Albert Hofmann had an odd feeling about the “apparently useless” compound he discovered at Sandoz Laboratories in 1938 — but he couldn’t figure out why. Originally, his team at Sandoz, at the time a Swiss chemical company known for manufacturing dyes and saccharine, was researching the biological compounds in ergot, a fungus that grows on moldy rye bread. Inside Sandoz, (which is now a division of Novartis), scientists discovered that the various compounds in ergot shared a nucleus called lysergic acid, and Hofmann had been tasked with combining lysergic acid and different molecules in the hope of finding a combination that could stimulate circulation and respiration. On his 25th try, he reacted lysergic acid with diethylamide and called the compound LSD-25. It didn’t achieve what Hofmann had hoped for, and the substance was set aside.
Yet, as the years passed, Hofmann couldn’t shake the feeling that he’d shelved a substance with potential value. Maybe it was the way animals who took the compound behaved excitedly in early tests. Or maybe it was his innate instinct as an experienced chemist. Whatever the case, in 1943, Hofmann re-synthesized the compound, accidentally absorbed some of it through his skin and soon became the first person to ever start tripping on LSD.
He had found an impressive stimulant after all.
Later, Hofmann famously remarked, “I did not choose LSD; LSD found and called me.”
Although his first trip in 1943 was by accident, Hofmann went back to the lab a few days later and began purposely dosing on the compound to better understand its effects. He would continue micro-dosing on LSD for the rest of his life, saying that the drug could provide “material aid to meditation aimed at the mystical experience of a deeper, comprehensive reality.”
Now, LSD, along with several other psychedelic compounds, are back in pharma labs and could soon change the way a range of mental health disorders are treated.
An emerging psychedelics space
After Hofmann’s discovery, scientific research into the mental health benefits of using psychedelics blossomed. Then a crackdown on psychedelic drugs in the 1960s brought this progress to a halt. But times have once again changed.
Perhaps marijuana was the gateway drug pharma needed. In the last few years, regulators and pharma companies have more openly embraced the many clinical benefits of using cannabis compounds. Today, scores of biotechs are now setting their sights on something more far out, and are conducting clinical trials on a range of compounds derived from traditional “party drugs” including LSD, psilocybin (found in “magic mushrooms”), MDMA (found in ecstasy or “Molly”) and more.
The indications being targeted by these startups represent a therapeutic market where pharma has often run out of answers — depression, anxiety, post-traumatic stress disorder (PTSD) and more. If successful, psychedelics could tap into a large population of patients starved for new treatments. And for companies ready to jump on this colorful new bandwagon, the payout is expected to be huge.
Wall Street has taken notice and investors have begun flocking into the pharma psychedelics space with their fists full of dollars to inject needed capital into the effort to bring these treatments to the market.
But there are still major hurdles in the psychedelics space including intense regulatory scrutiny, and lingering questions over the safety, efficacy and complicated distribution of the new treatments.
Will all the hype turn into a bad trip for pharma? Or, as some have suggested, will psychedelics provide a new future for mental health drug development that’s even bigger than weed?
Targeting ADHD and addiction
Like Hofmann, JR Rahn’s foray into psychedelics began with LSD. While working at Uber in San Francisco, Rahn took notice of the rising Silicon Valley trend of young tech workers micro-dosing on LSD for improved focus, or to wean off other stimulants such as Adderall.
Recognizing the therapeutic potential of psychedelics, Rahn teamed up with scientists and pharma veterans to launch MindMed, a Toronto-based startup with two drug candidates in its pipeline.
Naturally, one of their products is an LSD micro-dose treatment for adults with attention-deficit/hyperactivity disorder (ADHD) that will soon enter phase 2 clinical trials so that the company can determine the final dosage amount and form.
Despite the edginess of working with compounds that are associated with street drugs, MindMed’s leadership has been quick to dismiss any comparisons to the burgeoning cannabis space. Rather than going the way of marijuana — with a large number of companies rushing to sell a range of products (some of questionable quality) — MindMed instead sees the psychedelics market functioning more like traditional pharma. The company has also vowed to never get into the business of selling drugs for recreational use. This issue of being a legit pharmaceutical drug developer has been a major sticking point for its growing ranks of investors — the most notable of which is Shark Tank’s Kevin O’Leary.
