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Opportunity Knocks as the Door Opens to Naturally-Derived Psychedelics

Dave Jackson Dave Jackson, Stockhouse
2 Comments| July 14, 2021

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Stockhouse investors know that investment opportunities are opening up in the burgeoning psychedelics space. And while many are called, few are chosen. One company that looks to be the choice of many in the know is Filament Health Corp. (N.FH, Forum) – an exclusively-natural psychedelic drug discovery and extraction company.

The company says its mission is to see safe, approved, natural psychedelics in the hands of everyone who needs them as soon as possible. Filament believes measurable and efficacious medicines will be a catalyst to addressing many of the world's mental health problems and that natural psychedelics provide an optimal option for widespread adoption of these substances.

Stockhouse Media’s Dave Jackson recently caught up with Ben Lightburn, CEO, Director and Co-Founder of Filament Health, to get our investor audience the up-to-date with latest news and information from this intriguing company.


SH: To start off with, can you tell us a little bit about yourself and the history of the company?

BL: Sure.So my background, I've been working in technology commercialization in different startups for most of my career as an investor, as an advisor, as a member of management focusing on areas pertaining to clean tech and ag-tech and technology commercialization in general with a particular focus as it turns out on bringing to market new technologies for extracting high value compounds from natural sources. So this means making things like green tea extract for dietary supplements or cranberry extract for cosmetics products. It was with this experience that some former colleagues of mine and I from a company that we actually sold togetherwe saw the rise of the psychedelics industry and we noticed something that was a little bit strange to us and that was the fact that there didn't seem to be too many companies focused on naturally extracted psychedelic substances. It's important to remember that all of these compounds like psilocybin and LSD were all once natural compounds only, right.

They were found in nature. They were discovered there but over time it's become common to manufacture these compounds through various processes of chemical synthesis. This means that they're essentially being artificially created in a lab. At Filament, we believe that whenyou manufacture psilocybin and other compounds artificially that it leaves something to be desired and that could be leaving something in terms of the consumer's preference for natural substances in all aspects of their life but importantly it means leaving behind some of the other compounds that when you make a natural extract, you extract them out of the raw material. Whereas if you make a product through chemical synthesis, you're not actually making these other compounds. Like if we think about the cannabis market, imagine if cannabis was only synthetic THC and not natural cannabinoids or no other natural full spectrum extracts.

SH: Can you update our investor audience and your Filament Health shareholders on any new company developments, especially in the wake of COVID-19?

BL: Well, the, the biggest development was our listing on the NEO Exchange a couple of weeks ago, that was a major effort and we're very pleased to have enjoyed a successful launch on June 25th. Since then we've actually been hard at work on a number of exciting developments pertaining to our intellectual property portfolio, as well as our clinical trial portfolio.Without getting into too many details I can share that we have had very positive communications with intellectual property offices,and we are hopeful that in a relatively short term we will have our first patent issuance and that will set us up in very good stead to have actually IP protected clinical trial candidates entering into clinical trials at the University of California, San Francisco. These will be the first FDA approved psychedelics clinical trials using naturally extracted psychedelic substances. So we're not only thatas I mentioned, these will also be IP protected substances protected by both patent applications, as well as trade secrets pertaining to the manufacturing methods. So we think that this sets us up in very good stead for the months and years to come.

SH: Ben, as we discussed off-air, there are now a lot of players that have entered the psychedelics space over the past few years, what separates Filament Health from the competition and makes your business model unique?

BL: A couple of things, what makes us unique definitely is the natural angle, right? We are exclusively naturaland we're more than just a psilocybin company. We're more than just a magic mushroom company. As we know, psychedelics are much more than just magic mushrooms. Magic mushrooms are much more than just psilocybin. Our first clinical trial candidate is actually a compound from the magic mushroom that's not psilocybin that we're very excited about that could potentially have therapeutic benefits compared to psilocybin. We'll be testing that clinically for the very first time but it's not just the natural angle that sets us apart. I would say that the depth of our team's experience at commercializing very similar products in other industries, as I mentioned before we have a team operational scientific manufacturing team that previously worked together at a companywhich was dedicated exclusively to making natural extract which we were fortunate enough to sell and now join up together and work together again as well as our facilities and our licensing.

