“The most contrarian thing of all is not to oppose the crowd but to think for yourself”
– Peter Thiel, Zero to One: Notes on Startups, or How to Build the Future
The renewed, widespread interest in psychedelic substances — aptly termed “the psychedelic renaissance” — resulted in many accomplishments in 2020 and generated considerable momentum to carry us forward into 2021. This observation is not a rosy color-splotched hallucination, perceptual distortion, or preconception. Rather, it is an exciting and encouraging fact!
A New Hope
It’s a no-brainer to realize that the world is grappling with a serious, pervasive mental health crisis. Government organizations, research institutions, nonprofits, and private companies continually generate illustrative statistics. According to the Institute for Health Metrics and Evaluation, nearly one billion people globally are affected by a mental health or substance abuse disorder. The resulting economic burden is forecasted to reach $4.1 billion by 2030. The COVID-19 pandemic has exacerbated the dilemma and is projected to strain mental-recovery resources to a degree unseen in modern history. Yet, people remain hopeful, and with good reasoning grounded in science; the emerging psychedelic medicine industry is formulating novel solutions to address this long-standing problem.
2020: An Impressive Picture
2020 was a year of numerous feats in the field spanning virtually all fronts — business development, regulatory advancements, social awareness and education, and research discoveries, to name a few. Highlights included:
- Psilocybin-therapy company COMPASS Pathways raised over $140 million through its IPO.
- Thiel Capital, founded by renowned billionaire investor Peter Thiel, backed psychedelic drug development company ATAI Life Sciences in its $215 million Series C round. The company is set to go public sometime in the spring of 2021.
- The Multidisciplinary Association for Psychedelic Studies Public Benefit Corporation completed data analysis of the first of two FDA Phase 3 trials of MDMA-assisted therapy for the treatment of PTSD. The results confirmed those of Phase 2 that demonstrated marked improvement.
- Oregon became the first US state to decriminalize the use of psilocybin mushrooms and other psychedelic substances. Moreover, psilocybin was legalized for its use in mental health treatment in supervised settings.
- The University of California at Berkeley announced the launch of the UC Berkeley Center for the Science of Psychedelics. The university will join a worldwide cohort of elite academic institutions with research centers dedicated to this field.
- The Conscious Fund, in conjunction with MicroDose, hosted the largest virtual psychedelics conference to date.
- A collaboration of scientists at Stanford University and The University of North Carolina at Chapel Hill, for the first time, solved the high-resolution structure of psychedelics when they are actively bound to serotonin receptors on the surface of brain cells.
Expanding Consciousness & Business
The investment landscape was rife with activity over the past year. Hallmarks included new ventures across diversified sectors, sizeable capital inflows, and the creation of new markets. Psychedelic startups continued to bridge the early-stage funding gap and capture investor attention. Multiple companies went public, such as COMPASS Pathways, Field Trip Health, Mind Medicine, and Numinus Wellness.
Investors continue to assess the viability of the psychedelic medicine industry. Their notions of its long-term potential, sustainable economics, tangible societal impact, et cetera, were all tested in 2020 and will be for the foreseeable future. Investors face the typical opportunities and challenges: cushioning irrational exuberance (which plagued the cannabis industry) with realistic expectations, all the while not losing sight of obtainable upside; conducting thorough due diligence; identifying fundamental value; and analyzing a myriad of moving pieces while somehow accounting for the financial “animal spirits” conjured by these mind-bending compounds.
In an interview with Investing News Network, Doug Drysdale, the CEO of Cybin, stated:
“Drug development takes time and is capital intensive, so investors should focus on those companies that are sufficiently capitalized and have a team with a strong track record to bring these treatments to market.”
Companies are indeed ramping up their efforts to translate product conceptualization into actualization — in part, to build a solid financial foundation and showcase team members’ abilities. Firms are undertaking ambitious growth initiatives and bolstering R&D programs, drawing on the ever-growing base of scientific research and regulatory tailwinds.
On December 17, Numinus completed the first legal extraction of Psilocybe mushrooms in Canada by a public company for R&D purposes. The company’s milestone followed its advocacy work that contributed to Health Canada’s statement of its intention to revise regulations, to permit access to psilocybin-assisted psychotherapy in the same way other investigational medicines are accessed in Canada.
On August 25, MindMed announced it would be partnering with University Hospital Basel’s Liechti Lab to combine MDMA and LSD in a groundbreaking Phase 1 trial. Combination therapies are a fascinating next-generation approach. Undoubtedly, enterprises continue to fuel ingenuity in cooperation with academic institutions, and this relationship will carry over into 2021.
2021: What Can We See?
If 2020 was a steady stream of gains, then 2021 is looking like it will be a waterfall. The industry is positioned to attract higher sums of capital, gain better mainstream visibility, and output incredible discoveries.
Public awareness and education are increasing, both at the grassroots and institutional levels. Major government agencies, such as the FDA, are now keenly aware of the promising benefits of psychedelics. Ethical business, and more broadly ESG, are becoming even more important for company leaders and shareholders.
Into the beginning of this year, companies are on pace to achieve their goals with few signs of slowing down: on January 6, Numinus signed a lab services agreement with Optimi Health Corp to advance psychedelic R&D; on January 8, COMPASS revealed it is designing an innovation lab meant to model the “clinic of the future,” in collaboration with The Sheppard Pratt Institute for Advanced Diagnostics and Therapeutics; on January 18, Havn Life announced it is supporting the establishment of “Heroic Hearts Canada,” a counterpart of The Heroic Hearts Project which provides psychedelic treatment options to military veterans. The list goes on.
Just last week, Florida State Rep. Michael Grieco shared plans to introduce a bill that would legalize psilocybin-assisted therapy in the state, which represents the first serious push for legal access to psilocybin on the East Coast. It’s also the first effort to legalize magic-mushroom access in a red state, and a potential test case that could demonstrate like cannabis legalization, access to legal psilocybin is a bipartisan issue.
The US psychedelic drugs market is forecasted to grow at a CAGR of 16.3%, reaching $6.8 billion by 2027. The road ahead will likely be one filled with new opportunities to change the way in which humanity approaches the world of mental health, pain management, and addiction. Suffice it to say, any change in an industry with very limited solutions is a pleasant one. Finally, a glimmer of new hope in a sea of old problems, only exacerbated by a global pandemic. Join us on this journey through uncharted territory.
Onwards and upwards!
Thank you to everyone who has contributed to getting us to where we are today. This industry is blessed to have an abundance of people who are passionate for the cause and take delight in helping others.
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