Lars Christian Wilde, Compass co-founder and CBO (via YouTube)

Mush­room mag­ic draws $80M in­jec­tion for Lon­don-based men­tal health start­up

The coro­n­avirus out­break has in­ter­fered with a mid-stage de­pres­sion tri­al test­ing its psilo­cy­bin com­pound, but the mag­ic of the mush­room has scored Pe­ter Thiel-backed Com­pass Path­ways an $80 mil­lion in­jec­tion in fresh fund­ing.

Ex­as­per­at­ed with the of­ten-in­ef­fec­tive ex­ist­ing slate of an­ti­de­pres­sants, the com­pa­ny set up shop in Lon­don in 2016 and made a bee­line for psilo­cy­bin, the psy­choac­tive in­gre­di­ent in mag­ic mush­rooms. It re­ceived the FDA break­through ther­a­py sta­tus for the com­pound for treat­ment-re­sis­tant de­pres­sion in 2018.

The study, de­signed to re­cruit 216 pa­tients across sites in North Amer­i­ca and Eu­rope, had be­gun re­cruit­ing when the coro­n­avirus out­break un­fold­ed. “We de­cid­ed to — with the Covid cri­sis — pause the study for now, un­til there’s bet­ter vis­i­bil­i­ty on how the world will de­vel­op,” said co-founder and chief busi­ness of­fi­cer Lars Chris­t­ian Wilde in an in­ter­view. “The pos­i­tive news is that we have a huge num­ber of pa­tients that have com­plet­ed pre-screen­ing and we’re ready to start over again when the world nor­mal­izes.”

Psilo­cy­bin is a sub­stance that in most re­gions is clas­si­fied as hav­ing no med­i­c­i­nal val­ue, falling in the same cat­e­go­ry as chem­i­cals such as LSD. The com­pa­ny’s man-made ver­sion of the chem­i­cal — which is il­le­gal across ge­o­gra­phies in its nat­ur­al fun­gi form — had been well-tol­er­at­ed in an ear­ly-stage, place­bo-con­trolled tri­al in 89 healthy vol­un­teers in De­cem­ber.

“I think one thing that stands out not on­ly in our healthy vol­un­teer’s study but al­so in the ear­li­er tri­als, is that typ­i­cal­ly pa­tients re­port a deep sense of grate­ful­ness for the ex­pe­ri­ence, a re­con­tex­tu­al­iza­tion of their suf­fer­ing, and of­ten­times in­sight in­to how and what led them to be­come de­pressed, and al­so see­ing so­lu­tions on how to over­come their de­pres­sion,” said Wilde, who claimed that one ses­sion with mag­ic mush­rooms had cured his anx­i­ety dis­or­der and de­pres­sion, which led to the cre­ation of Com­pass along with his co-founders.

The new fund­ing round in­clud­ed the par­tic­i­pa­tion of ATAI Life Sci­ences (al­so co-found­ed by Wilde); as well as new in­vestors, in­clud­ing the Mc­Quade Cen­ter for Strate­gic Re­search and De­vel­op­ment (a mem­ber of the glob­al Ot­su­ka fam­i­ly of phar­ma­ceu­ti­cal com­pa­nies), Founders Fund, Able Part­ners, Cam­den Part­ners Nexus, Per­cep­tive Ad­vi­sors, Skyviews Life Sci­ence, and Soleus Cap­i­tal.

Giv­en glob­al spikes in al­co­hol con­sump­tion and symp­toms of lone­li­ness due to iso­la­tion mea­sures, in the coro­n­avirus era men­tal health treat­ments are need­ed now more than ever, Wilde said, not­ing that the plan was to orig­i­nal­ly raise $70 mil­lion.

