Enveric & MagicMed: Combining Drug Discovery with Clinical Expertise
September 9th, 2021
Psychedelics, Top News
Enveric Biosciences Inc.’s (NASDAQ: ENVB) focus has been on discovering and developing cannabinoid-based therapeutics for patients suffering from the side effects of cancer treatments. With the acquisition of MagicMed Industries, the company also sees an opportunity in cancer-related distress from anxiety, depression, and PTSD.
Emerging research suggests that psychedelics could play a key role in addressing these mental health conditions. For example, the FDA approved Spravato (esketamine) for treatment-resistant depression and suicidal ideations while granting “Breakthrough Therapy” status to psilocybin and MDMA to treat various mental health disorders.
MagicMed operates on the cutting-edge of psychedelic research, using artificial intelligence to identify novel psychedelic molecules and shorten pre-clinical timelines. These patentable drug candidates enhance the therapeutic effects of naturally occurring molecules. The combined company will initially focus on psychedelic treatments for cancer-related PTSD.
Drug Discovery + Clinical Expertise
Enveric Biosciences has tremendous experience in clinical research and development. For example, the company recently received approval for a Phase 1/2 clinical trial for EV101, its synthetic CBD therapeutic, in Tel Aviv, Israel, and is creating a Proof of Principal for the Diverse Bio Assets that it licensed earlier this year.
A key reason that the MagicMed acquisition is so compelling is that it adds a valuable drug discovery platform to bring the whole process—drug discovery through drug approval—under one roof. As a result, the company aims to bring better psychedelic and cannabinoid therapeutics to market more quickly than they could as independent businesses.
The company recently leased a new discovery facility at the University of Calgary, increasing the efficiency and focus of its R&D activities. The company also doubled the size of its team in Calgary to accelerate the synthesis and screening of drug candidates while bringing on experts in Project Management and Clinical Research.
Building Long-term Value
Enveric Biosciences will continue to advance its three existing clinical programs, including EV101, EV102, and EV104, and continue to build out its intellectual property portfolio. On August 17, the company was granted US Patent No. 11,090,275 for the use of CBD to treat cancer, marking the first of three pending patent portfolios in the area.
At the same time, MagicMed has already built a library (referred to as the Psybrary™) of potentially disruptive psychedelic molecules that are patent-ready. The company has already filed 13 patents in psilocybin and DMT derivatives and plans on expanding into other psychedelics. These patents alone protect 125 million derivative molecules with 200+ already synthesized.
There is also an opportunity for cross-over with drug discovery. MagicMed’s platform can be used to identify patentable cannabinoid-based molecules that enhance therapeutic effects, enabling the company to further build out a cannabinoid-based patent portfolio. These products could also mesh well with Enveric’s existing clinical pipeline.
Enveric Biosciences’ shareholders will vote on the MagicMed acquisition on September 14, 2021. Once approved, the combined business will focus on progressing its existing clinical pipeline while scaling up its drug discovery efforts to enter the psychedelics industry rapidly. Investors may want to keep a close eye on the stock given these catalysts.
Earlier this quarter, the company also filed its 10-Q quarterly financial report showing $20 million in cash on its balance sheet with no debt and an efficient cap table. As it ramps up R&D spending to target mental health initiatives, the strong balance sheet provides flexibility to execute on its plans and pursue further M&A opportunities as they arise.
Investors may want to take a closer look at the stock as it solidifies its unique position as one of the few NASDAQ-listed companies focused on mental health.
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