Psyence BioMed enters US ibogaine term sheet with up to US$1.3M milestones

The United States is the territory covered by a binding ibogaine licence term sheet announced Sept. 28, which will lapse unless a definitive agreement is signed by Nov. 30. Psyence Biomedical Ltd. NASDAQPBM said its wholly owned Texas Ibogaine Research Corporation subsidiary, or TIRC, would pay Psyence Labs Ltd. up to approximately US$1.3 million in development and regulatory milestones for the first drug candidate.

The milestone money would flow to PsyLabs as development and regulatory steps are met. The release lists no upfront payment to Psyence; TIRC would instead receive access to PsyLabs' ibogaine know-how and proposed exclusive U.S. development, supply and distribution rights.

Psyence shares on NASDAQPBM closed at US$5.56 at 4 p.m. EDT on Sept. 25, before the Sept. 28 announcement.

The proposed rights have a Nov. 30 deadline, but they do not set a clinical start date. Psyence said manufacturing, nonclinical and regulatory work must come before TIRC can propose any U.S. clinical investigation.

PsyLabs Would Supply the U.S. Programme

PsyLabs would license TIRC its trade secrets, cultivation and processing methods, and technical and regulatory documents relating to pharmaceutical-grade ibogaine hydrochloride. PsyLabs would be the exclusive supplier, while TIRC would be its exclusive U.S. wholesaler and distributor. PsyLabs retains rights outside the United States.

TIRC would also pay an annual exclusivity fee starting on the first anniversary of the first FDA approval, with the fee creditable against royalties. A low single-digit percentage royalty would apply to net sales of each drug candidate, alongside margin sharing on resales of PsyLabs product. The Sept. 28 release does not quantify the annual fee or resale margin.

The term sheet conditions TIRC's exclusivity on sourcing all its U.S. ibogaine needs from PsyLabs, subject to supply-failure rights. Minimum development or sales thresholds are expected in the definitive agreement but were not specified on Sept. 28.

"This term sheet is intended to give TIRC a defined position in U.S. ibogaine development, backed by access to PsyLabs’ material, manufacturing know-how and technical documentation," Psyence chief executive Jody Aufrichtig said in the Sept. 28 release.

Texas Trial Remains Under Evaluation

PsyLabs is also a significant Psyence shareholder. In a Sept. 23 investment release, Psyence said PsyLabs held approximately 30.22 per cent of its shares, while Psyence held approximately 29.17 per cent of PsyLabs before proposed transactions. Psyence had separately committed US$2.4 million toward a PsyLabs financing and agreed to a reciprocal share exchange valued at about US$9 million on each side.

That Sept. 23 release said Psyence was evaluating the feasibility and design of a potential ibogaine trial for opioid use disorder in Texas. Protocol development, funding, regulatory authorization, institutional approvals and site selection would still be required before such a trial.

Clearmind Medicine Inc. NASDAQCMND said on Sept. 23 that three U.S. patent applications covering combinations of LSD, ketamine and ibogaine with N-acylethanolamines had been published. Those applications concern combinations, while Psyence's term sheet concerns ibogaine supply and U.S. development rights.

Read more: Clearmind Medicine reports three published US patent applications

PsyLabs and TIRC must conclude a definitive agreement by Nov. 30, or the binding term sheet will lapse.