Psychedelic News Roundup: August 16th, 2024

A lot has happened the past week. Let us summarize some of the events surrounding psychedelic drug development companies and the industry as a whole.

Lykos Therapeutics announced a reorganization plan following the FDA’s rejection of its application for an MDMA-based drug intended to treat PTSD. Despite the setback, Lykos remains committed to pursuing FDA approval. The reorganization includes bringing on Dr. David Hough, a former Johnson & Johnson executive, to lead the clinical program and resubmission process, and cutting staff by 75% to focus resources on the drug’s approval. Additionally, Dr. Rick Doblin, founder of the Multidisciplinary Association for Psychedelic Studies (MAPS), will depart from Lykos’ board to concentrate on broader advocacy for psychedelic medicine. Lykos acknowledges the FDA’s decision as a challenge but is determined to bring its pioneering therapy to market.

Mind Medicine (MindMed), a New York-based psychedelics company, has announced a public offering of approximately 9.2 million shares at $7 each, aiming to raise $75 million. This capital will be used to fund research and development of its psychedelic treatments, particularly those in clinical trials for anxiety disorders. Some investors are offered a slight discount on shares. Despite having $252.3 million in cash, sufficient to last until 2026, MindMed faces financial challenges with an accumulated deficit of $344.6 million and a $54.4 million net loss in Q1 2024. The U.S. FDA has granted Breakthrough Therapy designation to MM120, a promising LSD-based treatment for generalized anxiety disorder, signaling significant progress in their development pipeline.

Cybin Inc. (NYSE American: CYBN) reported a net loss of C$15 million for Q1 2024, consistent with last year, while operating expenses rose to C$16 million. The company, which is still developing its drug portfolio and has no revenue, holds C$183 million in cash, with access to over C$247 million when considering recent public offerings and warrants. Cybin is advancing its two lead programs: CYB003 for Major Depressive Disorder (MDD), which received FDA Breakthrough Therapy Designation, and CYB004 for Generalized Anxiety Disorder (GAD). The company plans to initiate a Phase 3 study for CYB003 in late summer 2024 and expects Phase 2 data for CYB004 by late 2024 or early 2025. Cybin remains focused on progressing towards approval and commercialization of these novel mental health treatments.

Relmada Therapeutics, Inc. (Nasdaq: RLMD) reported a 13% stock jump following its positive Q2 2024 financial results and comments. Despite no revenue, the company’s net loss decreased to $17.8 million, or $0.59 per share, better than the previous year’s $25.3 million loss and surpassing analyst expectations. Research and development expenses dropped due to the completion of key Phase 3 trials, with G&A expenses also decreasing. Relmada’s CEO highlighted significant progress in their clinical programs, particularly the Phase 3 trials for REL-1017 as a potential treatment for major depressive disorder (MDD). The company expects key milestones, including enrollment completions and interim analyses, by the end of 2024, with cash reserves sufficient to support operations into 2025. Additionally, Relmada is advancing its REL-P11 program, targeting metabolic disorders, with plans to initiate a Phase 1 study in Canada by year-end.

FSD Pharma Inc. (NASDAQ: HUGE) is rebranding as Quantum BioPharma Ltd. and consolidating its shares to regain compliance with Nasdaq’s minimum bid price requirements. The name change and consolidation, reducing Class A and Class B shares significantly, will take effect on August 15, with the new trading symbol QNTM. Shareholders approved these changes in July. Additionally, the company announced a private placement of Class A shares, primarily subscribed by key executives. Legal challenges persist, including a $3 million arbitration award against a former CEO and an ongoing $53 million lawsuit related to trade secrets. The company, which reported a net loss of over $2 million for Q1 2024, continues to face financial difficulties with an accumulated deficit of $159 million.

Neuronetics, Inc. (NASDAQ: STIM) is acquiring Greenbrook TMS Inc. (OTCMKTS: GBNHF) in an all-stock transaction, with the combined company continuing under the Neuronetics name and NASDAQ ticker STIM. The deal, expected to close in Q4 2024, will delist Greenbrook’s shares from the OTCQB. Greenbrook, a leading provider of Transcranial Magnetic Stimulation (TMS) and Spravato for depression treatment, has administered over one million treatments. The acquisition aims to boost Neuronetics’ brand recognition for its NeuroStar TMS product, enhance business operations, and expand training opportunities. The combined company anticipates significant cost synergies, improved financial performance, and expects to double its revenue scale to approximately $145 million in fiscal 2023, with mid-teens revenue growth projected for 2025 and 2026.

