The Times - UK (2020-10-20)

44 1GM Tuesday October 20 2020 | the times

Business

Heady days for psychedelic missionaries

as Wall Street comes along for the trip

George Goldsmith and Ekaterina

Malievskaia have been on quite a trip

since they first began dabbling in

hallucinogens nearly a decade ago.

The married couple consider

psychedelics an effective weapon in

the fight against mental illness.

They’ve attracted an eclectic cast of

backers for their research, including

the maverick tech tycoon Peter Thiel.

Compass Pathways, their four-year-

old venture based in London, has

developed a synthetic version of

psilocybin, the active ingredient in

magic mushrooms. Ms Malievskaia

and Mr Goldsmith believe that when

combined with therapy, their

compound can help alleviate the

symptoms of clinical depression.

It’s an experimental treatment but

that hasn’t stopped Compass

Pathways from making waves on Wall

Street. Last month the pair floated

their business on the Nasdaq

exchange, raising $147 million in new

capital. Since then its market value

has risen by a third to $1.3 billion,

leaving Ms Malievskaia, 54, and Mr

Goldsmith, 65, with paper fortunes of

$170 million each.

Their rapid rise is all the more

remarkable given that Compass

Pathways is a mere dot on the surface

of the pharmaceutical industry. It

employs 48 people and won’t start

generating revenue until 2025. A

sceptic might say its heady valuation

is the product of the irrational

exuberance gripping the US stock

market even as Covid-19 devastates

the world’s largest economy. Mr

Goldsmith, an American

entrepreneur, sees it differently.

“The mission is huge and the

need is huge,” he told The

Times in his first

interview since the

Nasdaq float. “The

times that we are in

demand that we take

a good fresh look at

this and really step

up to the plate.”

Compass Pathways

needed to put the

“right amount of fuel in

the tank to go on this

journey, and to bring

investors along”, he said, adding:

“Sadly, this [depression] is a very

common and large problem.”

He said that 320 million people

worldwide suffer from a major

depressive disorder but 100 million of

those would not respond to

traditional medication. By his

estimation, depression costs more

than $200 billion every year in the

US alone once treatment charges and

lost economic output are factored in

— all that before the incalculable

pain that patients and their families

have to endure.

Compass Pathways’ treatment

involves administering a dose of

synthetic psilocybin. Patients “trip”

for between six and eight hours under

the eye of a trained therapist and

receive follow-up sessions. According

to Compass Pathways’ filings with the

US financial regulator, the process

could produce “rapid reductions in

depression symptoms and effects

lasting up to six months”.

In person, Mr Goldsmith is an

earnest character who is well versed

in the history of psychedelics and

their use in medical research.

Compass Pathways is part of a long

heritage.

In 1938 a Swiss chemist called

Albert Hofmann first synthesised

lysergic acid diethylamide, or LSD.

Five years later he was the first

person to experience an LSD trip

after ingesting the substance. In the

1950s he “discovered” psilocybin

through his research into

hallucinogenic Mexican mushrooms.

However, psychedelics fell out of

favour after LSD became an emblem

of the counterculture movement of

the 1960s, leading to bans across the

world. Over the past couple of

decades, researchers have returned to

the field and there is a growing body

of academic work that suggests

psychedelics can help people with

mental illness. The idea is that

patients with psychiatric problems get

caught in deep grooves of destructive

thought from which they cannot

escape. Psychedelics can shake

patients out of these ingrained

patterns of thinking and make them

amenable to change, according to

some scientists.

Ms Malievskaia, a Russian-born

physician, first stumbled across these

findings in 2013. A year earlier her

son had developed acute depression

during his first term at university in

the US but found little solace from

psychoanalysis and conventional

drugs. At the instigation of his

mother, he recovered after taking

psychedelics and ketamine under the

supervision of a therapist.

Initially Ms Malievskaia and Mr

Goldsmith, below, tried to pursue

their psilocybin project as a non-

profit venture.

But by 2016 they realised they

would need large sums to fulfil their

ambitions, so they established

Compass Pathways as a

private company. Before

last month’s initial

public offering they

had raised

$117 million. Mr

Thiel, the Paypal

and Facebook

billionaire, owns

6 per cent of

Compass Pathways

and the founders

each have a 13 per

cent stake. Its largest

shareholder is Atai Life

Sciences, a German mental

health investment fund in which Ms

Malievskaia and Mr Goldsmith have

small holdings.

Compass Pathways will use some of

the money raised last month to

investigate whether psilocybin can be

used to treat other illnesses, such as

anorexia. Mr Goldsmith added:

“There’s a very interesting group

we’re looking at — patients suffering

with anxiety and depression after a

cancer diagnosis.”

The British company is among a

clutch of private enterprises looking

to tap into the potential of

psychedelics. Mind Med, a Canadian

company that has applied to list on

the Nasdaq, is conducting a clinical

trial for the use of LSD to help people

suffering from anxiety disorder.

Compass Pathways’ phase II clinical

trial continues apace and it expects to

report data in the second half of next

year. The company will then need to

conduct further trials with more

patients to prove the efficacy and

safety of psilocybin. If it gets the final

nod from European and US

regulators, it may be in a position to

start offering the treatment in 2025.

Mr Goldsmith said it was too early

to say how much it would charge for

the treatment, which requires many

hours of therapy.

He added: “Having something

brilliant but unaffordable will not be a

success.”

A trial drug based on

magic mushrooms and

aimed at depression has

been making waves,

writes Simon Duke

Compass Pathways share price

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