So we're one of the few companies that haswhat's called a Health Canada Dealer’s License. This is what's required to actually manufacture controlled substances such as psilocybin. So we have that as well as we have GMP Certification in house and what that means is that we can within our own four square walls, we can manufacture GMP grade psilocybin products and put them into our own clinical trials, but also, we can potentially supply third party drug developing company. There are very,very few companies in the world that have this dual capability, the capability to work with controlled substances, but also have the GMP Certification necessary to administer to human clinical trials.

SH: What exactly is natural psychedelic extraction, how does it work, and how does it differ from traditional psychedelic compounds?

Click to enlargeBL: Well, that's a great question and it's one we get a lot.Natural extracts, although they're somewhat poorly understood they are very common in our everyday life. If you or your listeners had a cup of tea or a cup of coffee this morning, that is an extract, right? You take some biomass in the case of green tea leaves for instance, you soak them in some kind of a solvent in the case of teait's hot water and the target compounds.Inthe case of green tea, it's the caffeine and the catechins and other flavor compounds. They go into the liquid and then you remove the biomass, leaving the desirable compounds in the solvent. In the case of green tea you can now drink that liquid extract which is what it is,and it has a nice flavor.It has a bioactive effect. We're doing really pretty much the exact same thing with a different set of technologies for psychedelics. We identify which species contain the compounds that we'd like to study in the clinic.

We discover all the different technologies that are required to get the desired compounds out of the biomass and crucially and this is really where the majority of our innovation has taken place is figure out how to standardize those compounds and get them into a pharmaceutical grade preparation. Not a lot of this work had ever been done before for natural psychedelics and I think that's probably due to the fact that we had prohibition and due to the fact that synthetic chemistry really took over psychedelicsfrom an early on early date. So we're here to actually bring these natural psychedelics back to the forefront by developing all the technologies necessary, to turn a raw bioactive raw material, turn it into a pharmaceutical grade extract, and then take it even a step further, getting those pharmaceutical grade extracts into FDA approved clinical team.

SH: Can you tell our investor audience a bit about your IP portfolio? It sounds fascinating.

BL: As I mentioned our IP, it pertains to everything that's required to turn a raw psychedelic biomass like a magic mushroom into a pharmaceutical grade extract. So we're talking about technologies pertaining to extraction, purification, standardization, different compositions of matter, different ways of controlling what comes out of the extraction process. We have 5 different patent families and I think 10 or 15 patent applications now. It's quite a broad IP portfolio and like I saidwe've already received a number of good communications from the intellectual property office, which puts us, I think in quite good stead to start actually getting granted patents fairly soon. As we know, there are quite a limited number of actual granted and issue patents pertaining to psychedelics, and we think that once these patents will be issued that you know the future will be very bright for us.

SH: You’ve recently announced your public listing on the NEO Exchange. This may be news to many investors. Can you unpack the benefits of going to this exchange?

BL: Yeah, we chose the NEO Exchange for a couple of reasons. Primarily the higher governance standards required. It is a tier one senior exchange in Canada, and we thought that was quite attractive because it fit with our own governance philosophies as well as it allows for the possibility to uplist to for instance, the NASDAQ exchange in the United States which you've seen companies like MindMed and other psychedelics companies like Cybin contemplating uplisting into the United States. You could say that the new exchanges as well is a sort of a startup company. So we found them quite entrepreneurial and easy to work with and you knowwe saw the success of other psychedelics companies, such as MindMed and Cybin going public on the NEO to and enjoying good success. So we decided tofollow in their footsteps.

SH: For company shareholders and potential investors, what kind of future development and progress can we expect at your in-house GMP manufacturing and R&D facility at BCIT?

