Psychedelics Firm Eleusis Goes Public Via Merger With Silver Spike Acquisition Creating $450M Company

British psychedelics company Eleusis will go public via a merger with Silver Spike Acquisition Corp. II (“SPKB”) SPKB, a special purpose acquisition company sponsored by an affiliate of Silver Spike Capital. The two companies confirmed Thursday they have signed a definitive business combination agreement expected to make Eleusis a public company.

Upon the close of the transaction, the combined company will be operated through Eleusis Inc., a new holding company, and will apply to have its common stock listed on Nasdaq under the symbol “ELEU.”

“This is an ideal moment for Eleusis to go public with a partner like Silver Spike,” Shlomi Raz, CEO and founder of Eleusis stated. “We are thrilled to work with the Silver Spike team, whose extensive financial and industry experience complement our expertise. We believe access to public capital markets will accelerate our efforts to transform psychedelics into modern medicines, and ultimately offers the potential to improve millions of patients’ lives while creating long-term value for our shareholders.”

The Merger Highlights

• The transaction implies a combined company enterprise value of approximately $446 million;
• Existing Eleusis shareholders and other investors will additionally receive earnout consideration at the closing of the transaction representing approximately 14% of an adjusted measure of the enterprise value of the combined company, which will vest only if and when the combined company’s stock price exceeds certain targets during the three-year period after the closing of the transaction. Upon completion of the transaction, the current owners of Eleusis will retain approximately 49% ownership of the combined company, assuming no redemptions by SPKB’s public shareholders and excluding the earnout consideration;
• The combined company expects to receive up to $287.5 million of gross proceeds from SPKB’s trust account;
• The boards of directors of both SPKB and Eleusis have unanimously approved the transaction;
• The transaction is expected to close in the second or third quarter of 2022, subject to customary closing conditions;
• Canaccord Genuity LLC is serving as financial advisor and Latham & Watkins LLP as legal advisor to Eleusis. Credit Suisse Securities (USA) LLC served as financial and equity capital markets advisor and Cantor Fitzgerald & Co. as capital markets advisor to Silver Spike Acquisition Corp. Davis Polk & Wardwell LLP is serving as its legal advisor.
• Raz will stay on as CEO of the combined company while its board of directors is expected to include current Eleusis board members and Scott Gordon from SPKB.

About Eleusis And Its Psychedelics

ELE-Psilo, Eleusis’s lead drug candidate, is being developed to treat depression and is expected to enter Phase I trials in 2022, subject to regulatory authorization. Eleusis designed ELE-Psilo, if FDA-approved, in order to be compatible with existing U.S. healthcare infrastructure, insurance coverage and reimbursement requirements.

Eleusis formulated ELE-Psilo to deliver psilocin, the active ingredient in psilocybin, via IV infusion. IV-administered psilocin has the potential to offer more consistent therapeutic effects to patients, more controllable therapies to clinicians, and shorter treatment times – such as two hours or less – than orally-administered psilocybin exhibited in third-party clinical studies.

Eleusis expects to use the proceeds from SPKB’s trust account in the transaction to support the clinical development of ELE-Psilo, early-stage drug discovery and translational research, as well as the nationwide expansion of Andala-managed clinics.

Price Action

Silver Spike Acquisition Corp II shares traded 2.06% higher at $9.90 per share during Thursday pre-market session.

Photo: Courtesy of Mathew Schwartz on Unsplash