In early March, MindMed became the first publicly traded psychedelics company when its stock was listed on Canada’s NEO exchange. Just before its IPO, MindMed also pulled in $24.2 million in a private round of funding, which was raised on top of several other multimillion-dollar funding campaigns.
Perhaps even more alluring than its potential treatment for ADHD is its other product hopeful — a drug that MindMed says could become an “antibiotic for addiction.”
The backstory goes like this: A man named Howard Lotsof, along with several friends, took a psychedelic drug named ibogaine in the 1960s. At the time, Lotsof was addicted to heroin. But after an intense two-day trip on the substance, which is found in the root bark of an orange-flowered shrub that grows in West Africa and was used by native tribes, Lotsof and his friends found that they no longer craved heroin and did not experience any drug withdrawal.
After the word got out and countless others began describing their experience overcoming addiction by taking ibogaine, researchers took notice. One was Stanley Glick, a professor of pharmacology at Mount Sinai School of Medicine, who dosed morphine-addicted rats with ibogaine and discovered that afterward, they too seemed to kick their morphine habit.
But there was a catch. After taking ibogaine, users reported dangerous side effects including potentially fatal cardio toxicities. On a quest to overcome this hurdle, Glick paired up with another scientist and isolated over 60 molecules from ibogaine to find the one with anti-addiction properties. Eventually, they discovered what is now called 18-MC, which early studies have shown does not have the hallucinogenic properties or deadly side effects of the ibogaine root.
Glick is now a co-founder, director and chair of the scientific advisory board at MindMed, which has acquired his program to develop 18-MC. The company is planning phase 2 trials of 18-MC on opioid-addicted patients for later this year. It’s no secret that if the drug is shown to be successful in helping patients with opioid use disorder, it would be a welcome relief to a major ongoing health crisis in the U.S.
“We haven’t exactly taken a little nibble in terms of unmet medical needs we’re trying to address,” explains Stephen Hurst, MindMed’s co-founder, executive chair and co-CEO.
And opioid use disorder is just one indication for which 18-MC could be used. As an alpha-3-beta-4 nicotinic receptor antagonist that modulates excessive dopamine fluctuations in the brain, MindMed sees the potential for 18-MC to treat a range of addictions, from nicotine to alcohol. The FDA has also been working with MindMed to design clinical trials and clear a path for 18-MC's approval.
“The FDA sees these compounds as any other new molecular entity that is targeting unmet medical needs,” Hurst says. “They are open to reviewing data and helping us, or any company, abiding by regulations.”
The FDA has also been welcoming of another psychedelic in development showing major promise: Psilocybin.
Treatments for depression, anxiety and PTSD
In late 2018, the FDA granted breakthrough therapy designation to a program of psilocybin therapy for treatment-resistant depression being developed by UK-based COMPASS Pathways.
So far, COMPASS’ psilocybin therapy has made it further than any other of its kind in development and the company is running a global phase 2B dose-ranging study, which is expected to yield data next year.
Like MindMed, COMPASS is working in a therapeutic area with existing pharma treatments. But today’s everyday depression meds — selective serotonin reuptake inhibitors (SSRIs) — only work for an estimated 70 percent of people, which could be leaving about 90 million patients globally without adequate help, according to the World Health Organization. For the most part, traditional pharma hasn’t come to the rescue.
“It’s an area that pharma companies have moved away from in recent years,” says Sue Stansfield, vice president of clinical operations at COMPASS. “We’re trying to fill that need.”
Launched by a married couple as a nonprofit aimed at researching the impact of psilocybin on treating anxiety in terminally ill patients, the company has since switched to a for-profit model that they describe as a “mental health care” company — not a psychedelics drugmaker. COMPASS has also been an investor target, raising $58 million in rounds of venture funding that have included several big wigs on the tech scene.
Stansfield notes that the company is building on decades of research into the mental health benefits of psilocybin (some of which was conducted by none other than Albert Hofmann, who isolated and synthesized the compound from the fungi in 1958).
