NEW YORK, June 8, 2020 /PRNewswire/ -- While the global death toll caused by the pandemic is well-publicized, a lesser-known side effect of the ongoing pandemic is the historic rise in mental illness that it has generated. Due to the stress, suffering, and isolation caused by the disease, depression is at a record high. But depression doesn't strike alone. With it comes anxiety, substance abuse, post-traumatic stress disorder, and suicide. To address these problems, select pharmaceutical companies are researching psychedelic-based medicines, which represent potentially the most significant innovation in mental health treatment since the development of prozac in the 1980s. While most pharma giants continue to push traditional mental health offerings, others—namely, Mind Medicine (MindMed) Inc. (NEO:MMED) (OTCQB:MMEDF), Champignon Brands (CSE:SHRM) (OTCQB:SHRMF), Numinus Wellness Inc (TSXV:NUMI) (OTC:LKYSD), Seelos Therapeutics, Inc. (NASDAQ: SEEL), and Johnson & Johnson (NYSE:JNJ) — are using novel, psychedelic therapies to tackle the mental illness epidemic gripping millions of people.
Exploring the Therapeutic Applications of LSD, MDMA, and 18-MC
Of the pharmaceutical stocks working towards the commercial launch of psychedelic-derived therapies, the one with the most advanced and diversified portfolio is likely Mind Medicine Inc. (MMED.AQN) (MMEDF.QB). In March, it became the first psychedelics-focused pharmaceutical company to go public, choosing to list on the NEO exchange. As one would expect, there was considerable excitement surrounding the company's IPO.
Part of this excitement was that MindMed is a pure-play psychedelics stock. It is currently working towards the advancement of not just one, but several potential therapies derived from a handful of psychedelic drugs.
On April 1, the company signed a multi-year collaboration with the laboratory of Professor Dr. Matthias Liechti. Based out of Basel, Switzerland—which happens to be the birthplace of LSD—this laboratory is the world-leading psychedelics pharmacology and clinical research group.
Based on data it acquired from this collaboration, MindMed announced that it is launching Project Lucy to focus on LSD-based experiential therapy for anxiety disorders. The company intends to initiate a Phase 2b human efficacy trial that will focus on experiential or "hallucinogenic" doses of LSD, which will be administered by a therapist. This is the first experiential, psychedelic-assisted therapy to be added to the company's drug development pipeline.
But that's not the only application it hopes to explore with LSD. MindMed has also entered into a clinical trial agreement with Maastricht University to undertake a Phase 2a clinical trial for LSD in adult patients with ADHD. This work is being done through the company's Microdosing division, which was created to develop a portfolio of clinical trials studying the use of sub-perceptual amounts of psychedelic substances for medical purposes.
In addition to LSD, Mind Medicine Inc. (MMED.AQN) (MMEDF.QB) recently added the psychedelic compound MDMA to its research and development pipeline. This work is also based on research from the Liechti Lab, which, according to Dr. Liecht himself, has generated "a large amount of data on the pharmacokinetics, pharmacogenetics and safety of MDMA in over 10 years of clinical research." MDMA has previously received "breakthrough therapy" designation from the FDA. MindMed intends to create next-gen psychedelic therapies that combine MDMA and LSD.
The company is also exploring the therapeutic potential of 18-MC, a proprietary, non-hallucinogenic molecule based on the psychedelic ibogaine that it wants to create the "antibiotic of addiction" with. In extensive nonclinical testing, 18-MC has shown promise in helping to curb various forms of addiction, and MindMed is scheduled to begin Phase 2 trials of the drug in opioid use disorder patients later this year.
To ensure it is well funded and able to explore its various avenues of research, MindMed recently closed a short form prospectus offering. By issuing 24,953,850 units of the company at a price per unit of $0.53 CAD, it generated gross proceeds of $13,225,540.50 clearing the way for MindMed to focus exclusively on research, patents, and eventual commercialization. This now brings total funding the company has raised to just under USD$40 million.
The "Breakthrough" Potential of Psilocybin and Ketamine
Joining Mind Medicine Inc. (MMED.AQN) (MMEDF.QB) in the race to develop psychedelic-derived therapies is Champignon Brands (CSE:SHRM) (OTCQB:SHRMF), another pure-play in this space. Champignon is focused on exploring how medicines based on "magic" mushrooms can help people suffering from mental health issues. In particular, the company is exploring the potential for psilocybin—one of the primary components of magic mushrooms—to be used in treating PTSD.
Also in Canada, recently listed Numinus Wellness Inc (TSXV:NUMI) (OTC:LKYSD) has received permission to research and retail MDMA, psilocybin, psilocin, and DMT. The company hopes to scale its model of operating stand-alone centers for patients with its health solutions in future acquisitions, though as of yet does not have any clinical trials underway, which is a key metric to evaluate companies in this space.
Last year, Seelos Therapeutics Inc. (NASDAQ: SEEL) was awarded fast track designation by the FDA for its investigational intranasal racemic ketamine program. This program explores ketamine—an anesthetic medication—for the treatment of Acute Suicidal Ideation and Behavior (ASIB) in patients with Major Depressive Disorder (MDD). According to Proactive Investors, Wall Street believes SEEL's ketamine-derived offering will "reach millions of patients with post-traumatic stress disorder (PTSD) and major depressive disorder (MDD)."
Likewise, the pharmaceutical giant Johnson & Johnson (NYSE:JNJ) is advancing a depression treatment based on esketamine, a chemical cousin of ketamine. Last year, the FDA approved a nasal-spray form of esketamine as a fast-acting treatment for patients who have failed to find relief with at least two antidepressants.
The Future of Mental Illness Treatment
Over the last few years, many institutions in the US and Canada have liberalized their views regarding the research and commercialization of psychedelic-derived therapies. One major example of this is the FDA's designation of psilocybin as a "breakthrough therapy," which will open the door for other psychedelic clinical trials from Mind Medicine Inc. (MMED.AQN) (MMEDF.QB) and its peers.
A recent study revealed that—of the 30.6 million American adults who reported using a benzodiazepine, such as alprazolam (the generic form of Xanax)—more than 17% admitted to misusing the medication. According to the National Institute on Drug Abuse, benzodiazepines are involved in more than 10,000 overdose deaths annually (most often when combined with an opioid)—a five-fold increase between 2002 and 2018.
Psychedelic-derived therapies represent a promising solution to this growing problem as a non-addictive and potentially more effective alternative to traditional antidepressants and anxiety medications. What's more, the full potential of these medicines is still being explored. Investors should expect to see serious developments in both the research and commercialization of psychedelics over the next two to five years.
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