The UK has cemented its position as a European hub for psychedelics research following a €68.5M ($80M) Series B round from the startup Beckley Psytech.
The Oxford-based Beckley Psytech — founded in 2019 to develop psychedelic treatments for neurological conditions — had originally set the target of its venture capital financing at €43M ($50M). Earlier this month, however, this target was blown out of the water by high investor demand.
“The Covid-19 pandemic brought mental health to the public’s attention in a profound way,” stated Amy Kruse, Partner at the US investment firm Prime Movers Lab, which took part in Beckley Psytech’s Series B round.
“The excitement around psychedelics in the mental health market is very real because they are transformative medicines that will soon make their way into the lives of millions of people who desperately need them.”
The money will be used to fund the completion of a phase Ib trial testing psilocybin, the main psychoactive ingredient in magic mushrooms, in patients with a rare headache condition called SUNHA. The funds will additionally fuel the phase I and phase II development of 5-MeO-DMT, a compound naturally found in plants and a species of toad, for the treatment of clinical depression.
Along with the US and Canada, the UK is one of the main hubs of the medical psychedelics field. Part of this prominence stems from the leading role of UK institutions in psychedelic research over the decades.
“The media has become increasingly interested and next to follow were regulators and investors,” said Cosmo Feilding Mellen, the CEO of Beckley Psytech. “Psychedelic medicines are no longer a taboo, they are something that mainstream media, business, and healthcare can support.”
Compass Pathways, which is developing psilocybin in phase IIb for the treatment of clinical depression, is one of the trailblazers of the UK psychedelics field. After closing an impressive €74M Series B in April 2020, the firm debuted on the Nasdaq four months later and continues to generate high expectations from stock analysts.
Other European biotechs are also building up their muscle in the psychedelic scene. June this year saw two rapid-fire Nasdaq IPOs from the Berlin-based company Atai Life Sciences and the Irish firm GH Research. And in May, the London company Clarify Pharma listed on the Aquis Stock Exchange Growth Market with the aim of investing in psychedelics developers.
“Accumulating evidence around the efficacy of psychedelics to treat depressive disorders has fuelled investor demand,” said Carol Routledge, Chief Medical and Scientific Officer at the UK-Canadian psychedelics firm Small Pharma.
“Promising signs from clinical trials have helped here, and the pandemic has played a role in evolving investor understanding of how drugs can be developed quickly to respond to a medical need that is yet to be fully addressed.”
The growing excitement over psychedelics biotechs also coincides with the gradual easing of a stigma against psychedelics research that originated when these drugs became widely banned in the 1960s. This is a similar trend to that of medical cannabis, which is recovering from its own decades-long stigma.
Going forward, Feilding Mellen is confident that legal red tape isn’t a serious barrier to getting these drugs to market.
“If we are able to prove in large, regulatory-standard clinical trials that psychedelic medicines are safe and effective, then regulators will grant licenses for these drugs to be prescribed,” he told me.
“This is the same path that other well-known controlled drugs such as Ritalin (amphetamine) and Epidiolex (cannabidiol) have gone through in the past and there is no need for drug policy reform to make this happen.”
As psychedelics players start releasing clinical results in the coming months, more companies and investors across Europe could soon be encouraged to tap into the emerging psychedelics market.
“There are a lot of amazing researchers all over Europe and I’m sure we will see more psychedelic research projects cropping up across the continent,” concluded Feilding Mellen.
This is an updated version of an article published on 22 September 2020. Cover image from Elena Resko.