Psyence Biomedical Ltd. (NASDAQ: PBM) has signed a Letter of Intent with Southern Star Research Pty Ltd to accelerate its ongoing Phase IIb clinical trial investigating psilocybin-assisted therapy for adjustment disorder in cancer patients. The partnership marks a significant advancement in the company's clinical development strategy as it positions itself as a leader in the rapidly evolving psychedelic medicine sector.
The collaboration with Southern Star Research, a premier Australian contract research organization (CRO), will enable Psyence BioMed to leverage a broader national oncology and mental health network, potentially accelerating patient recruitment and trial execution. The company's Phase IIb trial targets adjustment disorder, which ranks as the seventh most frequently diagnosed psychiatric condition globally and currently has no FDA-approved pharmaceutical treatments.
"Southern Star Research's state-of-the-art operations, with its advanced infrastructure, national network within Oncology and Mental health, as well as in-depth knowledge of the Australian clinical trial environment will enhance patient recruitment and support efficient trial execution," said Dr. Neil Maresky, CEO of Psyence BioMed.
Dr. David Lloyd, Managing Director and Co-Founder of Southern Star Research, added: "We are excited to collaborate with Psyence BioMed on the expansion of their Phase IIb clinical trial. This partnership represents a significant step in our long-term commitment to advancing novel psychedelic-assisted therapies for mental health conditions such as adjustment disorder, an area with an enormous unmet need."
Strategic Multi-Asset Approach
Psyence BioMed is developing a multi-asset biotech platform focused on psychedelic therapeutics. Beyond its lead program in adjustment disorder, the company is assembling a steering committee to launch a clinical trial in Alcohol Use Disorder (AUD) and other Substance Use Disorders (SUD) as its second development indication.
According to World Health Organization data cited by the company, AUD is responsible for approximately 2.6 million deaths globally each year, with around 400 million people—7% of the global population aged 15 and older—living with alcohol use disorders. Of these, 209 million experience alcohol dependence, representing a significant unmet medical need.
The company's strategic decision to conduct its clinical trials in Australia leverages the country's progressive regulatory framework and R&D Life Sciences tax incentive, which provides a rebate of up to 43.5% on clinical trial costs. This approach helps reduce expenses, lower risk, and potentially accelerate the path to market, while ensuring trial data is accepted by regulators such as the FDA.
Vertical Integration and Supply Chain Security
A key component of Psyence BioMed's strategy is its exclusive royalty-bearing IP licensing agreement with Psyence UK Group Ltd. ("PsyLabs"), an international psychedelic Active Pharmaceutical Ingredient (API) development company. This partnership provides access to a federally licensed ISO-accredited facility for the cultivation and export of psychedelic compounds including psilocin, mescaline, ibogaine, and dimethyltryptamine (DMT).
The collaboration aims to secure long-term access to EU-GMP certified ingredients, positioning Psyence BioMed to meet increasing market demand for safe, regulated, and effective psychedelic-assisted therapies globally.
Scientific Leadership
Psyence BioMed has established a world-class Scientific Advisory Board (SAB) to guide its research, clinical development, and regulatory strategies. The SAB is led by chair Dr. Al Garcia-Romeu, a founder of the Johns Hopkins Center for Psychedelic and Consciousness Research—the world's largest psychedelic science research center—where he serves as associate director and professor.
The company recently recruited Dr. Dan Stein, a recognized leader in psychopharmacology, further strengthening its scientific expertise. This investment in scientific leadership is designed to ensure the company's pharmaceutical candidates meet the highest standards of safety, efficacy, and innovation.
Market Opportunity and Financial Position
According to a recent Forbes report cited by the company, the psychedelic mushroom market is projected to grow to $3.3 billion by 2031. A November 2024 study from Emory University highlighted that psilocybin-assisted therapy could benefit over 5 million individuals in the U.S. alone, underscoring the significant market potential.
Psyence BioMed reports having no debt and a strong cash position, with two strategic, low-cost financing mechanisms in place: At-the-Market (ATM) financing and an Equity Line of Credit (ELOC). This financial structure is designed to provide stability and strategic adaptability as the company advances its clinical trials, manufacturing capabilities, and global expansion plans.
Looking Forward
As one of the few vertically integrated biopharmaceutical companies specializing in psychedelic-based therapeutics, and the first focused on developing nature-derived (non-synthetic) psilocybin-based psychedelic medicine to be listed on Nasdaq, Psyence BioMed is positioning itself at the forefront of this emerging therapeutic area.
The company will discuss the new agreement with Southern Star Research during a corporate webinar scheduled for April 10, 2025, providing investors and stakeholders an opportunity to gain further insights into its clinical research and future initiatives.
With the psychedelic medicine field gaining increasing scientific and regulatory acceptance, Psyence BioMed's integrated approach—combining clinical development, manufacturing capabilities, and scientific expertise—appears strategically aligned to address significant unmet needs in mental health treatment, particularly for conditions like adjustment disorder in cancer patients and substance use disorders.
