Panel Discussion Summary:
The Renaissance of Psychedelics in CNS Medicine
This document provides a written summary of a virtual panel discussion that was held on September 9, 2021 at the MedInvest Neurological Diseases & Mental Health Disorders Conference. This summary is not a verbatim transcript. Rather, the speak- ers’ questions and answers are paraphrased for flow and brevity. Significant efforts have been made to ensure that the speakers have been summarized accurately, and each speaker has reviewed and approved this summary.
A video of the panel discussion and subsequent question and answer session can be viewed here.
Moderator:
Varun Renjen, Associate Principal, Blue Matter Consulting
Panelists:
Henri Sant Cassia, Co-Founder and Managing Partner, The Conscious Fund Suran Goonatilake, Ph.D., Co-Founder, April19 Discovery, Inc.
Olivia Mannix, Founder, Chief Strategy Officer, Aphrodite Health
Panel Discussion Summary: The Renaissance of Psychedelics in CNS Medicine
Panel Discussion Summary:
Varun Renjen:
Interest and investment in central nervous system (CNS) research has seen quite an increase recently. A lot of com- panies, such as Pfizer, Lilly, and AstraZeneca had moved away from CNS. However, over the last 5 years, we’ve seen a resurgence in the space, with truly targeted thera- pies; RNA therapies, gene therapies, and so on. We’ve also seen the approval of Biogen’s aducanumab, which was quite a watershed moment.
Along with this general resurgence in CNS, we’ve seen an increased focus on psychedelics. Even with the taboos associated with these substances, our knowledge has been increasing regarding their use in treating a range of CNS diseases. There are approved psychedelics and we’ve seen some very robust data, particularly in mood disorders.
However, there is a lot of potential remaining beyond what is currently known, and that’s what we want to talk about today. So, let’s get started.
Henri, what are some of the risks involved in investing in psychedelics and what key things should investors be look- ing for moving forward?
Henri Sant Cassia:
The most prevalent risk is the sheer complexity of the projects and the market. We’re talking about fixing the brain, which is still very poorly understood. The mecha- nisms of action and the effects of these drugs can all be very complex.
Many people think that it’s a start-up market but it’s actu- ally quite mature with several hundred participants already in it. So, the risk is that, as an investor, you’re unaware of the company you’re investing in and its interaction with the broader market. Investors can dip into a market that actual- ly needs a full-time focus and a considerable infrastructure to truly understand all of the different elements involved.
Varun:
To that point, we’ve seen esketamine from Janssen approved, there’s robust phase III data from MAPS (Multi- disciplinary Association for Psychedelic Studies) in MDMA, and we’re awaiting psilocybin data from Compass in a couple of months. There are big players and emerging play- ers in the space. What’s preventing this from going more mainstream? Is it just the need for more data or are there other factors?
Henri:
It’s still relatively early, but development is moving along at an accelerated pace. You’ve got to allow companies to get through clinical trials…you’ve got to allow jurisdictions to open up in terms of new clinics and in using base com- pounds rather than medicines. You’ve got to allow for more investment.
So, the sector is moving forward very quickly toward the mainstream. If you look at the size of the population of pa- tients that can be helped, it’s very large. You can’t go from zero to hundreds of millions of patients globally overnight.
It’s going to take time. We’re at the beginning of the begin- ning.
As we start to get more drugs on the market, more pa- tients talking, it becomes more normal and not an unusual thing. At that point, it will become a mainstream regular treatment. I think that’s perhaps 7-10 years from now. It could come sooner if additional things happen to accelerate it, such as celebrity usage, public health usage (because it’s lower cost), and so on.
Varun:
Continuing with this idea of a revolution in CNS, it has become the second largest book of business for venture capitalists behind oncology. Forward looking, this is the time to look at investing in the space as regulatory hurdles are dropping and the pace of clinical development is picking up. Certainly, a big part of development is determining which molecules to test. Suran, from a drug discovery perspective, what are the costs and timings that should be critical to watch from an investor perspective as companies test new derivatives of psychedelics, and how can this process be expedited moving forward?
