Psychedelic Bulletin: COMPASS Pathways’ 4th Patent; MagicMed to Be Acquired; MindMed Insider Selling

Psychedelic Bulletin: COMPASS Pathways’ 4th Patent; MagicMed to Be Acquired; MindMed Insider Selling

Intellectual Property was once again at the heart of news stories across the psychedelic sector this week. At the top of the week, we learned that MagicMed (a company with a primary focus on building a library of IP pertaining to psychedelics) is to be acquired by Nasdaq-listed Enveric Biosciences. However, the announcement was not met with a great deal of fanfare, and Enveric’s stock price continued to tumble after the announcement.

Elsewhere, COMPASS Pathways co-founder and president Lars Wilde fielded questions on his company’s IP and commercial strategy at a debate hosted by Oxford Psychedelic Society on Thursday. Aside from distancing COMPASS from Christian Angermayer’s comments on IP (for example, those found in a leaked email), Lars Wilde made a notable contribution to the public record, stating that COMPASS will never “enforce anything related to set and setting.” 

Shortly after the debate concluded, we learned that COMPASS Pathways is set to receive its fourth granted U.S. patent, which claims a solid form of psilocybin called Hydrate A. More on both of these topics below.

Below, we also touch on some recent selling activity by MindMed insiders and finish with a bite-sized Weekend Reading section.

Psychedelic Sector News

COMPASS Pathways’ Fourth Patent Claiming ‘Hydrate A’

This week, a new COMPASS Pathways patent application published. Filed February 10th as part of the USPTO’s “Track One” program, it received prioritized examination, and was allowed on April 5th—less than two months after filing, and 52 days before it was published. COMPASS’ application was allowed without a single rejection, after the examiner found “the closest prior art of record” states that psilocybin “forms solvates” but “nothing indicates polymorphism.”

Besides greatly accelerating examination time (the average standard application pendency is almost two years), Track One is often used as a strategy to shield a patent application from third party prior art submissions, because examination may already be complete by the time an application is made public. COMPASS’ previous two issued applications were also filed under Track One. 

This new application will become COMPASS’ fourth granted U.S. patent. Unlike the first three U.S. patents, which are all to COMPASS’ “COMP360” Polymorph A, this patent claims a different solid form, called Hydrate A. “Hydrates” are crystalline forms that also contain water molecules within their structure.

COMPASS’ Polymorph A and Hydrate A are characterized and claimed by different X-ray powder diffraction (XRPD) peaks. All four COMPASS patents draw priority from the same initial application, and share a single written description that also discloses two additional solid forms, Polymorph A’ (“A prime”) and Polymorph B.  Our editor-at-large Graham Pechenik initially covered COMPASS’ new application on Twitter.

COMPASS Co-founder: “we’re not going to enforce anything related to set and setting.”

In other COMPASS-related news, president, chief business officer, and co‑founder Lars Christian Wilde participated in a moderated Q&A on Thursday with Alexander Beiner, co-director of the Breaking Conventions conference and co-founder of Rebel Wisdom.

Hosted by the Oxford Psychedelic Society, the Q&A focused on three main topics regarding psychedelic capitalism: 1) ethics: should psychedelic therapy be a for-profit enterprise? 2) feasibility: how will psychedelic therapy be distributed? and 3) accessibility: how to ensure that people in need of psychedelic therapy receive it? 

Notably, when asked about COMPASS’ claims on the basic components of psychedelic therapy (in the PCT application discussed by Shayla Love in VICE), Lars Wilde had the following to say.
“I want to make that public on the record here: we’re not going to enforce anything related to set and setting. This is in the public domain. It will never be enforced.”
Some may question whether such statements can be binding upon a company, but scholars have noted that informal statements may form binding commitments, for instance under a theory of “equitable estoppel,” as our editor-at-large observed on Twitter.
 
In any event, COMPASS will have an opportunity to amend its claims when its application enters national prosecution later this year, so we will be able to watch whether these therapy claims continue to be pursued.
 
 

MagicMed to Be Acquired by Nasdaq-Listed Company

Calgary-based MagicMed, which is “focused on assembling a portfolio of intellectual property” relating to psychedelic derivatives, has inked an amalgamation agreement with medical CBD biotech Enveric Biosciences (NASDAQ: ENVB). MagicMed will be acquired by the listed company via an all-stock transaction, expected to close in the second half of 2021.

Upon closing of the transaction, MagicMed’s CEO Dr. Joseph Tucker would be appointed CEO of Enveric Biosciences; Enveric’s current CEO, David Johnson, will become Executive Chairman.

