A deal to acquire Health House International will give Creso Pharma another source of revenue, as well as the opportunity to import and distribute medicines containing psilocybin and MDMA.

Creso Pharma (ASX:CPH)’s Scheme of Arrangement to acquire 100% of ASX-listed Health House International (ASX:HHI) is now approved and has become effective.

It follows the announcement on 4 May that the second Supreme Court of Western Australia has made orders to approve the scheme.

The acquisition of HHI is a significant one for Creso Pharma, as it will provide the company with another revenue-generating business unit.

HHI is a company focused on the international distribution of medicinal cannabis, and possesses a number of strategic licenses to store, distribute, import, and export controlled drugs.

HHI has a rapidly strong revenue base, which is set to bolster Creso Pharma’s own growing revenue profile.

In the 3 months ended March 31st, HHI generated $5.95m in cash receipts, which marked a 10.1% increase on the prior quarter, and a 36.4% rise on the pcp.

Combining Creso Pharma’s revenue and HHI cash receipts as a proxy for revenue, the unaudited pro forma revenue for the combined group is $8.26m or over $33m on a last quarter annualised basis.

Creso’s CEO Willam Lay says he’s very pleased to have taken another major step forward for the acquisition of Health House.

“The group has an enviable set of licences which we can use to our immediate benefit, and adds another growing revenue channel to the group,” Lay said.

An opportunity to import

In recent months, Creso Pharma and Health House have been monitoring regulatory changes and exploring a number of opportunities to drive growth in key markets.

This includes the company’s ongoing commitment to advancing a commercial pathway in the Australian market, following the Therapeutic Goods Administration (TGA)’s breakthrough announcement in February.

The TGA announced that medicines containing psilocybin and MDMA for prescription by specifically authorised psychiatrists for the treatment of certain medical conditions would be permissible in Australia from 1 July 2023.

As part of that initiative, Health House has formally lodged applications for state licence amendments to import and distribute medicines containing psilocybin and MDMA for either clinical trial purposes, or certain mental health conditions under authorised psychiatrists.

“The application for an import licence for psychedelics marks another exciting opportunity for Creso Pharma, and we look forward to advancing this initiative to create a first mover advantage in the Australian market,” said Lay.

Creso will also continue to examine the potential to import the finished product from its wholly owned psychedelics subsidiary Halucenex, which is currently conducting ongoing phase II clinical trial testing synthetic psilocybin on symptoms associated with Post Traumatic Stress Disorder (PTSD).

Creso says it will provide updates on the status of the licence update and import process as developments materialise.

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.