Following several transformative milestones in psychedelics, coupled with a surge in biotech investment, 2024 is set to see a profound shift for the sector as investors turn their attention toward solutions in mental health.

With a remarkable 48% surge in biotech investment in the UK recorded between June and August 2023, according to data from the UK BioIndustry Association (BIA) and Clarivate, the financial landscape is ripe for innovative ventures.

This increase in investment followed the introduction of a new pension reform package which includes the Mansion House Compact. This allows pension providers to allocate 5% of default pension allocations to unlisted equity, which could equate to a massive £50bn in investment for UK companies.

Specific sectors highlighted for allocation include fintech, life sciences, biotech, and clean technology in order to create growth and support jobs across the UK.

This development presents a unique opportunity for the UK’s psychedelics industry to thrive.

Psychedelic developments

Parallel to this influx of biotech investment, the psychedelics industry has recently seen several watershed moments that are setting the stage for the sector’s acceleration.

In January 2024, UK-based Beckley Psytech secured $50M investment from atai Life Sciences to expedite the development of Beckley’s psychedelic assets through Phase 2 trials.

Multiple clinical readouts are expected from Beckley this year, including from its Phase 2a trial for Alcohol Use Disorder in mid-2024 and a Phase 2b readout of BPL-003, Beckley’s intranasal 5-MeO-DMT, for Treatment Resistant Depression in the second half of 2024.

Additionally, Canadian-based Filament Health announced that the FDA has accepted its Investigational New Drug application for PEX010, a botanical psilocybin drug candidate aimed at treating Substance Use Disorders (SUD).

February saw the FDA accept Lykos Therapeutics’ (formerly MAPS PBC) NDA for MDMA-assisted therapy for PTSD. The application has been granted Priority Review and the FDA is expected to announce its decision in August 2024. If approved, this will be a major development for psychedelic therapies following two decades of research by MAPS.

Elsewhere across the globe, 2024 has already seen the European Medicines Agency confirm it will be holding a meeting on psychedelics in April to help shape regulatory guidance, and the UK’s independent body, POST, confirm it intends to publish a major briefing on psychedelic drugs to treat mental health conditions later this year.

The decision to publish the briefing followed the country’s first parliamentary debate on access to psychedelics in 2023.

Furthermore, Australia’s MindBio Therapeutics announced results from its pioneering Phase 2a take-home microdosing trial of its proprietary titratable form of LSD, MB22001.

The study showcased rapid and statistically significant improvements in depressive symptoms, with a 60% reduction observed and 53% of patients achieving complete remission from depression. The compound was shown to be safe and well-tolerated, with no treatment-related severe or serious adverse events reported.

These results mark a significant milestone in understanding the potential for scaling up psychedelic therapies, and the company is working on building a proprietary treatment model that is scalable, safe and effective, and can be tailored to patients as a first-line treatment for depression.

Speaking to Psychedelic Health, Co-Founder & Chief Executive Director of MindBio Therapeutics, Justin Hanka, stated: “Microdosing is a scalable way to treat millions of people suffering from these conditions with psychedelic medicines and this data just confirms it is safe and effective and justifies the progress of this research in advanced stage clinical trials.”

Most recently, Cybin announced it had received FDA Breakthrough Therapy Designation for its novel psychedelic molecule CYB003. This will provide an expedited review pathway and increased access to FDA guidance on trial design, as well as the potential to reduce drug development timelines.

Cybin CEO, Doug Drysdale, stated: “The granting of Breakthrough Therapy Designation by the FDA underscores the potential of CYB003 to fill a gap in the treatment landscape for MDD and serves to expedite and de-risk our development programme going forward.

“This designation provides for a streamlined review process and enhanced engagement with the FDA. With the robust durability data from our Phase 2 study in hand, we are ready to move forward expeditiously. We are grateful for the opportunity to accelerate the development and regulatory review process that this designation affords, as we prepare to advance CYB003 toward a Phase 3 pivotal trial around mid-year.”

The company also announced its oversubscribed private placement of US$150m in March, led by Deep Track Capital and includes participation from RA Capital Management, Avidity Partners, Acorn Bioventures, Altium Capital, Logos Capital, Octagon Capital, Rosalind Advisors, Sphera Healthcare and other institutional investors. The net proceeds will be used for Phase 3 drug development activities for CYB003, working capital and general corporate purposes.

Adding to these developments, the FDA recently gave Breakthrough Therapy Designation to Australia-based MindMed’s MM120 (LSD) programme for the treatment of generalised anxiety disorder (GAD), another bolster for psychedelic therapies.

Robert Barrow, Chief Executive Officer and Director of MindMed, stated: “The FDA’s decision to designate MM120 as a breakthrough therapy for GAD and the durability data from our Phase 2b study provides further validation of the important potential role this treatment can play in addressing the huge unmet need among individuals living with GAD.”

Supporting investment

Israel-based Negev Capital, a biotech venture capital firm in the psychedelics-based medical R&D space, saw its successful first fund of $31 million invested across 27 companies including Beckley Psytech, MindBio and Filament Health.

Ken Belotsky, Partner at Negev Capital, commented: “We remain dedicated to supporting and investing in the future of psychedelic medicine and see 2024 as a watershed year for the sector.

