Lucy Scientific Discovery Inc. (NASDAQ: LSDI) and Wesana Health Holdings Inc. (CSE: WESA) (OTCQB: WSNAF) are joining forces to develop a CBD and psilocybin-based drug intended to treat migraines, cluster headaches, trigeminal neuralgia (facial pain) and major depressive disorder (MDD).
The companies announced the agreement on Tuesday and Lucy will be providing Wesana with one million common shares and $570,000 in cash in exchange for ownership of the drug “SANA-013.”
Lucy will also be acquiring Wesana’s supply of psilocybin through the agreement and believes it will be sufficient for the completion of all near-term clinical studies.
Lucy says the novel combination of CBD and psilocybin enables both drugs to effect the brain through different but complementary pathways. More specifically, SANA-013 is thought to be efficacious because it rewires neuron connections in the brain and has a powerful anti-inflammatory effect, thereby also functioning as an anti-depressant.
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Wesana’s CEO will join Lucy’s executive team to help develop SANA-013
The transaction is subject to approval from Wesana’s shareholders and is expected to close in the second quarter of this year. Over 66.66 per cent of those shareholders will need to vote in favour of the transaction before it can conclude.
“We are committed to evolving our drug development capabilities which positions us well for continued success and value creation,” said Richard Nanula, Lucy’s Executive Chairman.
One of the transaction’s conditions is that Wesana’s CEO Dan Carcillo will be joining Lucy’s executive team in order to help facilitate further development of SANA-013 with the first in-human trials expected to begin late this year.
“I am thrilled to join Lucy’s senior management team and further my personal mission to find more effective treatments for the tens of millions of individuals suffering from mental health disorders including depression,” said Carcillo.
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Lucy applied to produce cocaine and heroin in February
Lucy announced in mid-February that it applied to amend its dealers license with Health Canada to manufacture cocaine and heroin. The announcement was followed by Adastra Holdings Ltd. (CSE: XTRX) (FRA: D2EP) receiving approval to manufacture cocaine, which received negative attention from media, Prime Minister Justin Trudeau and B.C. Prime Minister David Eby.
Lucy provided an update regarding that application on March 8 to clarify that production of those drugs would be for harm reduction programs and research purposes only.
“In response to recent media reports in Canada, Lucy Scientific is pleased to restate clearly that our plans to develop any psychedelic drugs or controlled substances are for health and research purposes only,” read the release from Lucy.
“Any handling, processing and distribution of these products are conducted within the tight limitations of our various licenses with Health Canada. Lucy does not contemplate making these products available to members of the general public.”
Lucy’s stock dropped by 4.47 per cent Wednesday to US$1.39 on the Nasdaq Exchange and Wesana’s stock rose by 6.67 per cent to $0.08 on the Canadian Securities Exchange.