A Bit of a Preamble
The world of psychedelics has been a bit of a rough ride lately, and it’s hard to always find positive stories. So we decided to take a bit of time this week to focus on that. Whether it is the kicking that most companies have taken on the stock market, the lack of ambition in research, or the lack of integrity the industry has been showing, there is a lot that needs to be discussed.
This is intended to be opinion, and just opinion. But who are we really if we do not try to hold the industry accountable. RoP has always made an effort to be an industry proponent, and once in a while that means deriding it a little. So strap in for a fun one this week. But first let’s start with some good news.
A time Sensitive Issue
In the best case scenario, therapy can take months, even years, to see results. Psychedelics like MDMA and psilocybin are showing promise in reducing those timelines. However, there is an issue with psychedelics, most notably is that their effects can last for up to 12 hours. That in itself is a barrier when it comes to scaling treatments. The length of the experience is an obstacle to mainstream adoption… enter biotech focused companies. Many of them are focusing their best efforts on minimizing the psychedelic experience timeline. Modifying the psychedelic molecules to have a reduced effect time may make the therapy more attractive. Both to consumers and insurance companies.
Is 2 hours the ideal window
Two hours is not an arbitrary number. Treatments with ketamine, and Spravato, an FDA-approved ketamine derivative, require two hours to be effective. Short treatment time, coupled with them being the only legal psychedelics have helped ketamine-assisted therapy thrive. Two hours is easy to deploy, to scale, and requires less commitment from patients.
Or is it?
The big question is whether or not there is actually any need to involve “the trip” at all. There is a debate among researchers, academics and companies. Whether the psychedelic experience or the triggering of neuroplasticity is responsible for the potential therapeutic effects of these drugs. Some researchers and biotech entrepreneurs believe the psychedelic experience might not be necessary at all.
- We’ve discussed this company before. Delix therapeutics is aiming to remove the trip from psychedelic drugs, while still hoping to treat mental health issues.
So then what?
Psychedelic-assisted therapy has tremendous promise, but no one has really crossed the finish line for an efficacious treatment option. The big question has yet to be answered. is it the psychedelic experience, the triggering of neuroplasticity, or both are responsible for the potential therapeutic promise. The question of how long a psychedelic trip needs to last is not the only issue before the industry can make a move forward. Questions like the types of clinical coverage and insurance issues need to be raised as well.
Microdosing, Redux
An international study led by the University of British Columbia’s Okanagan campus suggests that repeated, small doses of psychedelic drugs can help treat some mental health issues.
The study showed that there is a clear association between microdosing and fewer symptoms of depression, anxiety and stress. According to the lead author Joseph Rootman.
The Study
- The study followed more than 8,500 people from 75 countries using an anonymous self-reporting system. About half of them were microdosing.
- The study reported health and wellness were the most prominent motivations for participants.
The study is also the first to systematically examine the practice of stacking. The practice of combining microdosing with other substances like niacin, lions mane mushrooms and cacao. Which some believe work in conjunction to maximize benefits.
There is supposedly an epidemic of mental health problems, with existing treatments that don’t work for everyone. The team at UBC believes that science needs to follow the lead of people who have been using psychedelics to improve their well being and taking initiatives on their own to do so.
It took a few years, but it seems like over the last few months there has been a slew of new academic institutes standing up and recognizing the benefit of psychedelic research. In the last year alone the following institutes have announced new psychedelic research centers.
New Research Centers:
All of the listed centers have unique goals and planned outcomes for their studies. But they all have one thing in common. They are all studying the potential health applications of psychedelics (personally I want to know which school is going to bite the bullet and announce their “best location for an acid trip” research).
Previous psychedelic research seems to be lost to time. People have forgotten that the 1960’s was the hayday for drug research. All of a sudden, as big tech pushes the idea that psychedelics are a “magic bullet”. There is Increased interest in research. For universities, it comes down to several specific attributes.
Why Now?
- Promising research, especially with MDMA and psilocybin
- Buy-in from academic institutions
- Increased funding, especially from wealthy donors and biopharmaceutical companies
- Ineffective mental health treatment for too many patients using existing therapies
- Renewed public interest in and experience with psychedelics
For the general public, this is a great thing. Schools opening up psychedelic research programs signals that these things should be taken seriously, and are not just a fantasy.
There is a bit of a reason to be skeptical though. These centers seem to be popping up and led by people who haven’t necessarily done the rigorous research. The studies they are performing are simple, not focused on the right questions. It seems the drive to use the substances is taking over the meticulous nature of drug research.
Is the “Mush Rush” over?
Psilocybin, LSD, Ketamine, Mdma and many more psychedelic drugs have been making their way into the public eye over the last few years as more and more companies engage in the business of drugs. As these companies went public, the money followed. Like the Green Wave before it, psychedelics attracted money. Lots of it. That fever pitch seemingly ended in March. Since then, despite whether or not a company is producing novel molecules, has promising clinical trials, or are on the forefront of pushing back regulation, their stock prices have not been performing well.
