Psyched: The Patents Dilemma, Compass 2020 Earnings, New Psilocybin Bill In NY
These days, the psychedelics finds itself in the midst of a public debate around the moral implications of patents and intellectual property for certain medicines and treatments.
The conversation began last month when Compass Pathways (NASDAQ: CMPS) introduced a series of patent applications for elements of psilocybin-assisted therapy as basic as using soft furniture, playing music and holding the hand of a patient, as patent lawyer Graham Pechenik noted on Twitter.
What seemed like a conversation about securing method patents grew into a larger — and very necessary — debate on whether or not it’s morally acceptable for companies to claim rights on broader aspects of psychedelic medicine. This includes IP on therapeutic molecules, some of which have existed in raw form long before the age of humans.
In short, the debate can be reduced to a valid concern: Can a capitalist model for growing businesses deliver the charitable goals proposed by most psychedelics companies? Or do the underlying goals of capitalism (to maximize profit, to stand out amongst the competition) play against these companies’ missions to help and assist suffering populations with access to psychedelic therapies?
Tim Ferris Lights A Fire: Author and investor Tim Ferris shared his concerns on Twitter.
“I am very concerned by the patent land grab warming up in the for-profit psychedelic world,” he said.
Companies attempting to secure broad patents could hinder scientific research and reasonable competition, he explained.
This seemed like an indirect blow to Compass, who appears to be positioning itself to secure a lot more than simple methodology for psychedelics therapy. As previously reported, the company’s attempts to advance approval of COMP360 (basically the psilocybin everyone knows in a crystal powder form), stand against the principles of Open Science and could be leveraged to obstruct society’s access to psilocybin treatment.
Angermayer Pushes Back: Ferris’ statements prompted a lengthy open letter from Christian Angermayer, the German billionaire behind Atai Life Sciences, who was an early backer of Compass Pathways, as it transitioned from an NGO to a for-profit model.
In his view “for-profit enterprises are at the center of delivering modern healthcare solutions.”
The entrepreneur noted that the cost to bring a drug to market is often measured in hundreds of millions of dollars and approximately 7 to 10 years of development time.
“As such, timely access to large amounts of capital is critical,” says Angermayer.
“Given those timelines and amounts needed, it should come as no surprise that investors want to eventually see a substantial return on their initial investment,” he added.
For Angermayer and the model being created by his companies, maintaining exclusivity -through both intellectual property and regulatory strategies- is necessary to ensure the return on investment required by investors.
“Without the chance of turning millions into billions, the investors disappear, and without the hundreds of millions of dollars from investors, progress to bring these medicines to patients slows to a glacial pace,” he notes.
Rick Doblin Weighs In: Rick Doblin, founder of the Multidisciplinary Association for Psychedelic Studies, joined the debate, stating that both the FDA and the European Medicines Agency incentivize the development of non patentable substances (like MDMA and psilocybin) by granting limited market exclusivity to the first actors to take the drugs through clinical trials.
He went on to say that patenting new and improved versions of classic psychedelics is completely appropriate, and a great way to expand psychedelic drug development and bring shareholder value.
However, he directed his focus to the Compass patent attempt, with little mercy, saying that for-profit companies will not be able to patent the core methods of psychedelics-assisted psychotherapy — which were developed decades ago.
"Attempts to patent therapeutic methods invented by others are doomed to fail, reputationally terrible, and capitalism gone rogue,” Doblin said. "To the extent that Atai and Compass seek to profit through patents on processes or therapeutic methods that they didn’t invent, they will fail and will squander their potential to be a force for healing and profit."
Ferris Responds: Tim Ferris issued an open letter, clarifying his concerns. He stated that he supports Compass and Atai and believes in the for-profit model for driving innovation. However, he warns that this model can carry serious risks, as the nature and incentives of capitalism can breed strategies that are very bad for innovation.
For Ferris, for-profit ventures can cause harm, and they often do.
“There will be compelling temptations to make unethical decisions, pursue unfair anti-competitive practices (e.g., patenting “inventions” that aren’t inventions), generate revenue without adding value (e.g., IP trolling), charge as much as possible ("Drug Goes From $13.50 a Tablet to $750, Overnight"), and treat the psychedelic landscape as a winner-take-all or zero-sum game. “Disruption” can be white hat or black hat; “scaling” can be done with net-gain or net-loss to an ecosystem,” he stated.
To mitigate these risks, individuals, groups, and third-party organizations need to be alert, says Ferris.
“Even the best of intentions can warp when they collide with the harsh realities of business,” he warns.
Compass Releases 2020 Earnings
Controversy aside, Compass Pathways recently released its financial earnings for the fourth quarter and year-end 2020.
The results reflect the growing investor excitement around psychedelic therapies that sprouted during 2020, as well as its successful NASDAQ IPO last September.
The company is not yet generating revenue from its operations, but numbers show a strong cash position and advancing R&D efforts.
Compass reported a net loss for the quarter of $18.8 million, and $60.3 million for the whole year.
Of these expenses, $4.5 million went to R&D in the fourth quarter and $23.4 million yearly. That is almost double from the sum spent on R&D during 2019 ($12.6 million), reflecting an increase in research efforts.
Cash position by the end of 2020 remained stable at $190.3 million, against $196.5 million by the end of the third quarter. This marks a significant growth in cash holdings from $24.9 million at the end of 2019.
New York Gets a New Psilocybin Bill, Spokane Could Legalize Soon
New York Assemblywoman Linda Rosenthal introduced a new legislation last Monday, meant to remove psilocybin and psilocin from the list of controlled substances.
Rosenthal had filed a similar bill last year, which died at the Assembly Health Committee. This bill is now under review by the same committee. Growing public and institutional interest in psychedelic treatment could help push the bill forward this time, Marijuana Moment reports.
Spokane could become the first city in Washington State to join the growing number of jurisdictions to decriminalize psilocybin.
A measure was introduced in the City Council by grassroots group Decriminalize Spokane, and now awaits review before it is voted upon by lawmakers to allow the group to begin collecting signatures.
If the measure passes and the group gathers enough voters, a ballot on the decriminalization of psilocybin could be put to vote as early as November of this year.
The Milestone Round
MindMed (OTCQB: MMEDF) printed 6 million new units, in a private placement for proceeds of CA$19.5 million ($15.4 Million). Cash on hand increased to CA$205.2 million ($162 million).
Numinus (TSXV:NUMI) expanded its psychedelics research laboratory by 7,500 square-feet, which is expected to be completed by the end of the year. The Vancouver-based company has recently received new amendments under Canada's Controlled Drugs and Substances Act, that allow it to work with a wide variety of psychedelics including Mescaline, DMT, MDMA and Psilocybin, as well as Ketamine and LSD.
Silo Wellness secured the rights to the Bob Marley brand for the development of a line of functional and psychedelics mushrooms.
See more from Benzinga
Compass 2020 Earnings Call: Strong Cash Positions And Advancing R&D
Psyched: Atai Raises 7M, Silo Wellness Goes Public, Mydecine Completes Export Of 'Magic Mushrooms'
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