“These recent achievements of just some of our portfolio companies underscore the immense potential of psychedelics-based compounds to revolutionise treatment of a wide range of mental health conditions, substance use disorders and other illnesses.’’

These major developments underscore a growing confidence in the potential of psychedelics to revolutionise healthcare and wellness, and investors are set to capitalise on their therapeutic potential bringing in a wave of investment.

The rest of 2024 is set to see regulatory approvals in the US and the advancement of clinical milestones which could see major shifts in valuations for companies in the sector.

The European Medicines Agency (EMA) is set to hold a multi-stakeholder workshop on medical psychedelics in April 2024 to establish regulatory guidelines for the development and therapeutic use of psychedelic substances in Europe.

In what marks an important next step for psychedelics in Europe, the workshop – Towards an EU regulatory framework – will bring together patients, healthcare professionals, academia, regulators and industry.

The meeting is being held in response to a letter from a group of cross-party MEPs calling for the EU to act fast on psychedelics.

The MEPs wrote to the European Medicines Agency (EMA) and the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) to say the organisations need to play a more active role in the advancement of psychedelic medicines in Europe.

The letter states the EMA recognises that mental health conditions and substance use disorders are one of the highest public health challenges in Europe, and that the organisation is closely following the developments in the field of psychedelic-assisted therapies.

Signatories of the letter included MEPs Alex Agius Saliba, Robert Biedroń and Sara Cerdas of S&D, Jarosław Duda of the EPP, Tilly Metz of the Greens and European Free Alliance, and Frédérique Ries of Renew Europe.

The EMA previously responded to the MEP’s letters confirming the organisation will cooperate with the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) on psychedelic substances.

The workshop will discuss the development and therapeutic use of psychedelic substances to address unmet medical needs in the area of mental health across Europe.

The EMA has stated that the workshop will cover research methodology, regulatory processes and requirements and the relevance of real-world data, and aims to:

• Hear the views of stakeholders and experts on the therapeutic potential of psychedelics;
• Provide further clarity on defining the safe and effective use of psychedelics;
• Inform on regulatory challenges associated with the development and evaluation of psychedelic medicines;
• Define areas for which further regulatory guidance is required.

The meeting will be held from 16 to 17 April.

Beckley Psytech has confirmed it has received a strategic investment of USD$50 million from atai Life Sciences to accelerate the development of Beckley Psytech’s two clinical-stage, patent-protected, short-duration psychedelic candidates.

The candidates, BPL-003 and ELE-101, will be advanced by their inclusion in atai’s mental health innovation platform. BPL-003 is a novel, short-duration, intranasal formulation of 5-methoxy-N,N-dimethyltryptamine (5-MeO-DMT also known as Mebufotenin), and ELE-101 is a novel intravenous formulation of psilocin, the primary moiety of psilocybin. 

atai Founder and Chairman, Christian Angermayer stated: “This transaction underscores our conviction in the potential of psychedelics as groundbreaking treatments for people living with mental health disorders. Short-duration psychedelics have the potential to offer similar clinical benefit to longer-acting psychedelics, in a more efficient and scalable way, which could lead to increased patient access. 

“By including BPL-003 and ELE-101 in the atai platform, we are building the largest portfolio of psychedelic compounds with prior clinical evidence.”

Beckley Psytech’s CEO, Cosmo Feilding Mellen added: “Beckley Psytech and atai Life Sciences share a vision for the future of mental health treatment, and we are excited to join forces on the journey to develop effective, accessible, rapid-acting psychedelic medicines for people in need. 

“Alongside the financial investment, we are optimistic about the numerous possible synergies of this collaboration, especially in developing digital tools to optimize patient support and planning for future commercialization. 

“We look forward to exploring these in the coming months.” 

BPL-003 is currently in development for Treatment Resistant Depression (TRD) and Alcohol Use Disorder (AUD), with three clinical trials underway. 

The first trial is a global, multi-site, double-blind, randomized Phase IIb study in people living with TRD, evaluating the effects of a medium and high dose of BPL-003 against an active placebo comparator in 225 patients with moderate-to-severe TRD. 

Medium and high dosages were found to reliably induce profound psychedelic experiences in a completed Phase I trial, with a rapid onset of psychedelic effects within minutes and the resolution of all perceptual effects within 60-90 minutes. 

In addition to the Phase IIb study in TRD that is anticipated to read out in the second half of 2024, BPL-003 is also being investigated in two small Phase IIa open-label studies in TRD and AUD, with data expected in the first half of 2024 and mid-2024 respectively. 

Beckley Psytech’s second candidate ELE-101 is being developed for the treatment of Major Depressive Disorder (MDD). This compound has the potential to offer the therapeutic benefits of psilocybin, which has demonstrated significant antidepressant effects in multiple clinical studies, in a more consistent, controllable, and shorter treatment paradigm of less than two hours. Initial results from the current ELE-01 Phase I/IIa study are anticipated in the first half of 2024. 

atai Co-founder and Chief Executive Officer Florian Brand added: “When it comes to mental health, there is no one-size-fits-all solution, and the diverse pharmacology of our drug candidates acknowledges the heterogeneity of neuropsychiatric patient populations. Looking ahead to the next 12 months, adding to our already strong pipeline of potential catalysts, we anticipate this investment will lead to several additional meaningful clinical readouts, including topline results from the BPL-003 Phase 2b study, expected in the second half of 2024.”