Atai Life Sciences (NASDAQ: ATAI) reported a net loss of $57.3 million for Q2 2024, a significant increase from the $33.0 million loss in the same period last year. The company, still in the drug discovery phase, recorded minimal revenue of $273,000 and saw its cash reserves drop to $103.3 million, down from $154.2 million at the end of 2023. Key expenses included a $30.6 million reduction in the fair value of its assets and liabilities. Atai’s main focus is advancing its drug pipeline, particularly VLS-01, a DMT-based treatment for treatment-resistant depression (TRD), which showed promising Phase 1b results. The company plans to start a Phase 2 study for VLS-01 by year-end 2024, along with a Phase 2 study for its MDMA-based drug, EMP-01, targeting social anxiety disorder. Despite financial challenges, Atai remains committed to progressing its clinical programs.

Enveric Biosciences (NASDAQ: ENVB) reported a reduced net loss of $1.9 million for Q2 2024, down from $6.4 million in the same quarter last year, but indicated it may need additional funding to continue advancing its drug candidates. The company is prioritizing the development of EB-003, a novel non-hallucinogenic compound for treating depression and anxiety, with plans for a pre-Investigational New Drug meeting with the FDA in early 2025. Enveric is also progressing with EB-002, a next-generation psilocin prodrug for anxiety disorders, and recently secured a U.S. patent for its use. The company ended the quarter with $3.5 million in cash and is exploring licensing deals for other pipeline candidates, potentially worth up to $410 million in milestone payments and future royalties.

Alto Neuroscience, Inc. (NYSE: ANRO) reported a net loss of $16 million for Q2 2024, up from $8.7 million in the same quarter last year, as it remains in the drug discovery phase with no revenue. The company ended the quarter with $193.6 million in cash, which it expects will sustain operations until 2027. Increased research and development expenses, totaling $13.2 million, were driven by ongoing Phase 2b studies for ALTO-100 and ALTO-300, alongside milestones for other drug candidates. Alto’s lead drug, ALTO-100, is being developed for major depressive disorder (MDD) and bipolar depression (BPD), with significant progress reported, including the enrollment of 301 patients in a Phase 2b MDD study. The company anticipates several key milestones, including topline data from ALTO-100’s MDD study in October 2024, with further results from additional studies expected through 2026.

Filament Health Corp. (OTCQB: FLHLF) reported a net loss of C$1 million for Q2 2024, an improvement from the C$1.5 million loss in the same period last year, while generating C$109,708 in revenue from licensing deals. The company, still in the drug discovery phase, holds C$1.3 million in cash but faces financial challenges with an accumulated deficit of C$33 million and negative cash flows, indicating it will need to raise additional funds to continue operations. A significant milestone this quarter was the authorization of a Phase II clinical trial by Health Canada and the US FDA for PEX010, a psilocybin-based drug candidate for methamphetamine use disorder. Filament also announced the resignation of CFO Warren Duncan due to medical reasons, with Steven Nguyen continuing as Interim CFO.

Seelos Therapeutics Inc. (Nasdaq: SEEL) reported a net income of $1.7 million for Q2 2024, a significant improvement from its $29.5 million loss in the same quarter last year. Despite this, the company warned that it may not survive another year without additional capital. Seelos, which is still in the pre-revenue stage, reported $376,000 in grant revenue for the quarter but remains financially strained with only $294,000 in cash and total assets of $2.3 million against $30.5 million in liabilities. The company has paused non-essential preclinical work to focus on advancing treatments for major depressive disorder, ALS, and other conditions, but it urgently needs new funding to continue operations and meet Nasdaq requirements. The company acknowledged substantial doubt about its ability to continue as a going concern over the next 12 months.

Bright Minds Biosciences Inc. (Nasdaq: DRUG) reported a net income of C$413,843 for Q3 2024, a significant turnaround from the C$1.4 million loss in the same quarter last year, primarily due to a substantial tax credit. Despite this quarterly gain, the company remains in a pre-revenue stage with year-to-date losses of C$1.8 million, down from C$5.8 million the previous year. Bright Minds plans to raise additional capital through equity financings and is exploring strategic partnerships and licensing opportunities. The company continues developing treatments for rare pediatric epilepsies and depression but has yet to bring any drugs to market. With C$6.2 million in total assets, including C$6.1 million in cash, and C$178,628 in liabilities, Bright Minds has enough resources to operate for the next 12 months but will need new capital to sustain long-term operations.