To make the treatment, COMPASS uses a contract partner who produces the synthesized API and another who does fill and finish into a capsule. COMPASS has reportedly produced several thousand doses and doesn’t anticipate issues with scaling operations. But unlike MC-18, COMPASS believes that the hallucinogenic properties of psilocybin may be crucial to patients receiving therapeutic benefit, which makes administering the drug unique.
To receive the treatment, patients have to spend about six hours at a clinic with trained therapists who sit with them throughout the psychedelic experience. The session is preceded by preparation meetings and followed up with integration sessions with the therapists — ensuring that the patient’s mindset is appropriate for the experience.
“This certainly isn’t a drug anyone will be taking home with them,” Stansfield explains. “This will always be a drug and therapy combination because the set and setting is so important.”
Stansfield says that COMPASS is aiming to have their treatment approved within the next five years. In the meantime, the company is working out the logistics of how it can conduct a widespread rollout of a drug therapy that requires all-day assistance from a specially trained therapist in a specific clinical setting. In many ways, it’s uncharted territory for a new drug launch — but highlights an issue facing other recreational-turned-pharma drugs as well.
There are now nearly a dozen clinical trials underway in the U.S. to test the efficacy of MDMA, the active ingredient in ecstasy that can trigger feelings of euphoria, in treating PTSD. MDMA is also administered under the guidance of therapists and has generated considerable interest in the global community of military veterans.
In one 2017 phase 2 trial, 54 percent of patients responded so well to the treatment that they could no longer be diagnosed with PTSD. Even better, the number rose to 68 percent after one year, showing that the effects increased over time.
The FDA also granted breakthrough therapy status to a phase 3 study using MDMA to treat PTSD being conducted by a nonprofit called the Multidisciplinary Association for Psychedelic Studies (MAPS). The group hopes to report data from the trial by mid 2021. If approved, figuring out the complicated rollout of a drug that has to be accompanied by guided therapy is just one of the challenges for this new class of treatments.
Downers of psychedelics
Lessons from ketamine
When Johnson & Johnson’s nasal spray product, Spravato, won an FDA approval for treatment-resistant depression last year, the news was met with much fanfare — not just because it was the first psychiatric drug approval in more than 30 years, but also because it was made with esketamine, a more potent version of the club drug ketamine.
Often used on the recreational scene as a powerful sedative and hallucinogenic, researchers have shown for decades that ketamine can also be a useful analgesic and work quickly to alleviate depression symptoms because — the leading theory goes — it can help stimulate the regrowth of synapses in the brain. Unlike SSRIs, esketamine is an N-methyl D-aspartate (NMDA) receptor antagonist that targets the NMDA pathway that scientists believe is related to depression.
After J&J’s March 2019 approval, the company reported the launch of Spravato was off to a strong start and that 800 facilities had been approved to administer the treatment, which requires patient monitoring for two hours due to potentially dangerous side effects and risk for abuse.
Still, the tougher restrictions on how it’s administered could hinder its potential sales. The drug has also gotten pushback by a number of watchdog groups who complain about its price tag, which is estimated to be as high as $32,000 a year.
A pair of late-stage trial failures have also cast doubt on the drug’s effectiveness (despite other trials that did show benefits to using it in combination with an SSRI). Citing insufficient clinical data and cost, the UK’s National Institute for Health and Care Excellence declined to recommend the treatment for coverage earlier this year.
Launching a similar antidepressant has been even tougher for Allergan. Just days after the FDA announced its approval of Spravato, Allergen reported that its NMDA receptor modulator for depression had flopped three pivotal trials.
Without any competition in the market for NMDA antagonists, many analysts predict that J&J’s Spravato will reach blockbuster status within the next five years — although the drug is also now being followed by a growing chorus of concerns over its safety, efficacy and cost.
Preventing abuse will be a major question hanging over the potential approval of any psychedelic-based drug. Some companies, of course, have chosen to restrict access to in-clinic use, under the watchful eye of a health care worker. But what about the drugs designed to be taken as-needed at home?
So far, Hurst says that MindMed is still workshopping potential solutions for its LSD micro-dose treatment. The company is exploring a range of options that could include smart pill bottles, limited prescriptions or a novel approach to formulations that would make abuse very difficult.