What is the cause of this sudden downturn? Some experts are blaming cannabis. They look to the retail investors who assumed that the psychedelic industry was going to be akin to cannabis. They thought that these would be revenue producing companies, rather than years away from profit. The focus on biotech and research seems to have created a misunderstanding among less informed investors, and created an exodus.
Cannabis companies were focused on driving revenue, but the new drug is research. There is no real revenue to be found yet. Psychedelic companies are focused on specific molecules and their effect on mental health. It will be years before these companies realize profits.
- The unfortunate performance of public psychedelic companies is evident when reviewing the world’s first psychedelic ETF. Since its launch in January, the Horizons Psychedelics Stock Index ETF has plunged by 36 per cent.
- MindMed shares have dropped by over 50% since February.
- Compass Pathways stock is down over 30%.
- Smaller stocks, like Numi Wellness, have seen their stocks fall as well.
Casual investors seemed to view psychedelics as a “get rich quick” investment. Months passed and companies still weren’t turning profits, so they left. Psychedelics is a retail money dominated sector, so it’s suffering. As the fair weather money leaves the industry, it doesn’t mean that things are over. It means that the market may just be in a lull period. Investors need to understand the long term potential of what they are investing in.
It was inevitable that this was going to happen. Psychedelics have become so prevalent these days that it is hard to go onto the internet without seeing a “psychedelic revolution” article. At the forefront of this new revolution is an alliance between traditional psychiatry and financial backers. Many of whom come from the world of startups, VC/PE, and Big Tech.
It cannot be denied that research into the medicinal use of these drugs is important work. Some may even call it imperative to advancing how humans understand the brain. BUt this research involves business people. Many of whom have never experienced, or been a party to, the psychedelic experience.
Big Tech
Is it strange that Big Tech – which is currently under fire for nearly breaking down the democratic process and enabling the spread of misinformation – is at the forefront of the “psychedelic revolution”? Why would these companies suddenly be concerned with public well being? Could it possibly be the fact that current psychedelic treatments (ketamine) can cost up to $1,000 per treatment? And that it is out of pocket, not covered by insurance.
It’s naive to think that for-profit businesses will be satisfied by limiting themselves to specific, diagnosable mental health conditions. While this may be the main path forward for now, it is unlikely to stay that way. This would mirror the past tactics of pharmaceutical companies when deploying SSRI drugs like Zoloft and Prozac.
Mental Health, on the decline?
You’ve heard it before, and we have even said it here. Mental health post pandemic, seems to be on the decline. But in reality, is it? When psychedelic companies are in the media, they often mention that mental health issues are on the rise, but that is not necessarily the case. There is actually a disagreement among experts on this.
So why take this tactic? One potential reason is that a declining global mental health condition and broadening customer base means fatter profits and more potential customers. A recent press release for Nushama, a New York City-based ketamine clinic, listed an array of conditions ketamine could potentially treat, including depression, anxiety, chronic pain, addiction, “trauma-induced mood disorders,” “trauma-related OCD,” eating disorders, and IBS.
- While this looks like a promising solution, medical researchers from Harvard have called it “baloney”. Stating that the only evidence based issue that ketamine can cure is treatment resistant depression.
So coincidence with mental health “decline” and the rise of psychedelics may be out of the question.
Blurred Lines
The lines between mental health and everyday stressors are getting muddier and muddier. This opens up a hell of a potential piggy bank for companies that could take advantage. Financial backers are marketing their products to anyone from people with actual mental health issues to just casual worriers and the spiritual.
Conclusions?
None of this was to say that the psychedelic industry is doomed, or evil. Nor is it meant to inspire negative outlooks. It is a plea to the public to understand what we are entering into. An understanding that if we don’t take the right path, we could hand the whole thing over to companies that are focused only on profit. While at the same time waxing poetic about mental health cures, euphoria and claiming they have found the path achieving mental wellness, just like they did in the 1980’s.
- A potential “magic mushroom” cure for depression could give stagnating psychedelic stocks a leg up. But only if the results of a study expected before year end are encouraging.
- Psychedelic researcher Rick Doblin speculates that psychedelics and Psychedelic retreats — in countries like Costa Rica and Jamaica. Where many psychedelic substances are allowed, as well as among a shadow network of shamans in the United States who share drugs and details over social networks — are experiencing widespread growth. Their rise overlaps with an increasing popularity of cannabis tourism during the pandemic.
- Psyence Group Inc. (CSE: PSYG | OTCQB: PSYGF) will break new ground as the first psychedelic company invited to speak at the 15th Annual Global Wellness Summit. A gathering of international leaders in the $4.5 trillion global wellness economy.
