It’s been a difficult week for atai Life Sciences, with the company’s stock price tacking a tumble as pre-IPO shares became eligible for trading. Despite efforts by insiders, including voluntary extended lock-ups announced by the company on Wednesday itself, ATAI was down nearly 40% on the lock-up expiry day.
COMPASS Pathways looks set to enter a spot of bother, too. VICE’s Shayla Love broke the news that the non-profit group Freedom To Operate has lodged a petition for a post-grant review of the company’s “infamous” synthetic psilocybin patent.
However, COMPASS did have some positive news, announcing results from a small study that appears to show that patients can continue taking SSRIs while they receive COMP360 psilocybin-assisted therapy. If validated in larger studies (perhaps even the company’s forthcoming Phase 3 trials) this could be a significant finding, moving psilocybin-assisted therapy from a monotherapy to a potential adjunct therapy.
There’s plenty more to cover this week, including over 10 weekend reads…
Psychedelic Sector News
Tumbling atai: Stock Price Loses Footing Amid Share Lock-up Expiry
Wednesday 15th December marked 180 days since atai Life Sciences’ NASDAQ IPO. As is customary, pre-IPO investors were ‘locked-up’ for this early period of public trading, meaning they were unable to sell their shares.
In anticipation of the lock-up expiry, atai press released the fact that Founder and Chairman Christian Angermayer’s family office, Apeiron Investment Group, and “other key shareholders” of the company were voluntarily locking-up their shares for a further 12 or 24 months (“subject to limited exceptions”). According to the company, these renewed lock-up agreements represent in excess of 30% of atai’s outstanding common shares.
Angermayer himself shared his thoughts via his LinkedIn newsletter, Christian’s world, in a post titled Putting my money where my mouth is with atai Life Sciences.
Despite these efforts, on the day of the lock-up’s expiration atai stock plunged from around $10.10 at open to $6.82 at close, a 38.8% drop.
It’s also in spite of two news releases in the days preceding the lock-up expiry: on Monday, atai announced that it has been added to the NASDAQ Biotechnology Index (effective December 20th), and on Tuesday it claimed that one of its non-psychedelic drug candidates, RL-007, had seen success in a Phase 2a biomarker trial.
So, what happened here? Did investors create a self-fulfilling prophecy re: a drop in atai’s stock price due to the impending lock-up expiry? It’s common for investors to fear lock-up expiration dates, with the SEC itself warning that they can sometimes “result in a drastic drop in share price due to the huge increase in supply of stock.”
But, it’s not always such a negative indicator: analysis by Wedbush and Cohen found a mixed bag. Looking at 31 biotech IPOs from 2017-2018, the group actually saw a mean and median of around +/- 5% in the 2-weeks surrounding the lock-up expiry date vs. the preceding month. That level of volatility is not unusual for a small cap biotech.
Whatever the reason, investor confidence in the company has clearly faltered, and in a big way. The volume traded on Wednesday was only marginally exceeded by the stock’s first day of trading back in June.
There’s also significant dissonance between stock price and analyst targets, with 12 buy ratings and the average target sitting at $31.50. Even the lowest is $17.00.
COMPASS Pathways’ Synthetic Psilocybin Patent Challenged
COMPASS Pathways’ “infamous” patent on synthetic psilocybin has been challenged by a non-profit group, according to VICE’s Shayla Love.
In her latest piece of journalism covering the psychedelics space Love explains the challenge in detail, which necessarily includes an explanation of crystal polymorphism itself. Such detail couldn’t possibly be summarised here, but if you’re short on time the TL;DR of the piece is:
“the petition argues the case that these same three crystalline forms have been made over and over since psilocybin was first synthesized—and that Compass’ Polymorph A is no different.”
The group challenging the patent is Freedom to Operate, a non-profit group dedicated to “protecting psychedelic science and medical development for public benefit,” of which Carey Turnbull is at the helm. You can download the post-grant review petition here.
