Lykos’ near-unanimous rejection from an FDA advisory panel earlier this month jolted a psychedelics industry that seemed to be finally hitting its stride. But the race to market is far from over.
“Our phones have been ringing off the hook since [Lykos’] adcomm, with entities who maybe were less familiar with us but who [now] understand our research more and understand the point of the scalability,” Delix Therapeutics CEO Mark Rus said.
Mark RusResearchers and academics spent decades working to legitimize psychedelics’ therapeutic potential for illnesses — Lykos opened its first IND in 2001, when it was known as MAPS — and the advisory committee meeting marked a major milestone on the road to approval.
But sustained interest in the wider class seemed imperiled after Lykos’ failures were surgically dissected and advisors voted 11 to 1 against the risk-benefit profile of the company’s MDMA-assisted therapy for post-traumatic stress disorder.
Delix, which bills itself as a third-generation neuroplastogen biotech, joins the ranks of Transcend Therapeutics, Compass Pathways, Cybin and others in developing psychedelic (or adjacent) drugs for psychiatric conditions in desperate need of new treatment options. Virtually every psychedelic-related drug collaboration has been struck since 2019, with more than 45 now in total.
All eyes have turned to Compass, which is next in the race to market with its Phase 3 asset for treatment-resistant depression based on psilocybin, which is found in magic mushrooms.
The London-based company was co-founded by George Goldsmith and Ekaterina Malievskaia in 2016 and ascended in 2020 as a closely-watched competitor to Lykos, raising an $80 million Series B followed by a $146.6 million IPO less than six months later. Both Goldsmith and Malievskaia resigned from the board in March, unofficially handing the full reins to Kabir Nath, who took over as CEO in August 2022.
Compass has a more “buttoned-up” approach to clinical development than Lykos, so it could have a better shot at success, said Ritu Baral, managing director of biotechnology at TD Cowen. But Wall Street opinion is mixed, with Jefferies’ Andrew Tsai stating the psychedelics space “might be pressured for at least a year-plus” after the Lykos setback.
Earlier-phase companies like Delix, meanwhile, are targeting shorter treatment duration with an eye to smoother rollout. Some of these assets could have no dissociative effects at all and could be taken at home, which would change the way psychedelics are administered entirely.
Robust safety data are key
One of the FDA panel’s core issues with Lykos’ BLA in PTSD was that the San Jose, CA-based company didn’t collect abuse-related adverse events in its Phase 3 studies if the events were considered “positive, favorable or neutral,” even though the FDA advised as far back as March 2017 that it should.
Such alignment is even more critical for psychedelic developers and their relatives, given that many of the first-generation candidates remain Schedule 1 drugs in the US, meaning they have no formal medical use and are deemed to have a high abuse potential.
Lykos said in an email that it thought adverse events meant negative experiences only, but has since changed its protocols to make sure positive experiences are also recorded. The company is awaiting an Aug. 11 PDUFA date for MDMA-assisted therapy.
“I wouldn’t be surprised if companies learned from this outcome and started doing a distinct abuse liability study, just to reassure the FDA in the future,” Tsai said.
Jerry Rosenbaum, director of the Center for the Neuroscience of Psychedelics at Massachusetts General Hospital, told Endpoints in an email that there’s already a lot of understanding about the risks of psychedelics, however. Addiction and craving generally aren’t features of the drug class, unlike opiates and sedative hypnotics, he added.
There’s also a major unmet need in PTSD, which hasn’t seen new approvals in almost 25 years. PTSD affects an estimated 3.9% of the world’s population. Following the Covid-19 pandemic, researchers have found rates of the condition increasing in young people in the US, with the cumulative prevalence more than doubling from 2017 to 2022 to 7.5%.
Only two selective serotonin reuptake inhibitors (SSRIs) — sertraline and paroxetine — have been approved by the FDA to treat the condition. Regulators noted that less than 20% to 30% achieve full remission and that side effects like nausea and insomnia limit tolerability.
Compass’ lead asset, COMP360, is being tested for PTSD in addition to treatment-resistant depression (TRD). The biotech said in an email it has designed its trials to include “robust monitoring of a broad range of safety risks.”
