If you want to know just how quickly public sentiment around psychedelics is changing, consider this: Gwyneth Paltrow sent her staffers to psilocybin-assisted therapy in the first episode of the Netflix docu-series the Goop Lab. Meanwhile, billionaires attending the World Economic Forum in Davos heard a pitch from a company developing a hallucinogenic drug to treat opioid addiction.
With Oregon activists pushing for state-wide decriminalization of magic mushrooms for therapeutic use this year, one local startup wants to keep the momentum going. Silo Wellness, based in Springfield, Oregon, has developed a nasal spray for microdosing psilocybin meant to aid with anxiety, PTSD and depression. The company now hopes to spread the good word, offering seminars for volunteers who normally wouldn’t try it on the black market to test the device in a controlled setting in Jamaica, where magic mushrooms are legal.
“My hypothesis being that this has the best chance of catalyzing legalization in the United States, when people go back and tell their peers and friends on Facebook that they tried mushrooms,” Mike Arnold, a former trial attorney and the founder of Silo Wellness, said in January before the COVID-19 outbreak.
Arnold says his goal is to “get psychedelics in the hands of as many people as quickly and inexpensively as possible.”
Almost 50 years after President Richard Nixon launched an anti-drug crusade, a growing number of researchers, companies and institutions are betting that the long-shunned hallucinogens could be poised for growth amid rising scientific evidence for their efficacy in treating some of the toughest mental health and addiction challenges.
Over 260 million people of all ages suffer from depression, which is a leading cause of disability worldwide, according to the World Health Organization. With the rise of awareness around mental health and mental illness, more startups are targeting the underserved market than ever before, says Stephen Hays, the founder of What If Ventures, which invests in early-stage mental health and addiction recovery focused companies.
More than 700 startups are building solutions for mental health and emotional well-being, with just over $4.5 billion invested, according to Hays’ estimates. About a dozen are focused on psychedelics, laying the groundwork in the anticipation of their removal from Schedule 1 category, which may happen in the next two years.
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“Because the regulation is being crafted from scratch and the laws have to be changed, there are going to be a lot of people who start businesses and then get blindsided by the bureaucracy of the system,” said Hays. “It’s a really hard place to invest early without getting a little bit lucky.”
Earlier this month, the U.K.-based Compass Pathways, which is conducting the world’s first large-scale psilocybin therapy clinical trial, raised $80 million in a Series B round from investors, including ATAI Life Sciences, Founders Fund and Able Partners. The company, which holds a US patent relating to methods of treating drug-resistant depression “with a psilocybin formulation,” is also backed by Silicon Valley billionaire Peter Thiel, who has invested in other companies focused on psychedelics.
Meanwhile, Johns Hopkins University and Imperial College London last year opened new research centers, with more than $20 million in commitments from wealthy private donors, to study compounds like LSD and psilocybin for mental health disorders, depression and addiction.
Psilocybin is officially listed as an “eligible investigation drug” for terminally ill patients under the Right to Try Act passed by President Trump in 2018. According to one study, most cancer patients experienced “significant decreases in depressed mood and anxiety” after a session, while two-thirds said it was among the most meaningful experiences of their lives.
“For the first time in decades, psychiatry has a real shot at having approved treatments that not only alleviate the symptoms, but empower patients, and we simply cannot afford to miss that chance,” Ekaterina Malievskaia, chief innovation officer and co-founder of Compass Pathways wrote on LinkedIn in December.
Oregon could become one of the first states to decriminalize the psychedelic mushrooms this year, with activists collecting signatures for several 2020 ballot initiatives, including for therapeutic uses. California and Vermont may follow suit.
Silo Wellness’s Arnold says he got involved in the industry for real purpose. After building a lucrative career as an “intimidating cross-examiner, a rugby-playing lawyer” with poor anger management skills, Arnold felt a profound transformation thanks to a guided meditation with a handful of magic mushrooms. That experience sent him on a quest to make the healing opportunities of fungi available to a much wider audience.
Thus was born the “spore to door” psychedelic therapy company, which formulated its product in Jamaica with a team led by pharmacologist Parag Bhatt and Marine combat veteran Scott Slay. Arnold also partnered with Michael Hartman, a former senior scientist at the pharmaceutical giant Novartis and the inventor of a cannabis and hemp inhaler.
The spray allows users to get the effects of a metered sub-psychedelic dose without the complications of an upset stomach. When inhaled, psilocybin goes directly to the bloodstream through the nasal membranes and eventually the liver for metabolizing. The company has no plans for commercial release yet.
Unlike with cannabis, where patients knew about the benefits of marijuana long before the capital market, this time high net worth individuals and institutional investors got on board early, which may create a threat for the industry, making it follow a big-pharma, prescription-only model, says Arnold.
“This is not the type of medicine you should have to go to a pharmacy and pay a lot of money for,” he said.
Listen to GeekWire’s Health Tech Podcast above or subscribe in any podcast app to hear a discussion with Mike Arnold, founder of Silo Wellness; entrepreneur and consultant Eric Boone of Cannabinovation.com; Dr. Sunil Aggarwal, an affiliate clinical assistant professor at the University of Washington School of Medicine; and journalist Anastasia Ustinova.
