Psyence Biomedical has walked away from its planned acquisition of fellow Canadian psilocybin-based biotech Clairvoyant Therapeutics after completing the due diligence process.
When it announced the plans a month ago to pay $500,000 in shares for privately held Clairvoyant, Psyence’s CEO Neil Maresky, M.D., said Clairvoyant’s phase 2-stage alcohol use disorder (AUD) candidate would “nicely” complement Psyence’s own nature-derived psilocybin development program.
Canada-based Clairvoyant is conducting a 154-person phase 2b trial of the synthetic psilocybin-based candidate in AUD in the EU and Canada with top-line results expected in early 2025. Psilocybin is the active ingredient in so-called magic mushrooms.
As well as the $500,000 in shares that Psyence was expected to pay Clairvoyant’s disposing shareholders, Psyence would potentially have been liable for two more share-based payments of $250,000 each based on specific milestones.
But, in a post-market announcement Oct. 4, Maresky revealed that “after completing the specified due diligence process, we unfortunately were not able to close the acquisition of Clairvoyant.” The CEO did not elaborate on what specific issues had been thrown up during the process.
Fierce Biotech has asked Clairvoyant whether the collapse of the sale will impact the biotech’s own plans.
For its part, Maresky said Psyence remains “very enthusiastic” about its own psilocybin candidate, with the Toronto-based company having just begun a phase 2b trial as a potential treatment for patients adjusting to receiving a life-limiting cancer diagnosis, a psychological condition called adjustment disorder. The Nasdaq-listed biotech is also gearing up to study the drug in AUD.
“We will also remain opportunistic in exploring other assets that may fit within our core clinical strategy,” Maresky added in the release.
The collapse of the acquisition is the latest disruption in a psychedelics space that suffered a high-profile blow this summer when the FDA turned down Lykos Therapeutics’ application to use MDMA to treat post-traumatic stress disorder.