“This is an important question that we will address with a commercial product,” Hurst explains. “But we are in the early stages, so it’s not hindering our development path.”
One major drawback to working in a pioneering sector of pharma is the lack of institutional knowledge.
“There’s a lot of interest in this area, which is fantastic,” Hurst explains, adding a caveat. “As research on psychedelics expands, the number of experienced, qualified investigators will become in short supply.”
Hurst says that MindMed is working on ways to ensure that more investigators are trained in the realm of psychedelics. At the moment, he says it takes about two years for the company to train an investigator to be on protocol.
“Stay tuned — we might be doing something about that,” he says. “Because if you’re not training the next generation of investigators, there’s a cap on what you can achieve.”
Finding the right contracting partners could also be a challenge as the psychedelics industry grows. Although MindMed is already locked into stable partnerships with manufacturing and research organizations, Hurst says that there could potentially be a bottleneck in the market as more companies enter the space.
“Whether you’re looking for clinical research, contract manufacturers, fill and finish, etc…the number of Schedule 1 licensed facilities is very small at the moment,” he says. “It could be a problem for companies in about two years.”
How big could psychedelics become?
Despite the challenges, Rahn has publicly stated several times that growth in the psychedelics market could one day outpace cannabis, which is projected to reach astronomical proportions (predictions range from $70-90 billion) within the next five years.
According to Hurst, Rahn’s rosy outlook is based on the high barriers to entry into psychedelics and the major indication areas being targeted. Hurst argues that the timing is also just right.
“Medicine has a particular innovation that describes a given century. For example, the 19th century was the century of anesthesia, the 20th century was the century of antibiotics,” he says. “The speculation was that this will be the century of cancer. But I actually think this is going to be the neuropharmacology century. We are going to address these conditions on a new level, with far greater efficacy, and for a massive patient population. That’s our vision.”
One patient's experience with psilocybin
Kirk Rutter, who works in higher education in London, struggled with depression for years. After trying several SSRIs and receiving little benefit, Rutter enrolled in a clinical trial at Imperial College combining synthetic psilocybin (found in “magic mushrooms”) with guided therapy from two health care professionals and therapeutic music. Here is how he describes his experience:
I had a perfect storm of a lot of things going wrong. I felt I had no safe harbor, every aspect of my life had problems and then, my mother passed away. Over time, I wasn’t moving out of the grief. I tried antidepressants, which could level things off but in the long run, it didn’t work. I did a year’s worth of counseling as well and exercised regularly, but nothing helped. Then I found out about the trial using psilocybin.
After being accepted into the trial, the treatment started by meeting the therapists. I was taken into the room where it was going to be taking place. We practiced a grounding technique and held each other’s wrists. That helped with anxiety. So when the day came to take the therapy, I had met the therapists and knew they were nice.
There were two treatments, each one week apart — one for a low dose and one for a higher dose. The low dose was still quite psychedelic. I was in this hospital room that was changed into a psychedelic spa. It was colorized in a nice way. It was easy to let go. It’s almost like there was a bit of compassion built into the experience. It felt safe. The music they played was a massive part of the experience. Imagine a big pirate ship with the sails up. We can’t go anywhere without the wind…that’s how it felt with the music.
I took it at 10 a.m. and then I was in a cab by 5 p.m. The peak and the trail-off must have been quite predictable because we did the same schedule with the higher dose. That time, the psychedelic experience was more pronounced. At first I was cold, shivering. I adjusted to that, but then my breathing felt weird and I was worried I would have to concentrate on it all the time. But I had some reassurance from the guide. The music also pushes you. We can all share a common feeling of sad music but it hits you a lot harder under the experience of psilocybin. It goes into you. So it pushed me in that direction, and I had some poignant moments and a sense of letting go. I saw the grief differently, and had a realization that it was really negative for me.
After about a week I was out with some friends, and you know that feeling when you’re in a stuffy room and you open the window and a breeze blows through? That’s how I felt. I thought that was an unfamiliar feeling, but nice.
The drug, the music and the counselor are like the golden triangle. And the feeling of the depression being lifted lasted for at least a year after the treatments.