Tue. 19 Oct 2021, 11:22am ETBenzinga
In: Penny Stocks, Small Cap, Markets

Ronan Levy, co-founder and executive chairman of Field Trip Ltd (NASDAQ:FTRP), a company developing a network of psychedelics-assisted therapy clinics; Doug Drysdale, CEO, of Cybin (NYSE:CYBN), a drug development company in the psychedelics sector, and Raymond D. Harari managing director of Canalis Capital, joined Javier Hasse, managing director of Benzinga Cannabis, at last week's Benzinga Cannabis Capital Conference. They talked about new investment opportunities in the psychedelics sector.

Here are excerpts from their conversation.

Why Is This An Investable Sector?

Broadly speaking Harari sees three silos for investments in the psychedelic space. First, the drug development space or, “the molecule space, the biggest one, where people are working to get clinical patents.” According to Harari, close to 80% of capital went into that silo.

The second segment is clinics and retreats “where companies connect with clients”.

And finally, a third segment of “ancillary companies.”

In terms of investing, Harari said it is time to be cautious and that investors need to be able to tell the difference between companies that run with the hype and those with a long-term commitment. “This is a great time to connect with entrepreneurs,” Harari said.

Levin from Field Trip noted that although many people try to compare psychedelics to cannabis, that is not a fair comparison.

“Psychedelics speak to the mental health market. When we look at the studies, we see that a single psilocybin-assisted session can provide anti-depressant relief for five years” Levin said and then explained that “studies phase-3 looking at MDMA-assisted therapy for PTSD show a 70% near effective cure rate. The econometrics on MDMA-assisted therapy suggest that a program with 3 MDMA-assisted sessions over the course of three months will save insurance and health care providers 100,000 dollars per patient.” He added that “Investing in psychedelics is investing in what is going to solve our current mental health crisis.”

How Are Psychedelic Therapies Different From Dropping Acid At A Party?

Psychedelic medicine is not like conventional medicine.

“It is not just the drug that does the job, the molecules, or the entourage effect, it is the pairing of the psychedelic experience with therapy in certain settings for certain therapeutic outcomes. When a person comes in at Field Trip for one of our ketamine-assisted therapies, we help them prepare for the session. The treatment develops neuroplasticity in patients, their brain actually grows new neural synapses,” Levin replied.

“Used in controlled settings the risks of a ‘bad trip’ are actually very remote. There are challenging trips, and often these provide the biggest breakthroughs. With the right support, therapeutic protocols, and settings, these trips can be really magical.”

Intellectual Property In The Psychedelics Space

Drysdale noted that psychedelics will continue to go mainstream and the pharmaceutical industry will predominantly invest in the sector.

“The next 18-24 months are going to be interesting, we are going to see new developments. The IP landscape in psychedelics is the tip of an iceberg. We will see winners, losers, and deals ahead,” Drysdale said. 

“Merck (NYSE:MRK) and Novamind  (OTC:NVMDF) are developing new molecules in a cooperation agreement. But we will probably see big pharma taking it seriously to compete in the mental health market” added Harari.

However, Levy highlighted that delivery mechanisms remain a challenge.

The Hurdles of Clinical Trials

Regarding hurdles facing clinical trials, Drysdale argued that one of the problems is that there are too few clinics “with experience and training to do this. That is why it is important to develop a plan to train professionals methodically.”

Levy concurred with Drysdale and explained this is why Field Trip has an integrated platform. “You need infrastructure to make a mark.”

Regarding ancillary companies, Harari said “the main hurdle is the stigma. It is really hard to change people's mindsets. For this, the education component is key to turn the perception of psychedelics from being a drug to being a medicine.”