Suran Goonatilake, Ph.D.:
I agree with Henri that we’re very much in the beginning of this sector. To your question of why we haven’t seen more traction in this space, it’s just time. We simply need the time for these compounds to move through their phase 3 trials and, if all goes well, that will happen over the next couple of years.
As far as the “main game” is concerned for these pub- licly traded companies (and there are only three or four with valuations of $1 billion or more, a relatively small valu- ation by pharma industry standards), they are looking to do at least one of the following things:
1. Take well-known, open-source compounds and through clinical trials, collect data that gives them data
privileges or monopolies for some period of time, or 2. Take existing, open-source compounds and explore
the chemical spaces surrounding them trying to create derivations using medicinal chemistry. The idea, of course, is to patent the new derivatives and use that patent protection for as many years they can.
The backdrop to this is the whole artificial intelligence (AI) revolution, which is touching pretty much every indus- try, and drug discovery is no exception. Typically, it would take $1-2 billion and about 10 years to develop a new drug.
Now, with AI, we can go from an idea on a blackboard to an initial compound in something like 45-50 days. So you can dramatically speed up the discovery process. That “speed up” leads to equivalent reduction in the money you invest.
We think this will have a dramatic impact on drug discovery in psychedelics.
Over the next few months, we’ll see a few big AI-driven drug discovery companies go public. They’re working in areas like cardiology and oncology and so forth, but we’re working to apply that type of technology to psychedelics.
We’re having success with a client in that area.
Varun:
That’s very exciting to hear. When we think about AI and its use in psychedelic drug discovery, we think of mood disorders, such as major depressive disorder, PTSD, etc.
What is the potential of AI to aid in psychedelic drug discov- ery outside of mood disorders?
Suran:
Let’s take a step back to answer that question. If you take civilizational knowledge, which can encompass thou- sands of years of learning, you’ll see that some plants or mushrooms are known to elicit certain responses or have certain effects. That knowledge was gained over time as different people, for example, ate different mushrooms.
Some died, some didn’t, while others had some positive effect, with the mushroom showing fitness for a certain purpose. Those uses survived and were passed down as civilizational knowledge.
Over the past 50 years or so, scientists using medicinal chemistry have taken that knowledge and expanded it even more. For example, they’ve modified compounds and searched the space surrounding them for additional pos- sibilities.
In AI-driven drug discovery, we are taking the knowledge we have and adopting a multi-dimensional view to study
different compounds’ potential impacts. If we see a certain chemical structure that elicits a given response— it’s not toxic, it’s bioavailable, it interacts with a specific receptor, etc.—then we can model its effect by adjusting any of hun- dreds of potential factors. It’s almost like having a hundred thousand medicinal chemists working for us at the same time.
So, whether it’s for mood disorders, pain management, addiction cessation, or something else, we think we have the ability to traverse the chemical space in a really effi- cient and profound way. This technology is not just useful for screening existing compounds or searching for useful derivations. It can also be useful for identifying radically new compounds through what’s called generative-AI.
We think this whole range of tools will have a profound impact on discovery. Now, of course it’s all computational, and it’s not the same thing as doing it in the real world.
But, AI’s ability to speed the process and broaden our search is immense. So, to answer your original ques- tion, for us it’s not so much about a specific focus on pain management or mood disorders or some other area. It’s about being able to rapidly explore a space and see how an all-new compound is likely to affect a certain receptor and provide a tangible benefit. You can dramatically reduce the amount of time and money you spend in a lab while really increasing the chance of success.
Varun:
One of the disease areas that you mentioned was pain management. That has taken quite a large role in our soci- ety, given the opioid addiction epidemic and the overdoses that happen. There is a movement to minimize the use of opioids and there’s a real need for new non-opioid treat- ment options. Olivia, what potential do you see for psyche- delics to treat pain?
Olivia Mannix:
Literature suggests that chronic pain is related to neu- roplasticity in the brain. If you step on a nail, you will feel acute pain with that injury. Chronic pain lasts long after an injury and seems to be related to neuroplasticity. Some psychedelics seem to be able to affect this, in essence
“re-wiring” the brain via neurogenesis to help alleviate the chronic pain or prevent pain from becoming chronic in the first place.
