Lucy stock is up 15% on Tuesday: what happened?

Lucy Scientific Discovery Inc (NASDAQ: LSDI) is trading about 15% up this morning after announcing an asset purchase agreement with the Toronto-based Wesana Health Holdings Inc (CNSX: WESA)

Details of the said transaction

On Tuesday, Lucy confirmed that it’s buying intellectual property as well as related assets for SANA-013 for one million shares and $570,000 in cash.

SANA-013 is Wesana’s proprietary combination of psilocybin and cannabidiol for the potential treatment of mental health/CNS conditions. In the press release, Lucy CEO Chris McElvany said:

Expanding our footprint with the SANA-013 drug development programme is a logical next step for Lucy, which should also drive growth in Lucy’s manufacturing business.

The deal will also ensure sufficient supply of Wesana’s psilocybin for all near-term clinical studies. Year-to-date, Lucy stock is still down more than 50%.

Wesana CEO to join Lucy Scientific

Shares that are being offered as part of the consideration will be subject to a lock-up period. It’ll take nine months for the first half of these shares to be released while the other half won’t be released until 14 months from initial trading date.

The said agreement is expected to complete in the second quarter of the current year. According to Wesana CEO Daniel Carcillo:

Broader challenges in the macro environment led us to consider strategic options, and we believe there is significant value held in continuing development of SANA-013.

Carcillo will join the executive team at Lucy’s following the transaction. The investigational therapy is expected to start first human testing in late 2023.