This morning, Monday May 24th, Enveric Biosciences (NASDAQ: ENVB) announced that it has entered an agreement to acquire privately held biotechnology company MagicMed Industries.
MagicMed has a state-of-the-art facility at the University of Calgary, which it uses to perform extensive R&D on naturally occurring psychedelic molecules. Their focus is the discovery and early development of novel drug candidates that are structurally similar to psychedelics, with “vastly improved pharmaceutical characteristics and commercial potential.”
MagicMed also boasts The Psybrary, a vast library of novel psychedelic derivatives that they’ve developed through synthetic biology and traditional chemistry. They currently have 13 patent applications filed for derivatives of psilocybin and DMT, with an additional 2 patent applications filed for MDMA and mescaline derivatives.
“Our proposed acquisition of MagicMed underscores the core fundamental mission of Enveric to form a drug discovery and clinical-stage biotechnology company with a focus on bringing forward nature-originated therapies to improve the standard of care and serve unmet needs in oncology and CNS indications.”David Johnson, Chairman and CEO of Enveric Biosciences
We recently had the opportunity to chat with Dr. Joseph Tucker, CEO and founder of MagicMed. Continue reading to learn more about MagicMed’s roadmap, the use of AI in psychedelic research, and its latest deal with Enveric.
Psychedelic Invest: Can you give us a little bit of background about yourself and MagicMed?
Dr. Joseph Tucker: Sure. I’m a biotech guy. I have my PhD in Biochemistry and molecular biology. I’ve also been a drug developer and taken some other companies public in over 20 years.
What we really do is make molecules. We started this about a year ago when we recognized that most people were missing the real opportunity in the psychedelic medicine space.
The hallmark of these molecules is they cause major hallucinations, and you can control a certain setting and dose and still get bad trips. So, this is ripe for creating improved molecules, and so that is what we set out to do. For the last eight years we have been using synthetic biology to make modifications to the molecules that are too challenging or too expensive for chemists to make, and to create new molecules.
PI: So, would you say that MagicMed is a research company?
Dr. Joseph Tucker: I would say that the first generation of our business model is the entire drug development pipeline. Right at the beginning you need to create a whole bunch of derivatives, and you have no idea whether they work or not. Then you must screen them against something that identifies good candidates. That is the very beginning of the process for everybody who’s doing real drug development. That’s where we think there’s a huge hole in the sector. And so that’s the gap we’re trying to fill. We’ll do that to molecules and then partner and license them off to lots of different companies.
PI: I believe you said you have 13 patents, is that correct?
Dr. Joseph Tucker: It’s actually more than that now.
PI: Are those patents for individual molecules or something else?
Dr. Joseph Tucker: Each patent covers a large number of molecules. When you take all the patents together and see how many molecules these patents are covering, it’s more than one hundred million. To give you an example, the first batch of patents are all around tryptamine, but we are now working on mescaline core and next we’ll be working on ibogaine. You take those core molecules, and you change the decorations, you change how that molecule binds, fits, and its receptor. So, when each one is representing hundreds of thousands and you add them all up, it’s like one hundred million.
PI: Got it. Is your goal to then to further research those molecules to see which ones have efficacy, or will you be giving that ability to a partner?
Dr. Joseph Tucker: Our plan is basically picking through those molecules for the partner at the partner’s behest. The partner says, “I’m looking for a PTSD molecule for a certain patient population, and I’d like it if the core structure was tryptamine, what do you got?” And I’ll say, well, what serotonin receptors do you want it to bind to? Which ones do you want it not to bind to? What do you want it to do? And we’ll go to the Psybrary to see what fits their needs. They’ll come to us with their target product profile and we’ll create and test some molecules for them. Once we’ve shown them the data, they will choose one.
PI: So, is the revenue model a licensing deal?
Dr. Joseph Tucker: They pay for the R&D, then it’s a license model. They get an exclusive license to that one molecule that they chose. We get to keep all the rest and all the information. They also get an exclusive license for its method of manufacture and all its applications.
PI: Do you have any partners in place or in talks already?
Dr. Joseph Tucker: Yes. We probably have about 10 partnership discussions going on right now. We have not signed any yet, but we’re at term sheet stage for a number of them.
PI: Is there any common denominator for what all these companies are looking for?
Dr. Joseph Tucker: There is a bit of a continuum. We’ve had more than one company come to us and say, “What do you got? Just give us something right now.” You can imagine some companies just want a molecule so that they can go and raise money because they can say they’ve got a molecule. We’ve also talked to some very sophisticated companies. There are some that have real drug developers on their teams. Those guys, they’re really pharma trained people. So, there’s a really strong continuum.
Here’s what I will say, the biotech companies are by and large looking for something like a psychedelic, for anxiety or depression – the classic stuff you hear about in the clinical trials. The Big Pharma people are saying “We’re kind of scared about this whole hallucination thing, but we are interested in neuroscience. What do you have that fits in the box of neuroscience and isn’t necessarily hallucinogenic?” So that is an interesting distinction. I think it tells us that we’ve got a little way to go as a sector before Big Pharma is willing to take the risk.
PI: So you are saying they may be interested in a molecule that has all the benefits of a psychedelic without the side-effect of hallucinations?
Dr. Joseph Tucker: That’s the takeaway, yes.
PI: For MagicMed, you said that part of the revenue model is R&D, then eventually some sort of licensing with a royalty.
Dr. Joseph Tucker: That’s Gen 1 of our business model.
PI: Do you see the R&D side of the business being able to support the company as you wait for your partners to go through their clinical trials?
