GO OR NO GO #13 : Psychedelics 🍄
Can psychedelics cure depression, forever? The story of a $6.85 Billion industry.
Can psychedelics cure depression, forever?
We’ve decided to focus our weekly, on a special industry. The psychedelics’ business model is effective through their recent IPOs, M&A, launches.
Here’s a glimpse of the market 👀
The global psychedelic drugs market has increased significantly during the years 2018-2020 and projections are made that the market would rise in the next four years i.e. 2021-2025 tremendously. The psychedelic drugs market is expected to increase due to rising prevalence of depression and mental disorders, regulatory reforms, developments relating to psychedelics, changing perceptions, little severe side effects and cost effective, etc. Yet the market faces some challenges such as uncertainty around getting the FDA approval, early stage in lifecycle of the psychedelics industry, stigma associated with psychedelic drugs use, etc. (Source)
📊 Key metrics:
Psychedelic Drugs Market Projected to Reach $6.85 Billion by 2027 (Source)
$4.2 Billion aggregate market cap of psychedelic drug companies (Yahoo)
Europe’s HealthTech industry in 2020: There are 626 funded digital health companies active across Europe today, and 63% of them were founded in the past five years.
European companies set to dominate psychedelics market
Only about 12.5% of products that enter clinical trials will make it to manufacturing and a new drug costs around $1bn to bring to market.
The psychedelics sector — and indeed the whole biotech sector — is overwhelmingly white. Fewer than 10% of the 285 therapists initially trained by MAPS were people of colour
📈 Problem:
Failed Public Health Systems in many European countries (post-COVID19)
The amount of research on the impact of these drugs on disorders such as post-traumatic disorder and depression has accelerated amid growing evidence that compounds such as psilocybin and MDMA actually help.
🚀 Solution:
From Biotech to PsyTech - Full list
LSD was first synthesized in a pharmaceutical laboratory in 1938 by the company Sandoz in Switzerland, which is now Novartis.
In California, Humphry Osmond in the 1950s began experimenting with giving patients the psychedelic drug LSD. The leading US nonprofit MAPS, which researches psychedelics, was born in the US in the 1980s.
At Imperial College London there is a dedicated Centre of Psychedelic Research, which has as its deputy head the UK Government’s former chief drug advisor — a clear a sign of this field entering the scientific mainstream. Johns Hopkins now also has a specialized centre for “psychedelics and consciousness research”. UC Berkeley in California last year launched a “center for psychedelic science and public education”.
In November 2020, legal, regulated psilocybin therapy was approved for use in the US state of Oregon.
🙌 Top actors:
European companies like Compass Pathways, Beckley Psytech and Atai Life Sciences are leading the race to dominate the new psychedelic market.
Late last year, Compass Pathways, a UK-based biotech company that patented a synthetic version of psilocybin (the psychoactive ingredient in ‘magic mushrooms’), listed on the US stock market at a $1.6bn valuation — proving huge investor interest in the space. (🐣 A magical journey: how we raised $260m for ‘magic mushrooms’ by John Boghossian)
Eleusis Launches Clinical Development of Psychedelic Infusion Therapies for Major Depressive Disorder and Acquires Kalypso Wellness Centers
UK-based Beckley Psytech raises £14 million to advance drug discovery to clinical trials
Feilding-Mellen is experimenting with 5-MeO-DMT, a short-acting psychedelic found in South American plants, for treating depression.
In December 2020, The Medicines and Healthcare products Regulatory Agency (MHRA) approved London-based Small Pharma’s trial for the use of DMT to treat depression — the company is currently asking for further permission from the UK Home Office. Atai Life Sciences is also researching DMT.
Thiel-backed psychedelic startup Atai raises another $157m : Atai Life Sciences made a big step launching a digital therapeutic platform called IntroSpect Digital Therapeutics
🍳Straight from the oven:
From Y Combinator and CrunchBase
Gilgamesh Pharmaceuticals, Novel Psychedelic-Inspired Therapeutics For Treating Mental Illness.
Alphacare, A Universal mental healthcare system for psychedelic medicine
Osmind, Engagement Platform designed for treatment-resistant mental health practices.
The Third Wave, Media and wellness brand focused on supporting responsible psychedelic use to improve overall well-being.
Delic, a psychedelics corporation that specializes in education, content, and events about psychoactive compounds.
🌋 SWOT
Bureaucratic trials. To bring a drug into market, there are many steps to go through: Research, big scale human trials, FDA approval,…
How to actually administer these drugs to patients in a scalable way? One issue is infrastructure. “We are figuring out how to make this reimbursable, and — more practically — where we treat 100M patients,” says Lars Christian Wilde, Compass Pathway’s chief business officer.
The exact way these drugs are taken — for example, the lighting, the colours of the room, the demeanour of the therapist — are thought to have an impact on the outcomes from taking these drugs, making them more complex than prescribing regular antidepressants.
The concern about the ability to actually deliver these drugs at scale and the headache of trying to standardise the process has led many in the field to experiment with digital-first approaches which can harmonise the experience for all patients.
As the field develops, there are also going to be growing questions about diversity. Are all settings for drug therapy going to be the same for all people? Do different ethnicities merit different treatment? Do women? Or trans people? Have most studies — like is often the case — been on white men?
A cash-burn business - “Drug development is expensive. We need many funds to finance those programs” says memos.
🔮 Predictions:
Private Equity, a SPAC and an IPO walk into a bar - full read, enjoy 🐣
COVID-19: it’s time to learn our mistakes and act! COVID-19 - Vaccines’ accelerated FDA approval
Biotech: a world of opportunities. A startup that let you invest in soon-to-be-IPO startups claims that Biotech companies emerged in his portfolio since the COVID-19 started.
The Uber disease of telemedicine — why it may not be a great investment - Some investors question the business models of the darlings of venture capital.
The 🇩🇪 German HealthTech revolution that lets 20 something startups be the first to tap into 73M Germans’ health insurance.
🍆 Sextech startups boom in coronavirus pandemic - Europe’s $30bn ‘Sextech’ industry — made up of sex toys, apps and services — is being boosted by those with idle hands and minds.
👩 List: Europe’s top femtech startups 2020 - From CBD to saliva — these are the 22 femtech startups to know in Europe.
Inside Estonia’s pioneering digital health service - Estonia’s digital healthcare service has managed what most other European health systems only dream of.
🤩 GO or NOGO?
GO, GO, GO!
Despite this more than 70-year-old history of lab-made psychedelics, it is still early days for the sector with challenges of the treacherous clinical trials process and creating a whole new infrastructure for a new kind of treatment.
Still, there has never been more excitement on mainstream interest in the field. Companies such Atai are rumoured to be considering following Compass to supercharge their growth by raising money in the capital markets. Beckley saying they were weighing up the same.
🐣 This is a must-read for the curious ones
The weed business model 🌿
Psychedelics: a game-changer in Mental Health - Pharma Technology Focus
Shroom-Therapy Startup Edges Toward FDA Approval - Bloomberg
Inside the movement to decolonize psychedelic pharma - Neo.life
Medical Researchers Worry Silicon Valley Could Screw Up Psychedelics - Research
1 in 4 people in the world are affected by Mental Health Disorders - WHO, 2001
Doing What Matters in Times of Stress - WHO, 2020
2 in 3 veterans suffer from PTSD - Research, 2013
264M : number of people who suffer depression globally - WHO, 2020