CPH just picked up 10 grams of pharma grade psilocybin

  Email Sent On: 14-05-2021 13:33 p.m.

3 minute read

Share price when sent: $0.175  

Creso Pharma (ASX:CPH)’s acquisition target Halucenex just picked up an extra 10g of ‘hard-to-access’ synthetic psilocybin - and now has 22.3g in total.

This supply should take it through to Phase III clinical trials for micro-dosing treatment of mental health and is a big de-risking event.

We are big believers in the psychedelics industry and the potential to transform mental health, and CPH’s imminent psychedelics acquisition captured our attention.

We entered CPH as a trade in October 2020 and were pleasantly surprised by the run it had through to the end of 2020.

CPH’s acquisition target company just picked up 20mg of synthetic psilocybin for phase c trials to test for it’s about

We decided to maintain a large position after the late 2020 share price run, and we then increased our holding at 19c in March.

CPH is a medical cannabis company, set to acquire a psychedelics company in the coming weeks.

We are big believers in the psychedelics industry and the potential to transform mental health, and this CPH’s target acquisition captured our attention.

Mindmed, capped at A$1.2BN and Compass Pathways, capped at A$1.8BN are the shining lights of the psychedelics industry.

A few weeks back, we were hoping Mindmed would rocket on its NASDAQ listing and sweep CPH along with it - but Mindmed has traded sideways since its NASDAQ launch. It is still up 37% in the last 3 weeks on other exchanges - a pretty big result for a $1BN plus capped company.

We don't think the nascent psychedelics industry is as well understood in Australia yet as there has not been a local success story on the ASX.

CPH is not shy of promoting, and intends to list on the OTC in the coming weeks - opening up the story to the much larger North American market.

Today CPH’s target acquisition company doubled its supply of synthetic psilocybin, taking total inventory to 22.3 grams.

Why is having 22.3 grams of synthetic psilocybin important?

Psilocybin is a psychoactive substance, and currently an illegal drug in Canada - so sourcing a legal, high quality supply is extremely difficult.

For listed public companies, getting a reliable supply can be one of the biggest barriers to advancing clinical trials and demonstrating efficacy of their product.

It's a massive industry bottleneck as everyone scrambles into the industry, so having a confirmed supply is a big de-risking event for CPH.

In comparison, Compass Pathways used 10g for Phase I trials, and needs another 32 g for Phase II clinical trials - our calcs from its Investor Presentation.

At 22.3 grams, CPH’s target acquisition company is now one of the largest holders of single batch GMP grade synthetic psilocybin in Canada.

CPH intends to run Clinical Trials on microdosing, which will require less psilocybin than Compass - and the amount CPH has got ensures it has enough for up to Phase III trials.

The more psilocybin, the more people can participate in clinical trials, the more data the company can gather, the more value can be generated.

What are we waiting for next?

In the coming weeks we are expecting:

  • Completion of the acquisition of the psychedelics company
  • OTC listing and increased North American awareness of the stock
  • Hopefully some more revenue generating cannabis sales