Psilocybin, a psychedelic compound found in “magic” mushrooms, is slowly, but surely, working its way into the mainstream. Any investor that is not paying attention to slow re-shaping of the stigma around psychedelics is missing the early days of cannabis reform when cities started relaxing regulations and research started accelerating to validate the multitude of therapeutic benefits of cannabinoids.
The sea change ranges from Main Street to Wall Street. Earlier this month, Denver celebrated the one-year anniversary of becoming the first U.S. city to decriminalize psychedelic mushrooms, with Oakland and Santa Cruz later following suit. In Oregon, nearly enough votes have been collected to get a vote for legalizing psilocybin for therapeutic use on the November ballet. Similar activities are ongoing in other states related to opening up usage of psychedelics for hard-to-treat diseases and conditions.
To that point, a search for “psilocybin on Clinicaltrials.gov now shows 38 studies, with the drug being indicated for treating a wide array of maladies from cluster headaches to anorexia to Alzheimer’s disease.
Big money is starting to fall into line and that is where retail investors should really be taking cues. London-based Compass Pathways recently raised $80 million to fund Phase 3 clinical development of its psilocybin therapy for treatment-resistant depression.
The Pioneer in Psilocybin for Obesity
Later this year, NeonMind Biosciences, a majority-owned subsidiary of The Yield Growth Corp. (CSE: BOSS) (OTCQB: BOSQF) will be adding its name to the list of early entrants into studies of psilocybin and the first to be evaluating the compound to reduce food cravings and improve weight loss.
The optimism for this indication is owed to the effect of psilocybin to activate serotonin receptors. Serotonin is a brain chemical strongly linked to mood and appetite, theorized to also directly contribute to fat gain.
“We are very interested in furthering studies to test various dosing regimens for NeonMind to see the effects that psilocybin may have on the serotonin receptors that regulate food cravings,” commented Dr. William Panenka, Director of TLS.
This is a massive market opportunity that many companies have tried unsuccessfully to tap into with conventional small molecule drugs. Novo Nordisk (NYSE: NVO) is showing that it can be done, even with its Saxenda suffering a setback this year when England’s National Institute for Health and Care Excellence rejected Saxenda, citing cardiovascular side effect concerns, along with mumblings of issues with the hefty price tag.
Being overweight is one of the biggest problems in the world today. According to the World Health Organization, more than 1.9 billion adults were overweight in 2016. Analysts are MarketsandMarkets estimate the global market for weight loss and weight management at a stunning $245 billion.
Quick and Inexpensive Study, Initial Data Possible in 2020
NeonMind has this week checked two significant boxes on its way to commencing studies: identifying a supplier of synthetically created psilocybin in Canada and a laboratory to conduct the studies in Canada. Synthetically created psilocybin ensures consistency, a must in identifying profiles of a drug potentially heading for clinical trials.
The milestones are part-in-parcel to an agreement with contract research organization Translational Life Science (TLS) to complete the study design. The pact further defines that TLS and NeonMind will collaborate on evaluation of psilocybin or fellow indole hallucinogens psilocin on food cravings, metabolism, food addiction and glucose and hormone levels. On that point, Novo Nordisk’s Saxenda shares the active ingredient (liraglutide) as Novo’s popular Type 2 diabetes drug Victoza.
NeonMind is out in front of protecting its IP on this matter. A provisional patent application has already been filed to protect the invention that the administration of psilocin and/or psilocybin results in overall weight loss in individuals by reducing food cravings, counteracting compulsive overeating, improving quality of diet, increasing metabolism, treating diabetes, regulating blood glucose and reducing susceptibility to cardiovascular disease, high blood pressure, diabetes mellitus and other illnesses associated with obesity.
The next milestone paving the way to research is obtaining an exemption for the Canadian Minister of Health to allow the use of a controlled substance in research studies. This is expected within a few months, based upon experience by the lab to receive such exemptions previously. The exemption will allow the lab to place the order with the psilocybin supplier.
TLS expects the initial research to cost only $250,000 and the time frame to completion of just six months. NeonMind has earmarked capital previously raised and intends to use funds raised through a planned IPO for the research.
Investors will be keen to know it is anticipated that initial readouts are anticipated within a few months of the study’s outset. The study’s start is targeted for the fall of 2020, suggesting the potential for valuable data to be received by the end of the year.
“Cannabis reformation is proving a valuable asset in paving the way for research of psychedelics. It took decades for some to finally concede that cannabinoids have therapeutic merit to address areas of unmet medical need where conventional medicines have repeatedly failed miserably,” commented Penny White, CEO of The Yield Growth Corp. in a phone conversation with Baystreet.ca. “The time is right to give psychedelics the same latitude of comprehensive studies in a controlled environment to build an empirical database on safety, efficacy, pharmacokinetics, etc., just like any other compound. NeonMind has positioned itself at the forefront of this space with respect to controlling weight and food cravings and we couldn’t be more excited about the opportunity and the research in front of us.”
A vertically integrated company, The Yield Growth Corp. has an interest in both companies, directly and indirectly. BOSS owns about 68% of the issued and outstanding stock of NeonMind, which owns 18% of TLS.
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