Psychedelics’ path to mainstream medicine one of opportunity

Vital to companies seeking to attract investors will be the intellectual property they develop and the protections they can obtain for it. However, there are also questions of public policy and perception to address if psychedelic pharmaceutical companies are to take new treatments to market.

Wired has dubbed the transformation of psychedelics from popular recreational drugs of the 1960s to potential mainstream medicines today as a “psychedelic renaissance”.

Companies such as Atai Life Sciences, Compass Pathways and Cybin are among the companies leading exploratory research into the potential of hallucinogens for treating illnesses such as anxiety, depression, post-traumatic stress disorder (PTSD), and schizophrenia. Others active in the market, like Seelos Therapeutics, have been testing whether psychedelics can treat other neurological diseases, such as amyotrophic lateral sclerosis (ALS) and Parkinson’s.

There have been early signs of promise, with the recent publication of a peer-reviewed study undertaken by Compass Pathways, which has shown that psilocybin, a component of ‘magic mushrooms’, has shown promise in the treatment of depression, providing fresh evidence of this.

The impetus for this research is clear. The World Health Organization estimates that one in eight people globally live with a mental disorder, so developing a new treatment could be transformational for millions of people and highly lucrative for the psychedelic pharmaceutical companies and their investors.

One challenge for psychedelic pharmaceutical companies is raising the finance necessary to undertake research and development, from lab testing to clinical trials, and to take their products through the lengthy regulatory approval process to demonstrate that the treatments are safe and effective.

Investors are drawn to companies that can demonstrate value, so building a brand and protecting innovations is important.

Innovation can come in a variety of forms, from developing new substances with therapeutic effect, to identifying improvements in the dosage and mechanism of delivery of treatments. Patenting inventions will give psychedelic pharmaceutical companies an opportunity to exploit monopoly rights in a market and commercialise that advantage. They can expect prospective investors to undertake due diligence on the patent rights, and other intellectual property they hold, before parting with their cash.

Regulators and investors are not the only stakeholders that psychedelic pharmaceutical companies will have to convince if new treatments are to be successfully marketed.