Psyence and PsyLabs share exchange to boost ibogaine research

Psyence and PsyLabs collaborate on ibogaine research

Psyence Biomedical Ltd. (PBM) has announced a strategic share exchange with Psyence Labs Ltd. to advance their ibogaine research program in the United States. This initiative, revealed on Wednesday, includes a significant cash investment aimed at bolstering the development of ibogaine as a treatment for opioid use disorder (OUD).

Details of the share exchange

The agreement involves a cash investment of $5 million from Psyence to PsyLabs. This includes an immediate commitment of $2.4 million for the purchase of 936 ordinary shares of PsyLabs at a price of $2,564 per share. Additionally, there is a backstop commitment of up to $2.6 million, which will be used to subscribe for shares not taken up by PsyLabs shareholders, potentially in two milestone payments of $1.3 million each. This commitment is valid until December 31, 2026, after which Psyence is not obligated to fulfill it if not utilized.

Share-for-share exchange terms

The companies have also agreed to a share-for-share exchange, each valued at $9 million. Under this arrangement, Psyence will issue 1,497,500 shares at $8.99 per share to PsyLabs, while PsyLabs will issue 3,473 shares at the same price to Psyence. This exchange is contingent on completion by November 30, 2026, failing which the transaction will be terminated. Upon successful completion, PsyLabs could own 49.89% of Psyence's ordinary shares, while Psyence would hold 41.13% of PsyLabs.

Why it matters

This collaboration is crucial for the manufacture of pharmaceutical-grade ibogaine, which is necessary for clinical trials targeting OUD. The establishment of the Texas Ibogaine Research Center (TIRC) by Psyence underscores the importance of this initiative. The center aims to enhance the production of ibogaine, a neuroplastogen, for upcoming clinical trials in Texas.

Market response

Following the announcement, Psyence's stock rose by 7.30%, trading at $6.55. This reflects investor confidence in the potential of ibogaine as a therapeutic option for OUD.

This strategic move by Psyence and PsyLabs highlights the growing interest and investment in alternative treatments for opioid addiction, a pressing public health issue.