Turnbull footed around half of the bill for the research that underpins the challenge, which took months of work and costed close to a million dollars, Love reports. The rest came from donors like Bill Linton, Bronner’s Soaps, The Steve and Alexandra Cohen Foundation and Evolve Foundation, according to Carey Turnbull.
That expense begins to make sense when you read that researchers involved in the challenge had to scour the world for “high-quality synthetic psilocybin stored in safe conditions,” with one such sample being a 1963 bottle of Sandoz psilocybin, obtained via NIDA’s Drug Supply Program. Turnbull told Psilocybin Alpha that the sample most extensively used in the research was obtained via Rolan Griffiths’ lab at Johns Hopkins University, and was made by Heffter Research Institute founder Dave Nichols.
What’s next? COMPASS Pathways has 3 months to respond to the post-grant review that this research has informed. Then, the Patent Trial and Appeal Board (PTAB) decides whether a case should proceed to trial. If it does, a lengthy process ensues.
The company responded to the story by stating that they “remain highly confident in the strength of our patents and our polymorph A is the subject of numerous granted patents from several different Patent Offices, confirming that it is novel and inventive.”
This isn’t the first time the company’s patents have been questioned, however. In July of this year, A patent examiner at the UK IP Office issued an opinion on Compass Pathways’ UK Polymorph A patent (GB2572023), having received a request for opinion from Kohn & Associates acting on behalf of Freedom to Operate. The examiner found a number of claims to be lacking an “inventive step,” a foundational tenet of the patent regime.
However, an earlier petition for post-grant review levied at COMPASS was denied in 2020, with the PTAB concluding that the petitioner failed to show that “it is more likely than not” that claims were unpatentable as obvious.
This will certainly be an interesting development to watch, and one that COMPASS is no doubt gearing up to fight. Just yesterday, COMPASS announced the forthcoming appointment of a new Chief Legal Officer (and, the departure of co-founder Lars Wilde as Chief Business Officer), Matthew Owens. Owens was formerly responsible for legal and IP strategy at Novartis, in his role as Global Head Legal, Digital.
There’s also a publication to look out for: some of the researchers hired by the non-profit have submitted additional findings to an academic crystallography journal, which they hope will be published in due course.
New Data Suggests SSRIs Can Be Taken Alongside Psilocybin Therapy
COMPASS Pathways has announced the results of a single-arm open label study of 19 patients taking SSRI antidepressants alongside its COMP360 psilocybin therapy.
Using a single 25mg dose of COMP360 resulted in comparable treatment outcomes to patients in COMPASS’ Phase 2b trial (read our analysis), in which patients had to taper off their SSRIs.
If the findings of this small open label study ring true, this is an important finding for a number of reasons.
Firstly, it might make COMP360 therapy more attractive or accessible to those who don’t wish to withdraw from their existing SSRI therapy. Regardless of whether patients are seeing benefits from SSRIs, withdrawing brings its own set of challenges.
It also highlights the potential of COMP360 to be used as an adjunctive therapy, alongside SSRI antidepressants, as opposed to simply being a monotherapy.
These findings will likely inform the company’s Phase 3 trial design, for which it is set to meet with the FDA in the new year with an eye to commencing the trial in Q3 2022.
We covered a similar study from MindMed and the Liechti Lab two weeks ago.
Reminder: results released via company press releases are not equivalent to peer-reviewed publications or complete datasets.
