December 18th, 2020
App, Exclusive, Psychedelics, Top Story
There has been significant interest in the psychedelic space and of the promise psychedelic molecules show in treating mental health conditions. Mental illness is a ubiquitous human experience and an insufficiently addressed medical necessity. Psychedelics offer an alternative to ineffective treatments by acting via a different mechanism of action. However, psychedelic pharmaceuticals need improvement to provide novel drugs that are engineered to have fewer side effects, better efficacy, and out of clinic applicability. The team at MagicMed Industries Inc. intends to provide a solution.
The value add that MagicMed provides is building a library of psychedelic derivatives, called the PsybraryTM, to support and enable the development of new mental health drugs and ultimately create a much-needed solution for an underserved market. Libraries are not a new concept in the pharmaceutical industry. However, the PsybraryTM is an innovative and unique resource in the psychedelic pharmaceutical field.
This niche business model has created a buzz in the industry and has recently led MagicMed Industries Inc. to successfully complete an upsized and oversubscribed $8.1 million private placement that included investors like the Conscious Fund. With the ongoing development of its Psybrary™ and stellar management team, the company is well-positioned to capitalize on the industry’s move to create the next blockbuster mental health treatment.
Successful Capital Raise
Following an initial $2.5 million offering, MagicMed Industries saw significant investor interest and upsized the offering to more than $8 million.
The Conscious Fund, a leading early-stage venture fund investing in psychedelics, made a significant contribution to the funding round. Founding Partner Henri Sant-Cassia said, “We are very proud to be joining President and CEO Dr. Joseph Tucker, alongside his team, on this important journey, as MagicMed is one of the few next-generation innovators in the space.”
MagicMed plans to use a sizable portion of the funds received from the financing to expedite the expansion of the PsybraryTM by synthesizing and filing intellectual property on additional psychedelic derivatives based on the chemical structures of molecules like MDMA, LSD, ketamine, and ibogaine. The company expects the PsybraryTM to be a leading resource used by pharmaceutical and biotechnology partners to develop next-generation mental health treatments. The funds will also be used as general working capital and corporate expenses. President and CEO Dr. Joseph Tucker added, “We are pleased to have completed this offering and will be able to focus these additional resources on accelerating our growth strategy.”
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Massive Psybrary™ Potential
Leading research institutions across the world including Imperial College London, University of California, Berkley, and Johns Hopkins have established psychedelic research centres. Moreover, these leading institutions are validating what many see as the substances’ astonishing therapeutic potential for a vast range of mental health indications, from depression to addiction and acceptance of mortality. However, psychedelic pharmaceuticals need improvement to provide novel drugs that are engineered to have fewer side effects, better efficacy, and out of clinic applicability. The team at MagicMed intends to do just that. By creating the PsybraryTM, a vast library of novel drug candidates that are tailored for specific effects, MagicMed will undoubtedly provide partners with the potential to create numerous drug candidates for a market that is ultimately underserved.
MagicMed Industries’ Psybrary™ is a library of drug candidates (and the intellectual property that protects them) based on the core structures of known psychedelic molecules. The MagicMed team uses the structure of existing psychedelic molecules as a starting point from which to develop novel derivatives. By making a vast library of new molecules with altered structures, MagicMed can screen these creations to find new drug candidates with the desired characteristics that their partners need. MagicMed enables their partners to expedite products to market and allow partners to search, test and further tailor desired pharmaceuticals from derivatives contained in the PsybraryTM. While most psychedelic companies are focused on the development of known generic psychedelics, MagicMed is employing a combination of synthetic biology and chemistry to build an entire library of novel drug candidates.
The PsybraryTM takes the development philosophy of a pharmaceutical company and it also adds novel synthesis and manufacturing technology to create additional drug diversity. Each derivative molecule that MagicMed creates is a potential patented drug development candidate. This approach allows the company to contribute to the development of several pharmaceutical candidates for the treatment of numerous indications and creates an iterative program that can improve candidate drugs, all of which are IP protected.
Figure 1. Drug discovery and development timeline. The current drug approval pipeline can take ~ 15 years. It is estimated that from 5,000 – 10,000 compounds only one new drug reaches the market. (Adapted from http://cmidd.northwestern.edu/files/2015/10/Drug_RD_Brochure-12e7vs6.pdf ; http://www.phrma.org/sites/default/files/pdf/rd_brochure_022307.pdf ).
In October, the company signed a research agreement with the University of Calgary to accelerate the development of its Psybrary™. The company also filed initial patents covering derivatized molecules based on psilocybin, which could be the first parts of its Psybrary™ to be licensed out to third parties for clinical development and commercialization.
Low Risk Model
MagicMed’s strong foundation of psychedelic derivatives, contained in the PsybraryTM, will allow multiple partners to simultaneously advance their desired derivative molecules through preclinical and clinical testing. This will provide the company with multiple revenue streams from the onset. Furthermore, beyond licensing fees and milestone payments made during the development process, royalties on approved drugs will create long-term blue-sky potential. Their revenue model significantly de-risks the company and provides revenue streams from multiple partners. MagicMed’s diversified revenue stream has caught the attention of many high-profile investors in the psychedelics space, including The Conscious Fund, by providing a low-risk investment opportunity and high return potential.
MagicMed’s successful capital raise and diversified revenue model, as well as its stellar management team, has created an investment frenzy during their private placement. Undoubtedly, notable industry news such as the recent decriminalization of psychedelics in a number of U.S. states, funding of psychedelic research by the U.S. Defense Advanced Research Agency, as well as Canada providing exemptions allowing more than a handful of researchers to possess and use psilocybin for professional training, has created an appetite for innovators, such as MagicMed, in this sector. A frenzy of interest has captivated a new generation of researchers and investors. Regardless of the overall climate in the industry, the company is well-capitalized to execute on its plan to grow the Psybrary™, attract development partners and generate significant long-term shareholder value while maintaining a low risk investment model.
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