The Market for Psychedelics is Going Legit

This is being republished from Crain Chicago and was written by Jon Asplund.

Psychedelics are going legitimate, looking to trade a reputation as illicit, illegal party drugs for legal, approved treatments for medical problems like depression, anxiety, post-traumatic stress disorder and traumatic brain injury.

At the vanguard is ketamine. Patients are piling into a host of ketamine clinics, including Toronto-based Field Trip Health (OTC: FTRP) and Chicago-based Wesana Health. The drug is taking its place alongside marijuana as once-illegal markets that are now growing industries. Other psychedelics and psychoactive compounds are waiting in the wings.

Wesana was co-founded by former Chicago Blackhawk Daniel Carcillo, who turned to psychedelics for relief after retiring from hockey at age 30 with concussion-related traumatic brain injury. Wesana went public on the Canadian Stock Exchange in May 2021, with headquarters in both Toronto and Chicago.

Field Trip was founded in April 2019, went public on the Canadian Securities Exchange in October 2020, and began Nasdaq trading in July 2021. It has between 100 and 200 employees and operates clinics in eight U.S. cities, as well as three cities in Canada and in the Netherlands, the company said in a statement.

Carcillo has drawn attention for use of traditional psychedelics, such as psilocybin, commonly known as magic mushrooms, but the biggest piece of business today is ketamine.

Ketamine has been used illegally for its hallucinogenic high and has been long approved by the U.S. Food & Drug Administration as an intravenous anesthetic.

In 2019, the FDA approved Janssen Pharmaceuticals’ ketamine analog, esketamine. A nasal spray, under the brand name Spravato, esketamine is tightly regulated by the FDA to require a specific strategy, used on patients with treatment-resistant depression, with little room for variation, said Dr. John Zajecka, a Rush University professor of psychiatry and director of the Woman’s Board Depression Treatment Research Center.

Zajecka said the off-label, intravenous use of ketamine in clinics preceded the FDA-approved nasal spray.

The prospects for psychedelic therapies, from ketamine to psilocybin to MDMA, the drug known as molly, drew Florida attorney and certified public accountant Dustin Robinson to investing in the cannabis industry. As co-founder of Iter Investments, with 15 companies in its portfolio, Robinson said he was struck by the psychedelic space’s reliance on science, including the prospect of FDA approval.

Psychedelics “will grow by being available throughout the country and around the world, not through a patchwork of state laws like with marijuana.”

In the meantime, for Wesana Health, ketamine is something of a means to an end. Wesana’s two area clinics, in Oak Brook and downtown Chicago, saw dramatic growth since being purchased in September. The clinics logged a 40% increase in new patients and a 29% increase in new appointments between the third and fourth quarters of 2021, the company said in a statement.

It has also announced plans to open a 3,100-square-foot clinic in Naperville in the coming months. The clinic will offer ketamine infusions; the nasal-spray form of ketamine, Spravato; plus insurance-reimbursable services, such as general psychiatric care, individual psychotherapy, neurocognitive testing and addiction medicine, the company said in a statement.

“These are not ketamine mills,” Carcillo said. “We do things correctly. I don’t even like to be called a psychedelic company.”

At Field Trip Health’s Chicago location in River North, patients see a nurse practitioner and therapist, go through one or two prep sessions before ketamine sessions and see therapists afterward to help sustain positive behavior changes realized by the ketamine trip, said Matt Emmer, vice president of health care practice at Field Trip Health.

“You can have illuminating sessions (with ketamine), but it is the therapy that helps create sustainable change,” he says.

Field Trip Chicago, open for almost a year, has provided “several hundred sessions” to patients who have treatment-resistant depression, severe anxiety and often post-traumatic stress disorder, says Anya Ravitz, a Field Trip psychotherapist.

“In the middle of a pandemic, with the general state of the world, trauma is just more attenuated. I’ve seen ketamine therapy be so helpful for almost all our clients. It moves people past that place of ‘stuckness’ and takes them beyond an ordinary state of consciousness. Talk therapy can take you there, too, but it takes a long time,” she said.

Field Trip’s treatment is the ketamine-through-intramuscular-injection route. The company said in a statement that its doses are “significantly lower than what has been safely used in anesthesia for decades.”

Zajecka said that, like the Spravato model, “what’s going to have to happen with these other treatments is there’s going to need to be guidance of what will be the standards of care. We need to stay focused on where the empirical evidence takes us.”

Nevertheless, ketamine therapies—specifically, Spravato—have been “kind of groundbreaking, Zajecka said, and research into all these different compounds “has opened the door to many possibilities.”

At Rush, Zajecka’s research is moving toward a study of Spravato being used in conjunction with cognitive behavioral therapy. He said he also plans to be involved in psilocybin studies in which the drug is used in a systematic way that involves clinicians monitoring the patient’s experiences and talking through the experience afterward.

Beyond ketamine, Wesana is in the early phases of seeking FDA approval of its combination psilocybin and cannabidiol therapy drug candidate, SANA-013. The company will have a pre-Investigational New Drug meeting with the FDA on March 11 to discuss the proprietary protocol of SANA-013 for the treatment of traumatic brain injury-related major depressive disorder.

Field Trip Health is developing psychedelic therapies, beginning with a psychedelic molecule, FT-104, informally known as Isoprocin Glutarate.

“We designed FT-104 to provide a more convenient, practical and consistent experience, while retaining the characteristics of a classical serotonin psychedelic,” Joseph del Moral, Field Trip Health CEO, said in a statement. “These aspects are important therapeutic and commercial differentiators which may truly separate FT-104 from psilocybin for clinical operators and for patients seeking psychedelic psychotherapy.”

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