And the rest…
- atai Impact establishes Fellowship Fund in Psychedelic Neuroscience with MGH;
- Awakn Life Sciences reports Q3 2021 financials and business highlights; appoints Paul Carter as Independent Member of Board;
- Braxia Scientific commences psilocybin clinical trial;
- COMPASS Pathways selected for addition to NASDAQ Biotechnology Index;
- Cybin awarded notice of allowance from USPTO for CYB004 for treatment of anxiety disorders;
- Entheon Biomedical announces EEG patent application, provides research update;
- Field Trip launch Site Management Organization services;
- HAVN Life exports psilocybin from Jamaica to U.S.;
- Lobe Sciences announces shares will trade on OTCQB;
- MINDCURE appoints Dr. Doron Sagman as Chief Medical Officer; announces certification of HIPAA compliance for iSTRYM;
- MindMed initiates Phase 2a LSD for ADHD trial; appoints Robert Barrow as CEO and Director;
- MYND Life Sciences provides update on depression gene modulation pathway patent application; acquires rights to IP covering psychedelics in the treatment of Alzheimer’s;
- Numinus commences trading on TSX;
- PharmaDrug adds Dr. Cindy Hutnik to Scientific Advisory Board;
- PharmaTher announce positive results for LSD microneedle patch;
- Silo Pharma engages advisors to explore listing on a national stock exchange;
- Wesana Health and MAPS resume negotiations.
Read more on our News page.
📰 The Microdose Features Psilocybin Alpha Editor-at-Large Graham Pechenik | As part of their 5 Questions series, UC Berkeley’s The Microdose newsletter spoke with Graham Pechenik, founder of Calyx Law and Editor-at-Large here at Psilocybin Alpha. Pechenik covered a number of IP-related topics, including the effects that patents could have on the research landscape.
🛑 Australia’s TGA Rejects Psilocybin and MDMA Rescheduling Push | Following two rounds of consideration, Australia’s Therapeutic Goods Administration (TGA) has ultimately rejected the rescheduling efforts, citing the emergent nature of evidence and explaining that “the therapeutic value… has not been established.”
🎓 UT Austin Launches Center for Psychedelic Research and Therapy | Following the success of House Bill 1802, which directed the Texas Health and Human Services Commission to conduct a study on the use of alternative therapies (including psychedelics) to treat veterans suffering from PTSD, the University of Texas at Austin has launched the Center for Psychedelic Research and therapy. The centre’s differentiator, leaders claim, is that its research team will also explore combination treatments of psychedelics with brain modulation techniques such as TMS.
⚖️ Canada’s New Health Minister Grants First Exemptions for Psilocybin Access | The recently-appointed Health Minister of Canada, Jean-Yves Duclos, has granted exemptions to 3 Canadians struggling with mental health conditions allowing them to access psilocybin therapy. Importantly, these patients don’t have terminal diagnoses, which was a hallmark of prior Section 56 exemption recipients.
🔮 Cowen Research Includes Psychedelics in its 2022 Themes | “2022 will be an inflection point for novel modalities and novel targets as these agents face off in competitive diseases and key approvals and data read outs loom,” writes Cowen Research in its 2022 Themes Report.
✋ Participants Needed: Monash Psychedelic Experiences and Effects Survey | Adults who have had a psychedelic experience during the past 2 years: consider participating in this Survey.
🗳️ Addiction Specialists Support Legalized Therapeutic Psychedelics | Results of a new survey show that the majority of addiction specialists, including psychiatrists, believe psychedelics show promise in the treatment of substance use disorders. Researchers were surprised by the results, given the hesitancy with which addiction specialists approached marijuana legalization.
👩🏫 NIH Workshop on Psychedelics as Therapeutics (Jan 12-13) | The National Institutes of Health is hosting a free 2-day virtual workshop on the Gaps, Challenges and Opportunities presented by psychedelics as therapeutics. You can register for this event, sponsored by a number of National Institutes bodies, via Eventbrite.
🏫 Y Combinator Accelerates Psychedelics Cos | Yeji Lee’s latest coverage of the psychedelics space for Business Insider takes a look at how 3 psychedelics companies got into the coveted startup accelerator.
📼 Treating Mental Illness with Psychedelics | Two videos produced by Monash University provide an overview of psychedelics for mental illness, as well as the work the Australian institution is forwarding.
📰 The Times Covers MDMA and Psilocybin for PTSD and Depression | A new piece in The Times covers how MDMA and psilocybin “’may help’ end the agony and could be used to treat PTSD and depression.”
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