Chatter around psilocybin was at a fever pitch early this year, as a growing choir of voices cheered the potential for the psychedelic component of “magic mushrooms” to treat a bevy of difficult diseases and conditions where traditional drugs have failed miserably. The roars of newness may have calmed down, but the opportunity is alive and well. In fact, it is quietly gaining steam as research accelerates with the fascinating class of compounds.
While still illegal at the federal level in the U.S. as a Schedule I drug, proponents are hopeful that one day psilocybin will be re-classified as having medical purposes. The compound has a similar label in Canada, designating it as having no medical use. However, there are many anecdotal cases where psilocybin has provided a great therapeutic benefit for a spectrum of patients, including those with advanced cancer.
Select companies are taking the lead to conduct research and spearhead what could be a seismic shift in recognizing the medical value of psilocybin.
Perhaps nothing exemplifies the opportunity quite like U.K.-based biotech company Compass Pathways’ (NASDAQ: CMPS) raising $127.5 in an upsized IPO this month, raising capital to develop its psilocybin-based therapy for depression. With shares more than doubling from the $17 IPO price, Compass now commands a market cap of $1.2 billion. The fresh influx of cash is being used for a mid-stage trial of COMP360 for patients suffering from depression that haven’t responded to standard therapy and a phase 2b trial of COMP360 as an adjunct to selective serotonin reuptake inhibitors (SSRIs). Serotonin is a neurotransmitter that relays messages throughout the brain and its receptors are widely recognized to be activated by psilocybin, making it a prime target of scientists for next-generation therapeutic applications.
An up-and-comer in the space is Better Plant Sciences Inc. (CSE: PLNT) (OTCQB: VEGGF), a Vancouver-based company with diversified assets across cannabidiol (CBD), psilocybin and functional mushrooms.
This week, the company made a move to expand its footprint in the business of clinical development of psilocybin via a new agreement between Better Plant’s subsidiary NeonMind Biosciences and Psygen Labs, a Calgary-based firm specializing in synthetic manufacture of psychedelic drug substances and drug products.
NeonMind last year filed a provisional patent application in the U.S. to protect its invention for administering psilocybin for weight loss and potential treatment for a litany of co-morbidities, such as diabetes, cardiovascular disease and hypertension, amongst other diseases. The company has already designed a preclinical study to access its contention regarding controlling food cravings and is awaiting a response from Health Canada on an approval to use psilocybin in the trial.
NeonMind is focused on these areas of unmet medical need that unfortunately have many co-morbidities. The World Health Organization estimates that over 1.9 billion people 18 years and older, nearly 40% of all the adults in the world, are overweight. That large figure equates to a weight management market estimated by Grandview Research to grow to $442.3 billion by 2025.
Further, anxiety disorders are the most common mental illness in the U.S., affecting 40 million adults, or 18.1% of the population annually. Anxiety is treatable, but many of the approved drugs are highly addictive and are accompanied by side effects, which contributes to only about 40% of those suffering from anxiety receiving treatment.
Safe to say that there are ample market opportunities for a safe and effective new treatment for weight control and anxiety.
“Serotonin is responsible for some of the drivers which govern eating. We are very interested in furthering studies to test various dosing regimens for NeonMind to see the effects that psilocybin may have on the serotonin receptors that regulate food cravings,” said Dr. William Panenka, lead scientific advisor to NeonMind, in Tuesday’s announcement.
Per the agreement inked Monday, Psygen will supply psilocybin for NeonMind’s planned preclinical and clinical trials evaluating the effect of psilocybin for the treatment of food cravings and anxiety, upon all requisite approvals.
Psygen is presently serving as a broker between NeonMind and an unnamed licensed dealer of restricted drugs in Canada. Licensed dealers of controlled substances hold a specific license under Part J of the Food and Drug Regulations. Psygen has a Dealer’s License application pending with Health Canada and will directly supply NeonMind upon approval from its under construction commercial manufacturing facility designed for high-volume output of psychedelic drug substances and drug products.
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