Mushrooms to Pills: How Psychedelic Drugs Will Come to Market


Ryan Allway

August 11th, 2020

App, Exclusive, Psychedelics, Top Story


Psychedelic drugs, such as psilocybin, have a long history of medicinal use. In the 1950s, psychedelics had a short-lived relationship with psychology and psychiatry before a legislative ban in the mid-1960s halted research. The 1990s saw renewed research interest but it wasn’t until the legalization of cannabis that things really took off again.

The next era of psychedelics research will likely involve the transition from a plant-based alternative treatment to a prescriptible pharmaceutical drug. By understanding and standardizing the mechanisms of action, psychedelics could become the next blockbuster class of drugs designed to treat a wide range of mental health disorders.

Let’s take a closer look at the journey that psychedelics will take from plant to pill and how some companies are approaching the process.

How Drug Development Works

Modern drug development is an extremely time-consuming and costly process. While it may seem like a lot of overhead, the carefully regulated drug development process is designed to ensure the safety of patients and the efficacy of drugs. These assurances build trust in the medical system among patients and justify the cost of treatment options.

Drug Development Process – Source: Technology Networks

According to a 2020 study, the estimated median capitalized research and development cost per product was approximately $1 billion, including expenditures on failed clinical trials. The cost of these clinical trials varied depending on the type of drug, target indication and any special statuses, such as an orphan drug or fast-tracked status.

The high cost of drug development means that most biotechnology companies, which conduct early research, seek partnerships with Big Pharma companies to share the costs of later stage clinical trials. Interestingly, these larger companies often have blockbuster drugs approaching patent expiration, which spurs increased investment by the larger companies into promising new drug candidates.

Drug Formulation Techniques

Many pharmaceuticals are plant-derived, and psychedelics are no exception. Starting from a plant with known medicinal properties, drug developers begin by identifying the natural molecule responsible for the beneficial health effect.  They then seek to improve on the natural molecule by developing new derivatives based on the chemical structure of the original.  Researchers compare the new derivatives against each other and the original, seeking an optimal drug candidate with the best possible safety and efficacy profile.  Almost always one of the new derivatives is found to be significantly better than the original molecule, and the drug developer then proceeds to perform clinical trials on the new derivative.  Because of the significant investment required for clinical trials and drug approval, drug developers always want the best possible candidate to proceed with, which requires having as many new derivatives as possible to screen through to maximize their chances of finding it.

To create small molecule drugs, which are readily deliverable in pill format, drug developers have historically relied mainly on chemistry techniques.  In recent years a new approach, synthetic biology, has also arisen. Each approach has positives and negatives:

  • Chemistry: Chemistry enables you to cost-effectively make large batches of molecules, but the variety of molecules that can be created is limited.
  • Synthetic Biology: Synthetic biology enables the creation of a significantly greater diversity of new molecules, but the technology is so new that commercial large scale manufacturing generally requires substantial additional investment in time and money to build a cost-effective production platform for each new derivative. The biggest issue with synthetic biology is that the more steps are required in the process, the lower the yield will be, thereby increasing the per kilogram cost of manufacturing.

The drug developer’s ultimate goal is to develop and have approved for marketing patent-protected derivatives that are better than the original molecule in terms of both safety and efficacy, and are also not so expensive to manufacture that they are unfeasible as a commercial product. 

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Finding a Unique Approach

There are some companies taking innovative approaches to psychedelic drug development, including MagicMed Industries Inc., which aims to accelerate drug development by rapidly producing a large library of new psychedelic molecule derivatives using a hybrid between synthetic biology and chemistry to achieve both diversity and yield.

Click the image to see MagicMed’s Financing Presentation

MagicMed’s team has worked on numerous synthetic biology projects in the past, including a 20-step process to make vinblastine, a cancer drug from the periwinkle plant, and a 15-step bioconversion process to make thebaine, a feedstock ingredient used in the pharmaceutical industry to chemically synthesize most of the currently marketed opiate drugs, including both analgesics and anti-addiction drugs. Most recently, they were part of the team at Willow Biosciences (WLLW-TSX), working to develop a 4-step process to make cannabigerolic acid (CBGa), and 5-step processes to make cannabidiolic acid (CBDa) and tetrahydrocannabinolic acid (THCa).  

  • CEO Dr. Joseph Tucker is a seasoned executive who has built several publicly-traded biotech companies and has worked closely with the rest of the MagicMed team since 2013. As CEO, he’s focused on partnership development, capital raising and the pursuit of an exit strategy.

 

  • COO Dr. Jillian Hagel has held COO and VP roles in the biotech industry with a focus on science team coordination and patent filings. As COO, she will lead the science team’s focus on delivering partner milestones.

 

  • CSO Dr. Peter Facchini has held previous roles as Chief Science Officer at public and private biotech companies. As a recognized leader in molecular derivatives, he has published more than 160 scientific papers and holds 20 patents in the field.

The company plans to take a combined approach to new derivative creation that leverages shorter, more cost-effective synthetic biology processes followed by chemistry to achieve both diversity and yield. By combining the best of both worlds, the company aims to create a large library of psychedelic molecules for its Psybrary™, from which Big Pharma and other companies can license new derivatives to accelerate and enhance the development of new psychedelic-based drugs for a number of significant mental health indications.

From an investment perspective, MagicMed’s business model pursues a diversified partnership base in which each partner pays research costs plus deliverable and milestone payments, which supports near-term positive cash flow. The long-term picture could be even better if partners are successful in commercializing products and pay long-term royalties.

Click here to receive an investor presentation and corporate updates 

Looking Ahead

Psychedelics are quickly moving from a plant-based alternative therapy to a pharmaceutical drug that doctors can prescribe. While there are many approaches to the market, MagicMed is taking a combined approach designed to build a library of psychedelics molecules—the Psybrary™—that it can partner out with other companies to handle drug development. 

MagicMed Industries is targeting a public listing during the first or second quarter of 2021, according to its investor presentation (slide above). For more information on MagicMed, visit the company’s website at www.magicmedindustries.com or download the investor presentation.

Resources

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5603818/

https://jamanetwork.com/journals/jama/article-abstract/2762311

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Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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