Scoop: Johnson & Johnson to Lead Delix Therapeutics’ $85M Series C

Delix Therapeutics was the first well-funded ‘non-hallucinogenic psychedelic’ drug developer to emerge, in many ways defining the category. It raised over $100M in 2021 via financings led by the likes of ARTIS Ventures and RA Capital.

The startup, and its backers, had hoped to harness the apparent neuroplasticity-promoting properties of psychedelics without the subjective ‘trip’, an attractive prospect that could bypass the logistical hurdles of traditional psychedelic candidates, which call for in-clinic administration and monitoring.

The class went on to become a popular target for more traditional biotech and healthcare funders, with a whole pipeline of candidates springing up over the past four years. (See our Non-Hallucinogenic Psychedelic Pipeline Tracker for more.)

But recent regulatory tailwinds and positive late-stage readouts concerning more conventional psychedelics, with the trip intact, appeared to have dialled down interest in the non-hallucinogenic variety, and Delix itself has been less splashy in the last year or two.

But the company kept at it, announcing late last year that its Phase Ib study of its lead candidate, zalsupindole (DLX-001, which it says is inspired by 5-MeO-DMT) in major depressive disorder (MDD), was positive, having shown “clear effects on potential markers of plasticity as well as rapid, robust and durable antidepressant effects”. (See Delix Posts Early Efficacy Signal… for more.)

Delix also shared that FDA had cleared its Phase II study design, featuring at-home, once-daily or twice-weekly dosing of the candidate.

The small Phase Ib study, with 18 MDD patients and no control arm, was presumably a tough sell to investors, however. Around the same time as that topline readout, the company showed signs of financial strain, with a reduction in force and the departure of its Chief Medical Officer, Aaron Koenig.

This Series C round, then, will be a welcome cash injection for Delix, which will presumably hope to push on with its clinical development of DLX-001.

It also signals the entrance of yet another large pharmaceutical company into the world of psychedelics-related drug development.

Johnson & Johnson, of course, has more experience than any other pharmaceutical company in developing and marketing a psychedelic-like product, with Spravato (its esketamine nasal spray) often pointed to as the closest analog to psychedelics’ likely delivery model. (See our interview with Husseini Manji, who led the development of Spravato at the company, for more.)

It’s notable, then, that it has opted to dabble in the non-hallucinogenic side of the field, as opposed to taking an interest in a pipeline that includes drugs that would be administered in-clinic, like Spravato.

But we have seen at least one large pharmaceutical company, AbbVie, initially dip its toes in the world of non-hallucinogenic candidates before going on to acquire a decidedly psychedelic candidate a short while later.

Johnson & Johnson has signed a term sheet to lead the round, we understand, but the financing has not yet closed.

Those terms include a right of first negotiation following Phase II data from the DLX-001 program, covering both that lead candidate and the whole company.