Right now, chronic pain is treated mainly using opioids and anti-depressants. We don’t view that as an ideal treat- ment method. Last year alone, there were 250 million
Panel Discussion Summary: The Renaissance of Psychedelics in CNS Medicine
prescriptions for opioids in the US. So, we’re excited to see how psychedelics (which are much less addictive) could help address the opioid crisis.
Varun:
Yes, it’s definitely an exciting area. It’s also interesting that psychedelics not only show promise in treating chronic pain, but also in helping to treat the opioid addiction itself.
Olivia:
Exactly. Who would have known that psychedelics could show so much promise in so many areas? It’s definitely the time to get involved in the space from an investment standpoint.
Varun:
Transitioning from pain, which is a huge area of focus in the US, let’s take a look at dementia. Dementia, and neuro- degenerative diseases like Alzheimer’s, are generating a lot of interest. Investment interest has increased dramatically, especially after the approval of aducanumab within the past few months. However, there is still a lot of uncertainty and controversy regarding the underlying pathophysiology of Alzheimer’s disease, etc. Given that, Jim, how can psyche- delics be positioned in dementia versus other treatments on the market?
James Kuo, M.D., M.B.A.:
Varun, let me start by thanking you for giving me the op- portunity to speak at this conference. Alzheimer’s is often regarded as a kind of graveyard for a lot of drugs. There haven’t been a lot of really successful drugs, though there have been a lot of attempts.
You referenced the Biogen approval, which I think is a type of sea change or tipping point with approvals, even though that drug does not appear to be efficacious. The main ques- tion is, will psychedelics prove to be different or not?
It’s not clear what the exact causes of Alzheimer’s are.
There are a lot of unknowns. However, the FDA really doesn’t care if you know how your drug works or what the underlying cause of the disease is. They care whether the drug works or not.
At Return Health, we’ve chosen to break the Alzheimer’s problem into two parts:
1. The behavioral and psychological symptoms of demen- tia (BPSD) and
2. The cognitive decline that most people think about when they think of Alzheimer’s
The BPSD component is still very important, and that’s
where we focus our attention. Those symptoms include agitation, depression, anxiety, and so on. They’re really not that different from disorders in which psychedelics have already proven to be effective. They’ve been shown to help patients with depression and PTSD. They’ve also been shown to help cancer patients who also suffer from anxi- ety, depression, and so forth. We view the symptomology across all those patient types to be very similar. So, we’re taking an umbrella approach and that’s why we think we’ll be successful.
Varun:
When referencing dementia, most people think of Al- zheimer’s first vs. vascular dementia or lewy body demen- tia. It raises the question whether psychedelics could be used to treat these symptoms across the full spectrum of dementia-inducing diseases without regard to which is the cause?
James:
Exactly, that’s the point. Dementia is an umbrella term for a set of symptoms. Alzheimer’s disease is the larg- est cause but there’s also frontotemporal dementia, lewy body (as you mentioned), and more. Our strategy is to address the full spectrum, as it’s a much larger market. It’s
“Alzheimer’s-plus.”
We think psychedelics can help in three ways. They can 1. Encourage neuroplasticity, which can have positive
impacts.
2. Help drive neurogenesis, which is poorly understood but can also bring positive effects.
3. Reduce neuroinflammation. This is also a poorly un- derstood area, but when brain cells are dying, they are known to exhibit inflammation. Psychedelics can help reduce that.
So, we’re targeting all three areas and we’re not being specific to Alzheimer’s.
Varun:
With that, I want to thank all of our panelists. Certainly, there has been rising interest in psychedelics. Everyone has started to understand their potential across mood disorders (using psilocybin and ketamine, for example).
However, there seems to be a much greater potential to use a greater variety of psychedelic compounds across a broad range of CNS diseases. It should be very interesting to see how much progress we can make over the next 7 – 10 years.
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