Psyence Biomedical Ltd. (Nasdaq: PBM) announced it has agreed to invest up to $5 million in Psyence Labs Ltd. (PsyLabs) and enter a reciprocal share exchange valued at approximately $9 million on each side, according to a company statement.

Psyence BioMed has irrevocably committed to $2.4 million of the investment, covering 936 PsyLabs ordinary shares at $2,564 per share, based on a pre-money equity valuation of PsyLabs of $54 million. The remaining up to $2.6 million is a backstop commitment in two tranches of up to $1.3 million each, subject to milestones and other conditions. Unfunded milestone tranches will lapse if not called by Dec. 31, 2026.

Under the share exchange, Psyence BioMed will issue 1,497,500 common shares to PsyLabs at a deemed price of $6.00 per share, representing approximately $8.99 million in value. PsyLabs will issue 3,473 ordinary shares to Psyence BioMed at an equivalent value based on an implied equity valuation of $60 million derived from an independent third-party valuation. The share exchange is subject to corporate and regulatory approvals and may be terminated if closing has not occurred by Nov. 30, 2026.

Following completion of the share exchange and the committed investment tranche, PsyLabs will hold approximately 49.89% of Psyence BioMed's outstanding common shares, up from approximately 30.22%. Psyence BioMed will hold approximately 41.13% of PsyLabs' outstanding shares, up from approximately 29.17%. The transactions are classified as related-party transactions.

Psyence BioMed also announced the formation of Texas Ibogaine Research Corporation (TIRC), a wholly-owned U.S. subsidiary registered in Texas, intended to coordinate planned regulatory, clinical and development activities involving pharmaceutical-grade ibogaine. The company said it is evaluating the feasibility and design of a potential ibogaine clinical trial in Texas targeting opioid use disorder. No trial has commenced and no regulatory application has been filed.

"Access to pharmaceutical-grade ibogaine is fundamental to the U.S. program we are planning," said Jody Aufrichtig, Chief Executive Officer of Psyence BioMed and TIRC.