Despite MagicMed representatives claiming that this would make them the third Nasdaq listed company, Psilocybin Alpha expects Atai Life Sciences to list on the exchange well in advance of this proposed transaction. In addition, MagicMed is not ‘listing’ on the Nasdaq in the conventional sense of the phrase. Rather, it is amalgamating with a Nasdaq-listed company, of which it will hold approximately 37% ownership in following the close of the transaction.

This news comes nearly six months after MagicMed closed its last (and only) major financing in which the company raised $8.1m and stated its intent to list on the CSE; reserving the ticker symbol MGIC. The company has been largely silent on its go-public plans since.

It is important to note that not one of MagicMed’s patent applications has yet been published, let alone granted. Indeed, it appears to have only filed its first psychedelic derivative patent application in the summer of 2020, according to the related press release.

MagicMed is a relatively small company and as such has not received a great deal of media attention, despite healthy marketing spend (projections of which were broadly equal to its R&D spend, according to a preliminary prospectus filed in February). Given the patent debate within the space, some will undoubtedly be critical of the company’s IP strategy. Others have questioned the rigor of the company’s patents and their priority dates.

According to its website, “Enveric Biosciences is a patient-first biotechnology company developing rigorously tested, novel cannabinoid medicines to improve quality of life for cancer patients.”

By Nasdaq standards, Enveric Biosciences is a penny stock, trading well below $5. With a market cap of around $58m, Enveric is on the borderline of nano- and micro-cap classifications.

Enveric is no stranger to M&A: the company gained its name after a spin-off and tender offer that took place under half a year ago. After a merger of tech firm Ameri Holdings and Jay Pharma, the combined entity was called Enveric Biosciences Inc. Enveric commenced trading on Nasdaq on December 31, 2020 under ticker symbol ENVB, after undergoing a 1-for-4 reverse split of its common stock.

ENVB opened trading at $6.88 on its first day on the Nasdaq, closing at $5.92. 4 months later, on April 30, 2021, the company was trading at $2.38, down 65%.

It closed even lower at $2.23 on Friday, 28 May.

 

MindMed Insider Selling: JR Rahn and Bruce Linton Partially Cash Out

MindMed’s trio of press releases this week (listed under Other Headlines below) were overshadowed by insider selling activity.

Most notably, CEO JR Rahn has sold a significant portion of his shares. According to The Deep Dive, JR Rahn’s recent transactions represent a sale of c.38% of his total position.

Psilocybin Alpha received comment from a spokesperson for the MindMed CEO, who explained that Rahn “plans to use a portion of the proceeds” to establish a foundation in his mother’s name. The foundation “will address inequities in mental healthcare for disenfranchised populations in the United States,” said the spokesperson.

Some may laud Rahn’s charitable efforts, or point to the significant holdings in MindMed that Rahn retains as well as the share-based compensation plan the company has in place. A cynic, meanwhile, might point out that foundations are sometimes employed as a tax sheltering strategy. It also remains to be seen (and may never be known) what “portion” of the proceeds of this share sale will be dedicated to the foundation.

Three days later, more insider filings emerged. It appears that Board Director Bruce Linton has disposed of around half of his shares in the company.

View insider filings for MindMed here.

 

Other Headlines

and more…

Weekend Reading

Owing to a longer Psychedelic Sector News segment this week, and the fact that this is being sent on a Sunday, the Weekend Reading segment is somewhat shortened.

Andrew Yang wants to legalize cannabis, psilocybin, MDMA for military vets to treat PTSD

While a ranked-choice voting system plus a crowded field of Democrats makes it difficult to predict the front-runner in The Big Apple’s mayoral race, Andrew Yang is certainly capturing a great deal of attention.

Yang, who earlier this year announced plans to make NYC a “Bitcoin hub” if elected, has now added the legalization of certain drugs—including MDMA and psilocybin— for veterans with PTSD.

This isn’t the first time Yang has hinted to a more lenient, or pragmatic, attitude toward psychedelics. During his time as a presidential candidate, in December 2019 Yang tweeted: 

A veteran in Davenport told me that psilocybin mushrooms were the only treatment he found effective for his depression after returning home. We should explore making psilocybin mushrooms legal for medical and therapeutic use particularly for veterans.

Mike Tyson reveals magic mushrooms ‘saved my life’ and hopes psychedelics can now change the world

A number of news outlets covered this story, with The Independent writing: “Former heavyweight champion calls psilocybin an ‘amazing medicine.'”

Tyson has partnered with Wesana Health, which is fronted by former NHL player Daniel Carcillo.

 

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