Biotechs want to unlock the psychedelics market, but it isn’t simple

Some of these company are also linked to the medicinal cannabis space, which has grown rapidly over the past five years. The combined market capitalization of ASX-listed companies with an interest in psychedelics is still relatively small, but has grown over the past year to $ 700 million.

High-profile investors have also waded into the space, with Andrew Forrest’s Tattarang making a strategic investment in West Australian biotech Emyria last year.

Emyria chief executive Michael Winlo says companies in the medicinal cannabis space are carefully working to deliver records of their products to the TGA.

Emyria is developing a range of MDMA “analogues”, or compounds, which it hopes to transform into medical treatments.

“What makes the call to reschedule [these drugs] so pertinent is that the need for more effective mental health treatments is so great, ”says Emyria boss Michael Winlo.

Winlo says supporters of a reclassification of the drugs are largely looking for a recognition that there’s evidence that substances like psilocybin have a therapeutic effect.

He does not believe that reclassifying the drugs will dramatically increase their availability. More data needs to be collected before products can come to market.

“We still need to establish a reliable supply of ‘pharmaceutical quality’ products and, more importantly, clinical services with the appropriate facilities and sufficiently trained and vetted staff,” he said.

“Emyria is committed to participating in this process and helping meet the patient need for new treatments while also helping gather the required clinical evidence with patients.”

Optimism about the revenue potential of psychedelic medicines has grown the past two years, and US industry tracker Data Bridge predicts the sector could be worth $ US10.75 billion ($ 15.1 billion) annually by 2025.

Investors have piled into newly listed stocks overseas in the hope of chasing growth, but many have felt a come down over the past six months. The AdvisorShares Psychedelics exchange-traded fund, which tracks US psychedelics stocks, is down by close to 50 per cent year-to-date, with many small-cap biotech stocks being sold off heavily amid broader market turbulence.


Companies like ATAI Life Sciences, backed by Peter Thiel, have also lost share price momentum this year, with the stock down 42 per cent. Thiel and Atai founder Christian Angermayer have also invested in Australia, backing post-traumatic stress treatments developer Bionomics back in 2020.

While clinical trials of psychedelic treatments are being run right across the US, the American regulator is also waiting for peer reviewed evidence before psychedelic treatments go mainstream.

In Australia, the Therapeutic Goods Administration outlined its view of the data clearly in the delegate’s decision about the regulation of psilocybin last year.

“Although findings from clinical trials are promising … further evidence is required to establish therapeutic value and outweigh the risks from misuse or diversion for illicit use across the supply chain that may arise from any down-scheduling.”

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