Creso Pharma Ltd (ASX:CPH) (FRA:1X8) has traded higher on news that target acquisition company Halucenex Life Sciences Inc is looking to capitalise on recent regulatory shifts in the Californian healthcare market with its psychedelic products.
Together, the ASX-listed cannabinoid therapy developer and its life sciences acquisition target are looking to accelerate their launch in the US after California’s Senate passed landmark legislation.
With a focus on addressing the US’ current mental health crisis, Senate Bill 519 could open the door for alternative healthcare treatments in the North American market - priming Creso and Halucenex to meet growing demand.
If it becomes law, the bill would legalise the use and possession of psychedelic compounds like psilocybin for adults over 21 years of age and expunge prior criminal offences attached to the substances.
Shares have been as much as 32% higher to A$0.185 intraday while the company's market cap was approximately A$154.3 million at the opening.
“A major development”
Non-executive chairman Adam Blumenthal said: “This is a major development for Creso Pharma and Halucenex and provides a key strategy piece, which will underpin our expansion into the US market.
“Over the recent months, we have made a number of US-focused appointments and Halucenex has secured multiple partnerships and agreements that will allow the company to pursue the US psychedelics market and become a first mover in the sector.
“The board and management team are actively assessing a number of strategies to expedite a US market entry and will leverage our existing partnerships and technical experience in the psychedelics space to unlock further value for shareholders.”
To capitalise on the shift in California, Halucenex has teed up discussions with strategic scientific consulting firm and partner HeteroGeneity LLC.
Ultimately, the move could fast-track a development plan to prepare Halucenex’s botanical psilocybin products for the US market once it receives regulatory approvals.
Meanwhile, Creso Pharma will progress opportunities via its US-based personnel — a team that includes the company’s director of US Business Development John Griese and psychedelics entrepreneur Bruce Linton.
Halucenex founder and CEO Bill Fleming said: “The passing of this legislation through the Senate highlights a significant shift in the acceptance of psychedelic compounds as an alternative treatment method to common and debilitating diseases.
“Creso has considerable bench strength which we will leverage, as well as in-country personnel that will be able to progress potential partnership opportunities, regulatory approval processes and future licencing agreements.
“We are very excited to be working with Creso management and our own technical team to delineate strategies which will see the Company become one of the first market movers in what is anticipated to become a considerably large market.”
While there’s no concrete date for a US launch at this stage, Creso and Halucenex intend to capitalise on the legislation shift “in the near-term”.