Cybin Eyes $150 Million Boost Through Private Placement to Propel Psychedelic Drug Development

Cybin Inc., a firm at the forefront of psychedelic drug development, announced its plan on Wednesday to secure approximately $150 million in funding through the private placement of over 348 million common shares. This strategic financial maneuver aims to bolster the company’s operations and expedite clinical trials for its promising drug candidate, CYB003.

In a press release, Cybin revealed that the funds would be allocated to support “certain Phase 3 drug development activities for CYB003, working capital, and general corporate purposes.” The company, still navigating the pre-revenue phase, focuses on the development of CYB003, a psilocybin-based drug currently undergoing testing for the treatment of major depressive disorder (MDD). Despite its potential, CYB003 is pending federal approval for widespread distribution in the United States.

Highlighting the significance of this funding round, Cybin also shared uplifting news from the U.S. Food and Drug Administration (FDA). The agency has granted Breakthrough Therapy Designation (BTD) to CYB003 for the adjunctive treatment of MDD. This designation not only emphasizes the drug’s potential to revolutionize MDD treatment but also facilitates a more streamlined review process and increased engagement with the FDA.

Doug Drysdale, CEO of Cybin, expressed optimism regarding the FDA’s recognition, stating, “The granting of Breakthrough Therapy Designation by the FDA underscores the potential of CYB003 to fill a gap in the treatment landscape for MDD and serves to expedite and de-risk our development program going forward.”

As of the end of its most recent fiscal quarter, Cybin reported having C$39 million in cash, equivalent to approximately $28.9 million, with access to an additional C$121 million. However, the company’s pre-revenue status and ongoing investment in research and development have led to a significant cash burn, resulting in a C$30.3 million loss for the quarter ending on New Year’s Eve.

The upcoming private placement, which is already oversubscribed, will be spearheaded by Deep Track Capital and include participation from a consortium of institutional investors, such as RA Capital Management, Avidity Partners, Acorn Bioventures, and Altium Capital, among others.

This financial boost is seen as a critical step for Cybin in advancing CYB003 toward a Phase 3 pivotal trial and further establishing its position in the burgeoning field of psychedelic-based therapeutics for mental health conditions.