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Psychedelics Biotech Co. Leaps Forward with Big Pharma Investment

Jocelyn Aspa Jocelyn Aspa, The Market Herald
1 Comment| January 11, 2022

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Could 2022 be the year that psychedelic stocks break out?

It might be too early to tell because public psychedelic companies are few and far between, but the industry is poised to reach considerable growth between now and 2027. Valued at approximately US$3.8 billion in 2020, the psychedelics drug market is expected to reach $10.76 billion by 2027.

In a nutshell, the industry is poised to take off, and biotech and pharmaceutical companies are jumping in on the action to take advantage of this growing market.

Meet Mindset Pharma Inc. (CSE:MSET, OTCQB:MSSTF, Forum), which is a Toronto, Ontario-based psychedelics biotechnology company that is focused on developing novel and patentable psychedelic compounds to treat neurological and psychiatric disorders.

At present, Mindset Pharma is advancing its portfolio of psychedelic medicines that is comprised of four patent-pending new drug families drawing on novel chemical structures and includes its lead compound MSP-1014. Mindset Pharma’s MSP-1014 has demonstrated superior preclinical characteristics in direct comparison with psilocybin.

Thanks to the company’s efforts in developing its line of novel treatments, Mindset Pharma recently announced a collaboration with The McQuade Center for Strategic Research and Development (MSRD), a member of the global Otsuka family of pharmaceutical companies, that will support the development of psychedelic medicines.

Mindset Pharma and MSRD collaborate

In a press release, Mindset Pharma said that MSRD will collaborate with the company to support Mindset Pharma’s discovery and development of novel chemical entity assets under its belt.

The company said that MSRD will fund all development expenses for its family 2 and 4 drugs through the completion of Phase 1b clinical trials. Additionally, MSRD has made an upfront cash payment of US$5 million and will lend their significant drug development expertise to provide operational support to Mindset.

All of the funding under the agreement is non-dilutive to Mindset in exchange for Mindset Pharma granting a right of first refusal to MSRD as it relates to asset sales, exclusive licensing or collaboration opportunities regarding the drugs as well as a right of first negotiation in terms of merger, acquisition or asset sales related to Mindset Pharma. MSRD will also have the potential to receive single-digit percentage royalty payments when the right of first refusal is not used or the agreement is terminated.

MSRD is an outfit that helps identify and support early-stage opportunities that are changing the landscape of mental illness and renal disorders. In line with this, MSRD financially and operationally supports the development of Mindset’s novel medical psychedelic compounds through Phase 1a and Phase 1b clinical trials.

“Exploring multiple paths is essential as we work to address the unique needs of individuals living with mental health conditions,” said Robert McQuade, Ph.D., president, McQuade Center for Strategic Research and Development, LLC, and chief strategic officer, Otsuka Pharmaceutical Development & Commercialization, Inc. “We look forward to collaborating with Mindset on these assets and are hopeful that medical psychedelics could be approved to treat mental illness in the future.”

“It is our great pleasure to collaborate with MSRD, a member company of Otsuka, to further the development of two of our families of novel psychedelic compounds. We look forward to leveraging their extensive experience in drug development and CNS indications to accelerate and de-risk our development pathway as we prepare to launch clinical trials,” said James Lanthier, CEO of Mindset. “There is a high unmet need for innovative treatments of mental illness. This collaboration further validates our belief that optimized and patentable next-generation psychedelic compounds will be the future of treatments for mental illness.”

Established in 2019 by the Otsuka pharmaceutical business in the United States, the MSRD has a mission of searching, identifying and funding early-stage research and development products that can potentially build the future portfolio of Otsuka products.

Mindset Pharma in the news

On the heels of the company’s announcement, Mindset Pharma also recently released its 2021 highlights and milestones.

“In 2021, we made significant progress in building our portfolio of next-generation psychedelic compounds showing improved preclinical safety and efficacy of 5-MeO-DMT and psilocybin-based therapies,” Lanthier said in the release. “As we enter 2022, we are excited to advance these novel therapies towards the clinic as we progress IND-enabling studies for our lead candidate, MSP-1014, and select additional candidates from our other families of compounds.

Mindset Pharma also announced in December the filing of an international patent for its Family 3 novel psychedelic compounds, which contain certain compounds that have demonstrated half-lives extending beyond those exhibited by comparable classical psychedelic drugs with no significant reduction in binding affinity at the serotonin 5-HT2A receptor.

“Our family 3 compounds are substantially differentiated from the other families that we are pursuing in that we believe they may demonstrate pro-cognitive benefits at doses without hallucinogenic liability. This paired with their longer half-lives makes them interesting drug candidates for treating more fragile population groups such as children or geriatric patients where the psychedelic effect is likely undesirable,” Joseph Araujo, CSO of Mindset, said in the release.

The investment corner

There’s plenty to be excited about when it comes to Mindset Pharma. Having the support from MSRD is a huge step for not only the company but the psychedelics market as a whole as Mindset Pharma marches forward with Phase 1a and 1b clinical trials.

In other words, Mindset Pharma will be a company that investors should watch for in 2022 as the psychedelics industry continues gaining traction and as Mindset Pharma gears up for future milestones throughout the year.

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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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