The Rise of Psychedelic Drug Discovery in the Biotech Industry
For decades, psychedelic drugs like LSD, psilocybin (magic mushrooms), and cannabis have been associated with societal outliers, hedonism, and general recklessness. But research into psychedelics has come a long way, and biotech companies aiming to harness the therapeutic potential of psychedelics are proliferating. Market appetite for psychedelics has also increased significantly over the last few years, with investors gravitating bullishly toward this flourishing sector (Dorbian, 2021).
Despite social controversy, there is no denying that science has shown potential for psychedelics to ease or even cure mental health disorders such as depression, anxiety, and trauma. Drug discovery companies are also emerging that are isolating active compounds in cannabis – cannabinoids – for therapies with better precision, bioavailability, and safety than the plant alone. And as with other progressive movements in the biopharma industry, artificial intelligence (AI) is contributing to the development of psychedelic therapeutics.
Psychedelics for mental health disorders
Most psychedelic companies are founded with the intent to cure a mental health disorder, such as depression, anxiety, or post-traumatic stress disorder (PTSD). Psychedelics may even be useful for conditions such as ADHD, eating disorders, and movement disorders like Parkinson’s disease. They are considered a disruptive solution as current treatments are inadequate and unspecific, with short duration of effectiveness, undesirable side effects, and standardized prescription regimes (Smith, 2022). Emerging psychedelic companies are determined to prove that these alluring compounds can provide long lasting, safe, and highly effective solutions to mental health disorders.
A few psychedelic companies leading the way are Atai Life Science, Compass Pathways, MindMed, and the non-profit organization The Multidisciplinary Association for Psychedelic Studies (MAPS).
Atai Life Science is a clinical stage biopharmaceutical company with multinational bases in New York, London, and Berlin. Founded in 2018, the company raised $362M in VC funding between 2020-21, and their debut on the Nasdaq as of June 2021 garnered $259M (Smith, 2022). Atai acts as a holding company to several other businesses innovating the development of more effective mental health treatments; while also using proprietary platform technologies, big data, and digital therapeutics to develop medicines. The company’s pipeline includes harnessing the therapeutic potential of ketamine, MDMA, psilocybin, and other psychoactive compounds to treat a variety of disorders including major depressive disorder (MDD), schizophrenia, generalized anxiety disorder, PTSD, and anorexia. It’s lead clinical candidate heading toward Phase III studies is a ketamine compound for treatment-resistant depression.
Compass Pathways, founded in 2016 and based in London managed to raise $80M from investors, and debuted on the Nasdaq in 2020 with a $120.6M IPO. Its lead clinical program administers doses of psilocybin to patients in conjunction with guided therapy and music for treatment-resistant depression (Smith, 2022), and has shown impressive results in clinical trials with long-term effects. Compass has a solid cash runway over the next two years, with Atai currently holding a 20.8% equity stake in the company.
MindMed is a multinational company founded in 2018, that is using LSD, MDMA, and other psychedelic compounds to treat patients with anxiety, ADHD, autism, depression, pain, addiction, and neurological disorders such as cluster headaches. The company’s innovative approach uses digital medicine capabilities to monitor and track patient progress and provide education and support for patients undergoing treatment. Another well-funded company, MindMed are in a relatively strong financial position to weather a market downturn, having gone public on the Canadian Stock Exchange in 2020 and raising over $190M in the past three years.
The Multidisciplinary Association for Psychedelic Studies (MAPS) was founded in 1986 and is headquartered in California. MAPS has a vision to safely implement the use of psychedelics and marijuana for the treatment of various psychiatric disorders, according to its website. They currently have the most promising Phase 3 study results for PTSD patients undergoing MDMA administration combined with therapy to cope with confronting traumatic memories (Smith, 2022).
Cannabinoid Biotechs Aligned with the Psychedelic Movement
Cannabis has been legal in various U.S., Canadian, and European territories for over a decade for medicinal (and more recently recreational) use in inhaled, topical, and ingestible forms. It has been shown to have therapeutic properties for chronic pain, inflammation, seizures, and other chronic disease symptoms.
Cannabinoids are the molecules derived from the cannabis plant and other sources. The past several years have seen a boom in biotech companies looking to synthesize cannabinoids for a precise, more bioavailable, safer, and more potent therapeutic effect.
The only commercially available cannabinoid medication is Epidiolex (Jazz Pharmaceuticals), approved by the FDA in 2018. Used to treat severe epilepsy, Jazz acquired the drug from GW Pharmaceuticals in 2021, and it has been a major success since then. Jazz is continuing to work with the GW Cannabinoid Platform for breakthrough medicines intended to treat several neurological diseases.
Other biotech companies drawing on the body’s intrinsic endocannabinoid system are Zynerba Pharmaceuticals and Corbus Pharmaceuticals. Zynerba is trialing its transdermal gel (Zygel) that permeates the skin to treat complex neuropsychiatric disorders including Fragile X syndrome, autism, and 22q. Zygel works on the socio-emotional aspects of the endocannabinoid system without the euphoric “high” associated with cannabis or other cannabinoid compounds. Corbus, on the other hand is working with the systemic regulatory functions of the endocannabinoid system to treat inflammation, fibrosis, metabolic, and immuno-oncology targets.
How AI is Accelerating the Psychedelic Revolution
It’s no surprise that company’s integrating AI to discover successful psychedelic and cannabinoid drugs are at the forefront of the psychedelic movement. Cannabis is a complex plant, with over 120 compounds having been identified so far with potential therapeutic use. And potentially millions of psychoactive compounds exist that AI platforms can screen to determine therapeutic potential while minimizing adverse effects.
Several drug companies are employing AI to identify novel psychedelic compounds. Enveric Biosciences is one of them. The company’s CEO Joseph Tucker feels AI will be essential to the success of psychedelic drug discovery companies, helping to make up for lost time that decades of stalled progress from government restriction and social controversy have caused (Jimenez, 2022). Enveric uses its AI platform to screen psychedelic compounds to determine whether they have a therapeutic effect on the body, as well as to predict side effects of various molecules before they go to clinical trials (Jimenez, 2022).
Conclusion
Social notions and government restrictions of psychedelics have prolonged the emergence of companies pursuing their therapeutic use. But with tech-savvy biotech companies paving the way to unleash the power of psychedelics for the treatment of diseases from mental health to movement disorders and even cancer, the therapeutic potential of psychedelics is an exciting and viable possibility for the future of the biopharma industry and the patients who depend on its innovation.
Sources
Dorbian, I. (21 January 2021). Why investors are bullish about psychedelics. Forbes. https://www.forbes.com/sites/irisdorbian/2021/01/21/why-investors-are-bullish-about-psychedelics/?sh=224de4021a41
Jimenez, D. (28 January 2022). How AI could unlock the potential of psychedelics. Pharmaceutical Technology. https://www.pharmaceutical-technology.com/analysis/ai-unlock-medical-potential-psychedelics/
Smith, J. (22 June 2022). The top psychedelic drug makers leading the market. Labiotech.eu. https://www.labiotech.eu/best-biotech/psychedelic-drug-depression/