Mindset Pharma leading the charge to advance psychedelic medicines to treat mental illness

One in four people in the world will be affected by mental or neurological disorders in lifetime Focused on the medical psychedelic market Market needs a source of high quality and low-cost psilocybin What Mindset Pharma does:  Mindset Pharma Inc (CSE:MSET) (OTCQB:MSSTF) (FRA:9DF) describes itself as a biotech company that aims to discover and develop the 'next generation of psychedelic medications and related technologies to treat mental illness. Existing treatments for conditions like depression and angst are not always effective and there has been little innovation in the space for years. But now, there is growing evidence that existing classes of psychedelic drugs like MDMA (ecstasy) and psilocybin (magic mushrooms) can work well. And there is little doubt this is a sizeable market. In 2018, according to Mindset, 37.1 million US adults received mental health treatment, while 20% of adults in the US, as of 2017, had been diagnosed with depression. The psychedelic drug development industry is in its infancy due to previous regulatory restrictions but now scientists are increasingly investigating the molecules within these substances. Toronto-based Mindset is developing its intellectual property (IP) in the two areas it believes are going to be the most valuable, namely, next-generation drugs and processes that can produce them at the lowest possible cost. The company has three patent-pending psilocybin-inspired drug families (named 1,2,3) and a fourth inspired by N,N-Dimethyltryptamine (DMT), a chemical substance that occurs in many plants and animals, and another type of psychedelic called 5-MeO-DMT. The company says it now has over 75 compounds synthesized. Pre-clinical data has shown promising results. Based on data derived from Mindset's in-vivo (animal) testing program, the majority of its patent-pending compounds across four families of chemical scaffolds showed "favourable" effects in-vivo in models established as having a high correlation to psychedelic effects in humans. The company has also developed a patent-pending synthesis process, which can produce psilocybin and Mindset’s own drugs efficiently and at a low cost. It has filed three final and two provisional compositions of matter patents and hired a Canadian contract development and manufacturing organization (CDMO) for additional synthesis, testing, and GMP psilocybin projects. How is it doing: On June 3, 2021, Mindset posted material news as it revealed that it had now selected its lead clinical candidate MSP-1014 to be the first one to move forward into current good manufacturing practice (cGMP) compliant manufacturing and investigational new drug (IND) - enabling studies. MSP-1014 is a psilocybin-inspired compound from the company's Family 1 of novel, patent-pending psychedelic compounds and was chosen following a comprehensive range of specialized in-vitro and in-vivo tests on its patent-pending compounds. Mindset said it was excited to enter the final pre-clinical development step before beginning first-in-human clinical trials. It noted that MSP-1014 had demonstrated "superior preclinical characteristics" in a head-to-head comparison with psilocybin and its active metabolite psilocin, including increased safety and efficacy, which the company believes will potentially result in lower clinical doses. Mindset expects that MSP-1014 has the potential to be a first-in-class psychedelic drug candidate, which could treat mood disorders, including major depressive disorder, substance misuse disorders and end-of-life angst associated with terminal illnesses, including cancer. The company also noted that it intends to further develop candidates from Mindset Families 2 to 4 with the goal of selecting additional lead candidates in the near future. And on April 29, the company also announced that "certain" of its Mindset's Family 4 compounds, which are inspired by DMT & 5-MeO-DMT, were exhibiting positive in-vitro screening characteristics. These results are highly promising, said the company, adding that it will continue to evaluate and advance its Family 4 compounds, both in-vitro and in-vivo, alongside several promising compounds from its other novel compound families. Inflection points: Start of next steps for candidate MSP-1014 Start of human trials More pre-clinical research data Selection of additional lead compounds What the broker says:  On June 28, Maxim Group initiated coverage of Mindset with a "Buy" rating and a 12-month price target of US$1. Maxim noted that the company is building out next-generation psychedelics with four families of compounds including psilocybin and DMT/5-MeO-DMT analogues as well as a fifth family platform technology for improving psychedelic drugs. “Family 1 compounds are the closest to psilocybin, and therefore are likely to have the shortest path to market,” Maxim said, adding that the company’s first drug candidate MSP-1014 is advancing into Investigational New Drug-enabling studies.  “Families 2-4 are more purpose-designed. Family 2 and Family 4 compounds are likely considerably shorter acting compared to psilocybin, making them more scalable for a macrodose setting,” the firm said. “Family 3 is the opposite, longer acting for microdosing, which is more analogous to traditional pharmaceuticals.” Maxim also pointed out that Mindset has its own proprietary chemical synthesis method for psilocybin and its own compounds, and has a contract development and manufacturing organization (CDMO) to produce 1 kilogram (kg) of psilocybin by fiscal year 2021. It said MSP-1014 is easier and cheaper to manufacture than psilocybin. “Mindset is differentiated in psychedelics with a fully novel compound strategy, addressing the IP concerns central to the space,” the firm said. “MSP-1014 likely has a relatively short path through development, and nextgen purpose designed compounds have the potential to be best-in-class in the longer term.” Mindset’s stock recently traded at C$0.47 in Toronto and at US$0.35 in New York.  What the boss says: Speaking to Proactive in June this year, following the news the company had selected MSP-1014 as its lead clinical candidate, Mindset Chief Scientific Officer Joseph Araujo said he anticipates being ready for the clinic with this compound by the second quarter of 2022. "We will be moving into IND enabling studies, which include a series of safety, toxicology studies that are more prescribed before one can go into the human clinical trials. We'll also be initiating chemistry, manufacturing and control (CMC) manufacturing, so once again, pharma-grade product, and in the interim, we will also be exploring additional avenues to better understand these compounds and to better understand how to dose them for different indications using animal models," he said. Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham