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Lucy Scientific Discovery Inc.  (NASDAQ: LSDI) announced on Monday that it wanted to buy the biotech company Pasithea Therapeutics Corp. (NASDAQ: KTTA) in a cash and stock deal. Pasithea confirmed that it had received the unsolicited offer from Lucy Scientific and that the board would review the proposal to see if it was in the best interests of its shareholders.

Lucy proposed to pay $0.60 in cash, and $0.25 cents in Lucy stock for every share of Pasithea common stock. LSDI stock was lately selling at $1.13 per share. Lucy said in its statement, “Given that Pasithea’s stock closed at $0.35 per share on June 1, 2023, the proposal of $0.85 per share equates to 142% premium to Pasithea’s share price. In fact, the cash component alone represents a 71% premium.”

Lucy went on to state that Pasithea’s most recent quarterly report indicated that the company had approximately $30 million in cash on hand. The statement said that, “Given the significant market value discount to its net cash, Lucy believes its attractive offer will create immediate value from the cash portion with additional upside participation through Lucy’s stock as it executes its business plan. In order to preserve cash for shareholders, Lucy intends to explore strategic alternatives for the divestiture of Pasithea’s clinical development program.”

Lucy went on to say that if the Pasithea board didn’t approve of the acquisition, it would approach the company’s shareholders directly.

Pasithea

Pasithea has a therapeutic pipeline that currently consists of four programs. In the company’s most recent filing it stated, “Our lead product candidate, PAS-004, is a next-generation macrocyclic mitogen-activated protein kinase, or MEK inhibitor, that we believe may address the limitations and liabilities associated with existing drugs with a similar mechanism of action. PAS-004 is designed to be macrocyclic for potential use in the treatment of a range of RASopathies, including neurofibromatosis type 1 (“NF1”) and Noonan syndrome, as well as lamin A/C (“LMNA”) cardiomyopathy and a number of oncology indications. Our remaining three programs, PAS-003, PAS-002 and PAS-001, are in the discovery stage and are based on novel targets that we believe address limitations in the treatment paradigm of the indications we plan to address, which are currently amyotrophic lateral sclerosis (“ALS”), multiple sclerosis (“MS”) and schizophrenia.”

In the first quarter, Pasithea said it discontinued its at-home services in New York, NY as well as its services in the U.K. The company wrote in its earnings release, “In addition, we discontinued our clinical operations in Los Angeles, CA and are actively exploring options for the disposal of related property. Accordingly, as of the date of this Quarterly Report on Form 10-Q, we have discontinued the operations of our Clinics segment.”