Dr. Joseph Tucker: In the short term, are the revenues going to support the company if we have 5 to 10 partners? Absolutely. That will cover our costs. Our goal is to have partnerships at that level. As quickly as we can get into the clinical trials, then the milestone payments go up. Then we’re not actually spending any energy on that molecule anymore, the partner is doing it, but we’re still getting paid. Ultimately, though, the way to get big as a company is to develop a clinical asset of your own. If this works out the way we expect, we think we’ll have a dominating patented state on the new molecules in the space. We also think that we will develop knowledge that nobody else has. A couple of years from now, could I see us going “hmm, are any of these worth taking forward all by ourselves?” I could see us going there later, and that’s when we become a completely different type of company.
PI: So that’s what you would consider Gen 2 of your business model?
Dr. Joseph Tucker: Yes, that would be Gen 2.
PI: What is MagicMed’s relationship with the University of Calgary?
Dr. Joseph Tucker: Our chief scientist is a full professor at the University of Calgary, and I also come from the University of Calgary myself. We have three partnerships with the University of Calgary, one in the biology department, one in the chemistry department and one in the faculty of medicine, all working on various aspects of R&D.
PI: I noticed that ketamine was missing from your selected drugs list. Is there a reason for that?
Dr. Joseph Tucker: Yeah, there is. It’s a dissociative anesthetic as opposed to a hallucinogen so it’s doing different things to people.
What gives us access to new molecules is synthetic biology, which means we’re using enzymes from nature which means you need to find something that is originally from nature or derived from something from nature, like mescaline or psilocybin. These are made in nature.
Even things like MDMA and LSD, core parts of the molecule, came from something in nature. Ketamine doesn’t really fit into that same basket, so it’s a lot harder to mess with. It’s doing different things. It’s going through a different pathway and personally I’m a little concerned about ketamine. It’s an anesthetic. It certainly doesn’t appear to be as dangerous as opiates, but whenever you get into that side of things, I start to worry about possibly creating addiction in society. So yeah, ketamine is something that I’m not really comfortable dealing with. I’m a little worried about it to be honest.
PI: Obviously, there’s been a lot of debate in the industry right now with patenting. Maybe you can give a little color on how you’re feeling about that?
Dr. Joseph Tucker: A lot of people don’t draw the distinction between the types of patents that we’re filing and the types of patents some other entities are filing. From our point of view, things like psilocybin, psilocin, mescaline, and LSD are all public domain. They were either created 50 years ago or they’re a natural molecule. In fact, they’ve been used by society for essentially what we’re talking about right now. Somebody was using psilocybin in a religious ceremony in South America five hundred years ago. What were they trying to do? They were trying to connect themselves with their spirituality, with the greater universe. Why? To understand their place in the universe. What does that do for you? Well, it makes you not depressed because you understand your place in the cosmos.
In my opinion, that’s what people have been using these things for all along. Is that something that I think that you should be patenting? No, I don’t think you should be patenting that. We don’t try to patent any old molecules for a use that it’s been used for by society. It already belongs to society.
What we’re doing very specifically is making completely new molecules, molecules that chemists haven’t been able to make or haven’t existed in nature before.
So what use is one hundred million molecules if you don’t know what it does? It’s not worth anything. We then must spend a lot of time saying, “Are any of these molecules any good?” Most of them are not going to be any good. So, there’s a lot of time and energy to figure out which ones are good and then proving that in clinical trials. Then our partner finally gets to generate revenue back. So, do I think that should be patented? Yeah, that should be. It’s all new molecules.
PI: Any idea when the public IPO will happen?
Dr. Joseph Tucker: Very soon. As you know, we’ve filed on SEDAR. So, because we had previously raised money and we had enough shareholders, we did a direct list prospectus. We could do an IPO, or we could do a direct listing – either option is open to us. We’ve had a few rounds of discussions with the commission. We’re at a point now where we’re very close to being able to go public if we want. What we’re doing right now is looking at all our options. Do we just direct list? Do we IPO? What else?
It’s also an exciting SPAC world out there. There’s a lot of little companies that are saying “I’ve got this piece. I’ve got this piece. I’ve got this piece.” If you put all this together, could you create a powerhouse? We’re investing in all those options, but we’re very close to being able to go public and we’re looking to see what’s our best option right now.
Editor’s Note: On May 24, 2021, two weeks after recording our interview with Dr. Joseph Tucker, MagicMed entered into an agreement with Enveric Biosciences (ENVB) where Enveric would acquire MagicMed and Dr. Tucker would be appointed CEO of the combined company.
PI: Is there anything else that you’d like to add or discuss about MagicMed?
Dr. Joseph Tucker: We didn’t talk at all about our addition of artificial intelligence to the program, and I think that it’s very meaningful. Just as we’ve called the library of molecules, the “Psybrary”, we’re calling our artificial intelligence “Psy A.I.” It’s very meaningful for two reasons. One, the number of molecules we must screen through is large, and so we need to use pattern recognition because we have so much data. The other thing is how it helps us accelerate the molecules through the preclinical work. Many companies in this space have said, “let’s jump into a phase II trial on something that’s really a generic” just because it’s a phase II trial and looks good. But what they’re really doing is setting themselves up for all kinds of pain later because there’ll be ten competitors with the same molecule. So even though it’s obvious to usually get a better new molecule, people are shying away from it because of the time and money involved. The A.I. for us is a big value add because we think it’ll shorten that.
PI: Is there someone on your team who is focused on developing that platform?
Dr. Joseph Tucker: We have two companies along with our own internal people that are building this platform internally for us. One is headed by a guy who is part of the original IBM Watson project, and the other is headed by a guy who built a piece of software which identified insider trading in the stock market. Those are our two brainiacs that are behind it.
PI: This was great. Congratulations, looking forward to seeing your future.. We really appreciate your time.
Dr. Joseph Tucker: Awesome. Great to meet you, and thanks for your time as well.
For more information on MagicMed, please visit their website here.