and will be listed on the Canadian Securities Exchange under the ticker symbol TRIP.
Red Light Holland is a market leader in recreational psychedelics.
As such, the combined company will focus on several key growth areas, including expanding Red Light’s iMicrodose app and its brand leadership in recreational psilocybin, while crossing over to the cannabis sector.
Creso Pharma will also work closely with Red Light to explore additional opportunities through Halucenex, leveraging the significant pharmaceutical expertise of Creso Pharma and Halucenex’s management team through all applied science activities.
Red Light has recently extended its agreement with Mera Life Sciences, and continues to explore potential investments in St. Vincent and the Grenadines, which is anticipated to become part of the combined company’s applied science platform.
Completion of the merger between Creso and Red Light Holland remains subject to a number of conditions including both Creso and Red Light Holland shareholders’ approval.
This article was developed in collaboration with Creso Pharma, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.