By GREGORY ZELLER //
Scythian Biosciences Corp. is going public.
The New York City/Toronto-based biotech, led by Great Neck investment banker Jonathan Gilbert on its quest to develop the world’s first pharmaceutical treatment for concussions, will begin trading Aug. 8 on the TSX Venture Exchange, one of Canada’s major stock markets.
Projected to open at $8 (Canadian) per share, Scythian Biosciences (ticker symbol “SCYB”) will float upwards of 2.5 million shares – about half of the company’s outstanding shares, with the rest locked in escrow by the TSX Venture Exchange.
The stock market debut marks the closing of a three-headed transaction wherein Scythian Biosciences merged with a newly formed subsidiary of Kitrinor Metals Inc. and completed a reverse takeover of Kitrinor.
Overflowing with capital consolidations, a quarter-of-a-million stock warrants for existing investors and other Canadian change-of-business protocols, the deal was fairly complex.
But the mission of the new, sufficiently seed-funded and soon-to-be-public Scythian Biosciences is simple: developing cannabinoid-based pharmaceutical treatments for traumatic brain injuries, in a world where concussions are common and no pharmaceutical options exist.
Scythian Biosciences has raised enough through private investors, including Toronto investment banking firm Clarus Securities, to initiate a five-year study at the University of Miami’s Miller School of Medicine. But research of this magnitude requires loads of working capital, noted Chief Operating Officer David Schrader, and listing Scythian as a Tier 2 Life Sciences Issuer on the TSX Venture Exchange was the way to go.
“The medical and drug research is actually very expensive,” Schrader told Innovate LI. “In order to fund it, we need to access the public markets.”
Taking the firm public is not an easy decision, noted the COO, who – as part of TSX Venture Exchange’s final blessing of the new Scythian Biosciences – was reconfirmed as operations chief, alongside CEO Gilbert and Chief Financial Officer Jonathan Held.
But with two U.S. patents pending – covering cannabinoid-derived methods for treating brain injuries and gastrointestinal disorders – and the Miller School study picking up steam, the time was right to plunge into public waters, according to Schrader.
“Do people want to keep ownership of a company to themselves? Of course,” he said. “But when you want to bring in money, you have to give people something for their investment.
“Hopefully, your patents get granted and your drugs are protected.”
University of Miami researchers, led by behavioral neuroscientist Gillian Hotz, are well into pre-clinical trials, what Schrader described as “the first real substantive stage of the drug-testing process.”
In early 2018, the researchers plan to submit data to the U.S. Food and Drug Administration – not Scythian Bioscience’s official application for drug approval, Schrader noted, but “initial data” meant to generate some FDA feedback.
The progress report may also convince the FDA to qualify Scythian Biosciences for one of its “expedited handling programs,” according to the COO.
“They have a couple of different programs that can speed up your application or approval process,” Schrader said. “Our FDA advisor is hopeful that we could potentially qualify for at least one of these programs.”
Eventually, Scythian Biosciences will submit several new patent applications covering “different disorders,” Schrader said. But it’s holding off – it hasn’t even begun testing cannabinoid-derived compounds against gastrointestinal conditions, as per its second pending patent – to focus squarely on the TBI research.
“We want to get this work significantly underway before we focus on the next one,” Schrader noted.
With the University of Miami work proceeding, the patents pending and a pipeline of potential pharmaceuticals on the back burner, Tuesday’s stock market debut is an important moment for Scythian Biosciences, according to the COO.
He was careful not to make any promises or predictions about his company’s public performance, but Schrader did note “no real drug market” for the treatment of concussions – and what the Centers for Disease Control pegs as $65 billion in annual costs for brain-injury treatments.
“It’s a good opportunity to get in on the ground floor for a potential drug in an arena where there’s no competitor drugs on the market,” he said.