The drugmaker’s late-stage TRD work includes three studies. COMP 005 is testing a single 25 mg dose of COMP360 versus placebo, while COMP 006 is studying three doses administered twice to see if a second dose can boost the number of responders or quality of response. The third study will follow patients for the long term.
Next crop of contenders
Transcend CEO Blake Mandell, whose company is working on a psychoactive analog of MDMA, said nothing new came up in Lykos’ advisory meeting that the biotech wasn’t already conscious of.
Blake Mandell“It has reinforced to us the need to work in partnership with the FDA to design pivotal trials in the future,” he said.
Transcend is recruiting for a 79-participant Phase 1/2 trial in PTSD of its lead candidate, methylone. The drug is a synthetic substitute for MDMA and has been found to have “a faster onset and earlier disappearance of subjective effects than MDMA,” according to results of a human study of both drugs published in February 2023.
Mandell touted the experience of his team as evidence of Transcend’s preparedness, with senior staffers that have cumulatively worked on more than 10 new drug applications in their career. SVP of clinical development Amanda Jones held the same role at Axsome, overseeing the advancement and ultimately the approval of depression medication Auvelity.
The biotech closed a $40 million Series A in February 2023 round led by Alpha Wave Global and Integrated Investment Partners, enough to pay for the ongoing clinical trial. Mandell wouldn’t comment on whether the company was currently fundraising, but said he was spending more time with “healthcare-focused investors.”
Doug DrysdaleAlso active in the psilocybin niche is Canadian biotech Cybin, which is working on a deuterated analog of the hallucinogenic compound, dubbed CYB003. CEO Doug Drysdale said the feedback given during Lykos’ advisory committee meeting spurred a double- and triple-check of Cybin’s upcoming Phase 3 protocol for the asset in major depressive disorder (MDD).
The company is targeting the larger patient population of MDD to maximize the market and limit recruiting refractory patients with more lines of prior treatment.
Drysdale is confident Cybin can navigate the functional unblinding effect that Lykos contended with, describing a three-arm study of CYB003 that would include a mid-tier dose, meant to confound the patient and limit expectancy bias. The biotech also underscored that all adverse events would be tracked — both positive and negative.
Before the Lykos adcomm, mainstream biotech investors gave Cybin a vote of confidence that its sub-$1.00 a share stock price was undervalued. Deep Track Capital led a $150 million private placement closed in March that included RA Capital Management and Avidity Partners.
Shorter treatment window
Looking ahead to rollout, a lot of next-gen companies are targeting a two-hour treatment window so they can tap into the infrastructure established by Johnson & Johnson’s Spravato, Baral said.
Spravato is a ketamine-based nasal spray for people with TRD and acute suicidal ideation due to MDD. It’s given in a healthcare professional’s office with monitoring. “There are offices ‘wired’ for two hours, so everybody’s targeting two hours because it’s a done deal,” Baral added.
Going even further, Delix is developing neuroplastogen drugs that could avoid dissociative effects altogether, with treatments that could sit “on your medicine shelf,” according to Rus. The Boston-based biotech is preparing for a Phase 2b trial and could soon raise more financing after it closed a $70 million Series A in September 2021.
Most mid-to-late-stage candidates don’t meet the two-hour treatment threshold, however. Compass’ COMP360 treatment sessions lasted six to eight hours in its Phase 2b trial. As for Cybin, Drysdale said a session is expected to last between four to six hours. Transcend’s methylone candidate has an eight-hour administration time, citing FDA guidance.
The early-to-mid-stage companies have been getting more interest from large drugmakers. Ahead of the Lykos adcomm, AbbVie’s $65 million R&D partnership with Gilgamesh Pharmaceuticals in May signified a “path to legitimization” for psychedelics, Baral said. Like Delix, Gilgamesh is also focused on neuroplastogens with potential for at-home administration.
But deal interest may be tempered after the adcomm, Tsai said. However, he elaborated that it’s not that interest will drop to zero, but rather that larger companies may need to stay patient until the next major milestone. Compass’ Phase 3 readout in treatment-resistant depression is expected in the final quarter of the year.