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Startup Making Dissolvable Psilocybin Strips Goes Public

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Cybin Inc., a Canadian pharmaceutical development startup focused on psychedelic drugs, went public on the NEO Exchange in Toronto on Monday through a reverse takeover. Cybin’s stock jumped 23% during the first two days of trading.

The company plans to bring to market an a dissolvable oral strip dosed with psilocybin, the psychedelic compound found in “magic mushrooms,” to help treat major depressive disorder when coupled with therapy. Cybin is in the early stages as it still needs to get approval to launch its clinical trial on its drug Psilotonin.

“This is just the beginning,” says Cybin CEO Doug Drysdale, who joined the company in August after working in the pharmaceutical industry for 30 years. Drysdale says that the company hopes to launch a phase two trial at the top of 2021.

Cybin listed its shares at 0.75 Canadian cents on Monday and the market closed with the company’s stock price at 0.92 Canadian cents on Tuesday. Cybin’s market cap is only 115 million Canadian dollars ($88 million).

Cybin did not hit the market via an initial public offering, instead it went public through a reverse take over. In early November, Cybin completed its reverse takeover of Canadian mining company Clarmin Explorations Inc., which was a shell company listed on the TSX Venture Exchange. After delisting from that exchange, Cybin applied to the NEO and was approved last week.

Before going public, Cybin closed a 45 million Canadian Dollars ($34 million) private placement deal, raising money from investors including Subversive Capital, RA Capital Management, Bail Capital, LifeSci Venture Partners, and others.

The company will use its capital to fund its lead program targeting major depressive disorder. Drysdale says Cybin is conducting its clinical trials in Jamaica because it’s cheaper to run studies in the Caribbean nation and the government has decriminalized the compound. Psilocybin and other psychedelic compounds are banned by federal law in the U.S. and Canada. However, a company can conduct research on these substances with the proper license and permission.

If approved by the Ministry of Health in Jamaica, Cybin hopes to launch its trial by the beginning of 2021. The study will be conducted in two parts and run under FDA guidelines at Jamaica’s University of West Indies Hospital. The first part of the study will identify the correct dose of psilocybin with 40 patients and the second leg will study the dose in 120 patients with major depressive disorder. (Eighty patients will be in the active arm, while 40 patients will be in the placebo arm.)

Cybin will not be manufacturing its own products, nor does it have the license required to handle psilocybin. The company partnered with Quebec-based pharmaceutical drug delivery manufacturer IntelGenx to make its psilocybin transmucosal films.

Cybin, which was founded in 2019 by a banker and two cannabis entrepreneurs and investors, is one of the newer entrants to the psychedelic renaissance. Nasdaq-listed Compass Pathways, a U.K.-based company that has patented a polymorphic form of psilocybin, and nonprofit Usona both have received breakthrough therapy designation from the FDA for psilocybin therapies. Compass Pathways is focusing on psilocybin therapy for treatment-resistant depression while Usona is focusing on major depressive disorder.

Psilocybin is a tryptamine that binds to serotonin receptor 5-HT2A in the brain. The compound causes visual hallucinations and profound changes in consciousness. Studies in academic institutions including Johns Hopkins and Imperial College London have found that psychedelic drugs have significant potential in treating mental health disorders, including certain types of depression.

In November, Johns Hopkins published results from its latest study of adults with major depressive disorder finding that two doses of the psilocybin combined with psychotherapy, produced “large, rapid, and sustained antidepressant effects” on patients. Four weeks after the session, half of study participants—13 patients out of 24—were still in remission.

The studies are also leading to changes in state law across the U.S. On Election Day, Oregon passed Measure 109, which allows for the regulated use of psilocybin mushrooms in a therapeutic setting for people 21 and older. In Washington, D.C., voters decriminalized non-commercial use, cultivation and distribution of all hallucinogenic fungi after passing Initiative 81.

“These measures are great, they are further positive momentum for psychedelics and further validation for psilocybin as a potential therapeutic agent,” says Drysdale.  

While Drysdale sees Measure 109’s therapeutic framework as “sensible” and safe, he views Initiative 81 as a little too unstructured. “We already had one backlash that put these substances on the shelf for 50 years. We want positive outcomes,” says Drysdale. “Given the traumatic nature of these sessions … you don’t want it to happen in a non-therapeutic environment.”

Cybin is starting with psilocybin, but Drysdale says the company will eventually “optimize” the molecule for their second- and third-generation medicines. Psychedelic-assisted therapy sessions require patients to be guided throughout a four-to-six-hour trip in a therapist’s office. (Patients also attend therapy sessions before and after to integrate their experience.) Drysdale says an ideal medication could fit into the standard 60-minute therapy appointment.

“We’re not looking to totally recreate the wheel, but we’re looking at ways to adjust molecules to improve the treatment profile,” says Drysdale. “In our mind, we’re looking at ways to potentially have a faster onset of action and a shorter duration, something more manageable, maybe an hour.”

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