After being stifled for decades by repressive drug laws and a stigma associating them with counterculture, research into psychedelic substances is finally being embraced by the government, corporations, and the medical community. In March, the U.S. Food and Drug Administration approved the use of esketamine to treat depression, making it the first psychedelic medicine to ever pass the regulatory body. The FDA has also granted “breakthrough therapy” status to MDMA as a treatment for post-traumatic stress disorder (PTSD), with the Phase 3 trials expected to be completed in 2021, meaning that the FDA could approve the treatment as early as 2022. Now, as psychedelic therapies approach market-ready status, some companies are moving quickly to position themselves in the burgeoning psychedelic sector. These companies—namely, Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF), Johnson & Johnson (NYSE:JNJ), The Yield Growth Corp. (CSE:BOSS) (OTCQB:BOSQF), Champignon Brands (CSE:SHRM) (OTCPK:SHRMF), and Revive Therapeutics (CSE:RVV) (OTCPK:RVVTF)—stand poised to take advantage of this innovative opportunity to advance treatment for a broad range of mental health illnesses and, by doing so, generate significant revenue.
MindMed’s Applications for Psychedelic-Based Therapies Include Potential Treatments for Opioid Addiction and ADHD
After raising $24.2 million in a pre-public funding round, Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) became the world’s first psychedelic pharmaceutical company to make its global public markets debut. The company began listing on the NEO Exchange on March 3, 2020, and by the end of the first day, nearly 47 million shares had been traded, marking a new first-day volume record for that exchange.
This excitement behind the company speaks to the potential that the market sees, both in the psychedelic-based medicines industry as a whole, and in MindMed’s specific business strategy. Its immediate priority is to address the opioid crisis by developing a non-hallucinogenic version of the psychedelic ibogaine.
As with the other companies on this list, MindMed’s aim is to develop medicines derived from psychedelics to address significant unmet medical needs. One way it hopes to achieve this is through its Technology Evaluation, Acquisition and Scientific Integrity Board Committee, which will identify and expand the company’s clinical trial pipeline and IP portfolio of psychedelics.
While MindMed foresees a number of critical applications for psychedelic-derived medicines, its primary focus is to use psychedelics to address the ongoing opioid crisis. To that end, it has begun making progress, as it recently began conducting human safety studies of 18-MC, its proprietary drug candidate for the treatment of opioid use disorders.
18-MC is an orally-active, non-hallucinogenic molecule, based on the psychedelic ibogaine. It has already shown promise in helping to curb various forms of addiction in extensive nonclinical testing. MindMed expects that data from the current human study to help advance the planning and design of its future trials of 18-MC in opioid use disorder patients, with Phase 2 trials currently scheduled to begin in late 2020.
What’s more, in April, Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) signed a multi-year collaboration deal with the laboratory of Professor Dr. Matthias Liechti, a psychedelics pharmacology and clinical research group at University Hospital Basel in Switzerland. Not only is Basel the birthplace of LSD, the University Hospital Basel is the world’s leading center for LSD research.
Through the agreement, MindMed gains exclusive worldwide rights to data, compounds, and patent rights associated with the laboratory’s research on LSD and other psychedelic compounds. This includes data from preclinical studies and eight completed or ongoing LSD clinical trials. MindMed has already begun working with the laboratory to file patents for the data and clinical trials it has generated over the last 10 years. It will also support ongoing and planned clinical trials, including a micro-dosing study of LSD as a potential treatment for adult ADHD.
This deal has already yielded its first result, as MindMed and the Liechti Laboratory have filed a patent application for an overdose antidote and duration shortening agent for LSD. This potential product—which may help reduce the acute effects of a psychedelic drug—may, when further developed, pave the way for greater therapeutic applications of LSD and shorter-acting treatments.
Looking ahead, Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) continues to pursue new collaborations, acquisitions of IP, and clinical trials in the hopes of building “the most compelling pipeline and portfolio of psychedelic inspired medicines.” In its efforts, the company will be joined by several other noteworthy psychedelic stocks.
Other Companies Targeting Psychedelic Therapeutics
Last year, the FDA approved Johnson & Johnson’s (NYSE:JNJ) ketamine-derived nasal spray, Spravato, for treatment-resistant depression. Spravato is three times more potent than ketamine but can be given at a low dose, making it more accessible to patients. This represents the first major pharmaceutical innovation for treating depression since the launch of Prozac and related antidepressants in the late 1980s.
Then, at the start of 2020, The Yield Growth Corp. (CSE:BOSS) (OTCQB:BOSQF) announced it is accelerating its entry into the psychedelic medicine industry by offering edible mushroom products. These products, mainly centering around psilocybin, will target health and wellness demographics. CEO Penny White explains that, “psychedelic mushrooms, in particular, represent an exciting new opportunity for companies like Yield Growth, who look to capitalize on cutting edge science and technology.”
Likewise, Revive Therapeutics (CSE:RVV) (OTCPK:RVVTF) (FRA: 31R) announced it plans to acquire Psilocin Pharma Corp. in order to begin developing psilocybin-based products. In addition to its strong relationships with lab partners in areas where certain psychedelics are legal, the acquisition of Psilocin Pharma also provides Revive with the company’s six proprietary psilocybin formulations.
For its part, Champignon Brands (CSE:SHRM) has also recently entered the medicinal mushrooms space through its acquisition of Artisan Growers Ltd. Champignon plans to integrate Artisan Growers’ craft mushroom production capacity into its existing operations with the end goal of having a fully verticalized medicinal mushrooms infrastructure.
A Brave New World for Psychedelic Stocks
The FDA’s approval of psychedelics to treat specific illnesses is a major step forward for the industry, but it only represents the beginning of this newfound opportunity. Doctors can begin prescribing psychedelic-derived medicines for “off-label” uses, which will likely help normalize the use of these medications, and could even expedite our efforts to understand the full range of psychedelics’ applications.
For example, before MDMA was banned, therapists reported success in prescribing it to improve the quality of intimate relationships. Similarly, while psilocybin has shown potential as a treatment for depression and anxiety, physicians could also prescribe the drug to promote the well-being of healthy individuals.
This indicates that, while companies like Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) and its contemporaries are advancing a specific range of FDA-approved psychedelic-based therapeutics to market, their initial goals are only the tip of the psychedelic iceberg. More discoveries and treatments are likely to follow, giving this space an unprecedented capacity to continue expanding, with no immediate limitation in sight.
For more information on Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF), please visit microsmallcap.com.
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