Psy­choac­tive in­gre­di­ents, whether de­rived from cannabis, LSD or mag­ic mush­rooms, have long cap­ti­vat­ed men­tal health re­searchers. Nav­i­gat­ing the com­plex le­gal hur­dles to ac­cess these com­pounds has thawed the pace of re­search but with mo­ti­vat­ed sci­en­tists and a grow­ing bur­den of poor­ly treat­ed men­tal health con­di­tions, the ecosys­tem of psy­che­del­ic re­search has ex­plod­ed. In Sep­tem­ber, Johns Hop­kins un­veiled it had scored $17 mil­lion to open its very own cen­ter of psy­che­del­ic re­search to ex­plore the im­pact of psy­che­del­ic com­pounds on cre­ativ­i­ty and well-be­ing.

But the brim­ming en­thu­si­asm comes with a healthy dose of skep­ti­cism. Crit­ics wor­ry that the bur­geon­ing re­search could in­cen­tivize un­bri­dled use of non-phar­ma­ceu­ti­cal ver­sions of these drugs and that clin­i­cal tri­al da­ta could be cloud­ed by the fact that place­bo-con­trolled stud­ies are not nec­es­sar­i­ly dou­ble-blind­ed, be­cause it is far too easy to de­ter­mine which group of pa­tients have been giv­en a place­bo.

In a bid to com­bat some of these chal­lenges, the mid-stage tri­al has three arms — eval­u­at­ing a 1 mg, 10 mg and 25 mg dose of psilo­cy­bin.

“Based on ear­li­er clin­i­cal work at Johns Hop­kins, and we’re very con­fi­dent that the 1 mg dose doesn’t have any sub­jec­tive ef­fects and for the pa­tient, but the ben­e­fit of such a de­sign is that we can at least deal with ex­pectan­cy bias — every pa­tient will re­ceive no­tice that they will re­ceive psilo­cy­bin,” Wilde said, adding that the com­pa­ny is al­so us­ing blind­ed raters, who have not par­tak­en in the ther­a­py ses­sion.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

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Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.

Covid-19 roundup: Mod­er­na read­ies to en­ter PhI­II in Ju­ly, As­traZeneca not far be­hind; EU ready to ne­go­ti­ate vac­cine ac­cess with $2.7B fund

Moderna may soon add another first to the Covid-19 vaccine race.

In March, the mRNA biotech was the first company to put a Covid-19 vaccine into humans. Next month, they may become the first company to put their vaccine into the large, late-stage trials that are needed to prove whether the vaccine is effective.

In an interview with JAMA editor Howard Bauchner, NIAID chief Anthony Fauci said that a 30,000-person, Phase III trial for Moderna’s vaccine could start in July. The news comes a week after Moderna began a Phase II study that will enroll several hundred people.

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Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

RA Cap­i­tal, Hill­house join $310M rush to back Ever­est's climb to com­mer­cial heights in Chi­na

Money has never been an issue for Everest Medicines. With an essentially open tab from their founders at C-Bridge Capital, the biotech has gone two and a half years racking up drug after drug, bringing in top exec after top exec, and issuing clinical update after update.

But now other investors want in — and they’re betting big.

Everest is closing its Series C at $310 million. The first $50 million comes from the Jiashan National Economic and Technological Development Zone; the remaining C-2 tranche was led by Janchor Partners, with RA Capital Management and Hillhouse Capital as co-leaders. Decheng Capital, GT Fund, Janus Henderson Investors, Rock Springs Capital, Octagon Investments all joined.

Por­tion of Neil Wood­ford’s re­main­ing in­vest­ments, in­clud­ing Nanopore, sold off for $284 mil­lion

It’s been precisely one year and one day since Neil Woodford froze his once-vaunted fund, and while a global pandemic has recently shielded him from the torrent of headlines, the fallout continues.

Today, the California-based patent licensing firm Acacia Research acquired the fund’s shares for 19 healthcare and biotech companies for $284 million.  Those companies include shares for public and private companies and count some of Woodford’s most prominent bio-bets, such as Theravance Biopharma, Oxford Nanopore and Mereo Biopharma, according to Sky News, which first reported the sale. It won’t include shares for BenevelontAI, the machine learning biotech once valued at $2 billion.