BL: So we recently submitted an amendment to our Health Canada license which will once granted allow us to work with all natural controlled psychedelic substances and we look forward to developing a future drug candidates based on these other controlled substances. Our first two drug candidates are based on psilocybin and another compound from the magic mushroom that's not psilocybin but we're very excited about, you know, having potentially a DMT product, potentially having a 5-HO-DMT product, a 5-MeO-DMT product, you know, like I said, we see ourselves as much more than just a psilocybin magic mushroom company and we're focused on all natural psychedelics but near term as I mentionedwe expect to have some patents issued potentially in the, in the, in the coming months. But really what we're most excited about is the very first natural psychedelic FDA approved clinical trials starting in the hopefully also in the next couple of months down at University of California, San Francisco. So I encourage everyoneto pay close attention for all the exciting developments that will come from our clinical development regulatory team.

SH: Even though you just listed on the NEO, what can you tell our investor audience regarding the current valuation of your stock and why you think it’s a good buy right now?

BL: Well, I think that if an investor were to do a full comparison of all the things that our company has achieved and is setClick to enlarge to achieve in the coming months, if you look at the fact that we will be one of the very few companies with an actual FDA clinical trial underway, as well as one of even fewer companies with IP protection on the clinical trial candidate. I think you would quickly come to the conclusion that there is a very good value to be had by purchasing shares in our companyat the current valuation. You know, we can't say with any certainty what's going to happen in the future, but I would encourage investors new and current alike to do a fulsome comparison of what we have on offer compared to many other psychedelic offerings out in the market today.

SH: What’s the long-term strategy for the company moving into 2021 and beyond, and what retail and institutional investors should be looking out for?

BL: Long-Term I think for the psychedelics marketing in general it really remains to be seen what is going to be the primary distribution model for these substances. We all know of the success; I think you could say in companies like Compass that have progressed psilocybin in particular through the FDA pharmaceutical approval pathway, but you do see I guess alternative delivery models being set up in states like Oregon state and California potentially. What they're doing is they're erecting a state regulated model for the distribution of psilocybin and potentially other psychedelics and this is in response to a fear that if these lifesaving medicines are only distributed through the FDA through a pharmaceutical contextthat there may not be as much access to the substances as could potentially otherwise be had. This is due to the high cost of the pharmaceutical approval process, long timelines, and the high cost of administrationthrough the medical system. So while we may not see a, I guess, open recreational market anytime soon, it is likely that we will see some kind of a non-pharmaceutical distribution model. We believe very strongly that in any sort of non-pharmaceutical distribution model, that natural products will bemuch preferred and that's one of the main reasons why we started Filament is because we believe that consumers prefer natural products and, in any market, where they would have a choice between a natural and a synthetic product, we believe that they would choose natural.

SH: Can you tell our audience a little bit about your corporate management and board teams, along with the experience and innovative ideas they bring to the psychedelic drug discovery space?

BL: As I mentioned the core scientific operational team came with me from a previous company called Mazza Innovation. That was a company that we were fortunate enough to sell a few years back.To that core team we've added quite a bit of experience in financial markets, fundraising and in frontier industries.On the board we're very excited to have been able to put togetherwhat we consider to bequite a blue chip boardfor example Greg Mills. The chair of our board is the former head of global equities for RBC. We also have Chris Wagner, who is a pharmaceutical industry veteran as well as Maureen, O'Connellthe chair of our audit committee,who's a very experienced public company audit committee chair. Sowe believe very strongly that the board and management presentsa great strength at Filament and again when potential investors are considering in which company to invest, I encourage them again very strongly to consider the strength of our board and management as they're making their decision.

SH: And finally, Ben, if there’s anything I’ve overlooked please feel free to elaborate.

BL: I would just say that it's undisputable that consumers desire natural products in all aspects of their lives. Not too many people out there are taking synthetic caffeine pills in the morning. Not too many people out there wish they had more artificial blue food coloring in their diet and because of that we believe very strongly that bringing a natural option to the psychedelics market can help increase adoption, right? If someone's more comfortable taking an actual product, therefore we canincrease adoption, put another way. If naturals aren't part of the equation, adoption will be less and if the substances continue to show the great promise andthe great ability to alleviate some of these very burning crises in society, then it behooves us to put every option forward, and that includes a natural option. So I just want to leave your viewers with that, without the natural option, there's a missing piece of the puzzle, and we're here to help fill that gap.

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


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