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The Next Era For Psychedelic Companies

September 1, 2023
x min read

It was a historic week for publicly traded psychedelic companies.

Seemingly out of nowhere, two important acquisitions were announced that sent shockwaves through the entire biotech space.

While it’s still early, it is becoming clear that psychedelic medicine companies are entering into a new era in which mergers and acquisitions may be pivotal to advance their novel therapeutic molecules.

What happened:

  • Cybin (NYSE: CYBN) announced they would acquire Small Pharma (TSXV: DMT) and advance their clinical trials around DMT as one entity
  • Multi billion dollar pharma company Otsuka Pharmaceutical announced they will acquire Toronto-based Mindset Pharma for $80 million (CAD) in an all cash deal

Why it matters:

  • This is one of the first times big pharma has gotten directly involved with an early stage psychedelic company, which many have considered to be an inevitable outcome
  • Cybin and Small Pharma have both been pursuing DMT clinical trials, so the new acquisition will create one of the most robust clinical trial pipelines globally around DMT

Yes, but:

  • DMT has shown a lot of therapeutic promise in anecdotal and pre clinical research, but is yet to go through the rigorous FDA clinical trial process and is much less understood than psilocybin or MDMA
  • Otsuka Pharmaceutical is acquiring Mindset Pharma largely for their Phase II trial around Major Depressive Disorder, so there is still a long road ahead to get to FDA approval

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