Skye Bioscience Raises $17M, Acquires New IP

San Diego-based pharmaceutical company Skye Bioscience Inc. (OTC: SKYE) expanded into the endocannabinoid system (ECS) therapeutic landscape with the acquisition of clinical-stage firm Bird Rock Bio Inc. The company also raised $17 million in capital.

With the purchase of Bird Rock, Skye said it plans to harness nimacimab, Bird Rock’s primary asset, in the development of two Phase 2 drug products. The initial focus is on addressing glaucoma and chronic kidney disease by targeting the cannabinoid 1 receptor (CB1).

In a statement, Andy Schwab of 5AM Ventures, which participated in the capital raise, praised Skye’s approach, citing the potential of the ECS in medical advancements.

“The endocannabinoid system holds significant promise,” Schwab said. “We recognized the merit of Skye’s CB1 agonist technology focused on glaucoma and saw the fit with Bird Rock’s CB1 negative allosteric modulator and are pleased to invest in the advancement of Skye’s clinical development plan.”

Bird Rock’s CEO, Paul Grayson, emphasized the safety of nimacimab, noting its successful pre-clinical tests without central nervous system side effects, a common concern with CB1-inhibitors.

“Prior pre-clinical and clinical data demonstrated positive safety and tolerability of nimacimab,” he said. “There have been no observed effects on the central nervous system.”

Skye’s timeline includes moving the two new programs through initial trials over the next two years. Skye CEO Punit Dhillon forecasted Phase 2a data for their glaucoma drug, SBI-100 Ophthalmic Emulsion, by mid-2024 and initiating Phase 2a trials for nimacimab in the same year.

Funds for the acquisition came from a $12 million private investment in public equity deal involving 5AM Ventures, Versant Ventures, and an undisclosed investor. Management also borrowed $5 million from another undisclosed investor. Part of the raised capital, roughly $9 million, was spent on an ongoing legal dispute.

Following the transactions, Skye said it plans to implement a 1:250 reverse stock split. The company’s long-term goal is to list on a senior national stock exchange.

Skye’s management remained at the helm post-transaction, but the board expanded from five members to seven.

The newly acquired nimacimab, a humanized monoclonal antibody, offers a novel CB1 inhibiting approach without adverse brain impacts, a challenge faced by other CB1 inhibitors. On the other hand, SBI-100 is geared towards glaucoma, with preliminary data expected by the end of the third quarter in 2023.

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