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.