Psychedelics the "next big thing" in treating mental health disorders
U.K.-based COMPASS Pathways' ( CMPS +2.1%) strong U.S. debut (shares up 140% since September 18) is the clearest signal yet that investors are bullish on the prospects of using psychedelics to treat mental health disorders including treatment-resistant depression (TRD).
Its candidate, COMP360, is a synthetic form of the magic mushroom ingredient psilocybin.
Early investors include billionaire Peter Thiel who owns a 7.5% stake. He's not the lone bull on the emerging field. Fellow billionaires Steve Cohen and Bob Parsons as well as Hyatt hotel heir Joby Pritzker have donated funds to the Multidisciplinary Association for Psychedelic Studies (MAPS), a nonprofit research and educational organization focused on the prudent legal use of psychedelics and marijuana in medicine.
A 216-subject dose-ranging Phase 2 clinical trial in TRD is in process with an estimated primary completion date in May 2021. The primary endpoint is the change from baseline in a depression scale called MADRS at week 12.
A "psilocybin" query in ClinicalTrials.gov identified 53 studies, nine competed. 24 are recruiting patients. Diseases being tested include major depressive disorder, anorexia nervosa, early Alzheimer's, alcohol use disorder, cluster headache, concussion headache, smoking cessation, TRD, anxiety disorders and Parkinson's disease psychosis. Most are early stage but seven are Phase 2. No Phase 3s have launched yet. Five studies are being funded by industry, four by COMPASS.
Another player, New York-based Mind Medicine ( OTCQB:MMEDF), counts Shark Tank star Kevin O'Leary and Toms Shoes founder Blake Mycoskie as investors. Shares are currently listed on Canada's NEO exchange, but it recently filed for an uplisting on Nasdaq.
Yet another player is German biotech ATAI Life Sciences AG, owner of the largest single stake (29%) in COMPASS ( prospectus, page 212), whose investors include billionaire Mike Novogratz, Iceland bigwig Thor Bjorgolfsson and a line-up of institutional investors such as New York's Subversive Capital and PE shop Bail Capital.
Mega cap Johnson & Johnson ( JNJ -0.4%) is not standing idly by. It's Spravato (esketamine) nasal spray was approved in the U.S. in March 2019 for TRD followed by a nod in Europe in December 2019.
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