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Thursday, Mar 28, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

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Lucy Scientific Discovery sends acquisition proposal to Pasithea Therapeutics

Lucy’s offer of $0.85 per share represents a 142 per cent premium on Pasithea’s share price

Lucy Scientific Discovery sends acquisition proposal to Pasithea Therapeutics
Photo via Lucy Scientific

Lucy Scientific Discovery Inc. (NASDAQ: LSDI) has submitted a proposal to acquire Pasithea Therapeutics Corp. (NASDAQ: KTTA), a firm dedicated to the development of innovative medical solutions.

On Monday the company announced the terms of the offer which include paying $0.60 in cash and $0.25 in Lucy stock for each share of Pasithea common stock. Considering Pasithea’s stock closed at $0.35 per share on June 1, 2023, Lucy’s offer of $0.85 per share represents a staggering 142 per cent premium on Pasithea’s share price. The cash component alone signifies a 71 per cent premium.

Pasithea’s latest quarterly report shows approximately $30 million in cash reserves. Given the significant market value discount to its net cash, Lucy believes its attractive offer will immediately create value from the cash portion, with additional upside potential through Lucy’s stock as it carries out its business plan. To conserve cash for shareholders, Lucy plans to explore strategic alternatives for the divestiture of Pasithea’s clinical development program.

Pasithea’s 30-day average daily dollar trading volume stands at a modest $16,000. In contrast, Lucy is a highly active NASDAQ company with an average daily dollar trading volume exceeding $1.8 million. This is over 100 times the dollar volume of Pasithea’s trading and could significantly enhance liquidity for its shareholders.

Lucy has made it clear that if the proposal is not approved by Pasithea’s Board of Directors, it is ready to present the offer directly to Pasithea’s shareholders. This move underscores Lucy’s commitment to the acquisition and its belief in the potential value it can bring to both companies’ stakeholders.

The proposed acquisition signifies a strategic move in the biotechnology industry, and all eyes will be on Pasithea’s response to this lucrative offer.

Read more: Lucy Scientific partners with TheraPsil to facilitate patient access to psilocybin

Read more: Lucy Scientific and Wesana Health partner to develop CBD and psilocybin-based drug

Mid-May, the company announced a partnership with the psychedelics non-profit Therapsil to streamline access to medical psilocybin in Canada. The partnership will involve offering compassionate care with psychedelic-assisted therapy while collecting live data to support research.

Last February, Lucy announced filed an application to amend its current dealer license with Health Canada so it can manufacture heroin and cocaine. The move is intended to reduce harm from low-grade drugs that have been cut with other substances, particularly fentanyl, and to offer a safe supply to harm reduction programs globally.

 

natalia@mugglehead.com

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