The closing of the acquisition by Cybin Inc. of Small Pharma Inc. is in its final phases. On Tuesday, the companies announced that Small Pharma has successfully secured the final endorsement from the Supreme Court of British Columbia for the previously disclosed Plan of Arrangement under Division 5 of Part 9 of the Business Corporations Act. Within a few days, pending customary closing conditions and exchange approval, the acquisition will be officially consummated.
In Canadian capital markets parlance, a Plan of Arrangement is a corporate strategy or restructuring plan put forth by a company to effect changes in its ownership, structure, or operations. This plan often involves significant corporate events, such as mergers, acquisitions, amalgamations, or changes in share capital. While Division 5 of Part 9 of the Business Corporations Act refers to a specific section of the Business Corporations Act, a provincial law in British Columbia, which governs the formation and operation of corporations in the province.
As per the terms outlined in the Plan of Arrangement and in accordance with the Arrangement Agreement established on August 28, 2023, Cybin will acquire all of Small Pharma’s issued and outstanding securities in an all-share transaction. Will court approval having been obtained, the closing of the acquisition is merely a formality.
It is currently anticipated that the arrangement effective date will occur on or about October 23, 2023. That is the date when it is expected that the common shares of Small Pharma will be delisted from the TSX Venture Exchange and removed from the OTCQB Venture Market, and Small Pharma will cease to be a reporting issuer in Canada.
Thus, the acquisition by Cybin of Small Pharma will have been completed.
Cybin Becomes The Industry Leader In DMT Clinical Research
While Small Pharma maintains a second-generation preclinical tryptamine pipeline in the pre-clinical stage, the company was known for its N-Dimethyltryptamine (DMT) clinical program. Small Pharma’s Phase 2 readout, which was aimed to assess the efficacy and safety of intravenous DMT (SPL026) and reported in January, demonstrated exemplary efficacy that caught the attention of the market.
In the case of patients who received at least one active dose of DMT paired with supportive therapy, a 57% remission rate at 12-weeks following a single SPL026 dose with supportive therapy. Furthermore, primary endpoint met with a statistically significant -7.4 point difference between SPL026 and placebo at two-weeks post-dose as measured by Montgomery-Asberg Depression Rating Scale (MADRS) change from baseline.
MADRS is a clinical assessment tool used by healthcare professionals to measure the severity of depressive symptoms in individuals who have been diagnosed with depression. It consists of a structured interview in which the clinician asks the patient a series of questions to evaluate their mood and emotional state.
Undoubtedly, Small Pharma’s DMT research will augment and accelerate Cybin’s own DMT (CYB004) program, currently in a pre-Phase 2 proof of concept phase.
According to the press release announcing the acquisition, the combined portfolio creates the industry’s “largest and most advanced” deuterated DMT program, “while creating the largest intellectual property portfolio in the psychedelic drug development sector.”
To our knowledge, the combined entity will host the most advanced DMT clinical research in the entire biotech space. So if this fast onset/offset psychedelic compound is to ultimately succeed, Cybin maintains a pole position to drive this research through the clinical trial funnel.