GBLC is a trading Psychedelic company Heating up Move Over, Pot: Psychedelic Companies Are About to Go Public
2020-02-11 11:00:00.4 GMT
By Kristine Owram
(Bloomberg) -- The first companies developing medical
treatments from psychedelic drugs like LSD, ketamine and the
active ingredient in magic mushrooms are gearing up to list on
Canadian stock exchanges.
Mind Medicine Inc., which is undertaking clinical trials of
psychedelic-based drugs, intends to list on Toronto’s NEO
Exchange by the first week of March, said JR Rahn, the company’s
co-founder and director. A NEO spokesman confirmed the listing,
which is pending final approvals.
The company plans to list via a reverse takeover under the
ticker MMED. It’s not yet generating revenue and is targeting a
valuation of approximately $50 million, Rahn said. Mind Medicine
counts former Canopy Growth Corp. co-chief executive officer
Bruce Linton as a director and Shark Tank star Kevin O’Leary as
an investor.
“Our ambition is to be one of the first publicly listed
neuro-pharmaceutical companies developing psychedelic
medicines,” Rahn said in a phone interview.
Clinical trials
For those who are still getting used to legal marijuana,
the idea of publicly traded companies working with psychedelic
drugs like MDMA and psilocybin, which is derived from magic
mushrooms, may sound a bit out there.
Yet a growing number of companies are conducting clinical
trials of psychedelic treatments for everything from depression
to post-traumatic stress disorder, and some have recently
received the blessing of the U.S. Food and Drug Administration.
This has created a legal way for these companies to conduct
research on otherwise illegal drugs, opening the door to public
listings.
In late 2018, the FDA gave “breakthrough therapy” status to
a psilocybin treatment developed by London-based Compass
Pathways Ltd. for clinical depression, expediting the
development process.
Meanwhile, Toronto-based Mind Medicine is preparing a Phase
2 clinical trial into the use of a psychedelic called ibogaine
to treat opioid addiction, which will be conducted in New York
and governed by the FDA.
Compass Pathways declined to comment on whether it’s
planning a public listing, but the company is “always looking at
options to ensure continued growth and funding,” chief
communications officer Tracy Cheung said in an email.
Read more: Peter Thiel-Backed Psilocybin Startup Edges
Toward FDA Approval
The Canadian Securities Exchange, which has become the go-
to bourse for U.S. cannabis companies that can’t list in their
home country, is also expecting listings from psychedelic drug
companies in 2020.
The FDA has “given clearance for a variety of trials at
this point and it looks like they are going to be expanding that
framework,” said Richard Carleton, CEO of the Canadian
Securities Exchange. “If that is the case then I’m certain we’ll
see our first issuers probably before the middle of the year.”
Institutional capital
There’s growing investor interest in psychedelics, said
Ronan Levy, executive chairman of Field Trip Psychedelics Inc.
Field Trip is building a network of clinics focused on ketamine-
enhanced psychotherapy, with the first one opening in Toronto
next month and others planned for New York City and Los Angeles.
It’s also conducting research into psilocybin at the University
of the West Indies in Jamaica.
Last week, Field Trip closed a Series A financing round
that raised $8.5 million from a variety of investors including
cannabis-focused asset manager Silver Spike Capital and Harris
Fricker, the former CEO of GMP Capital Inc., which helped a
number of marijuana companies go public.
The funding round attracted interest from all over the
world, including “some very large Silicon Valley tech investors
and entrepreneurs,” Levy said.
Field Trip is considering a public listing, although Levy
also sees further opportunities to raise private funding, he
said. Unlike cannabis, which remains federally illegal in the
U.S., the work psychedelic companies are doing is legal. This
creates “greater opportunity to access growth capital from
private investors in the U.S. who may not touch cannabis,” he
said.
It also sets the industry apart from cannabis, which has
seen stock prices collapse amid slower-than-expected sales in
Canada and ongoing federal illegality in the U.S.
“I think that the psychedelics industry could be much
bigger than the cannabis industry because it’s going to attract
institutional capital and already is starting to,” Rahn said.
“It’s also going to be a more concentrated space because the
barriers to entry are much higher.”