Psychedelic Drugs Pit Synthetic Manufacturing Against Organic

- August 6th, 2020

As the psychedelic drug market continues to accelerate, a critical debate is poised to take place in the industry.

The public capital ride for the psychedelics industry is just starting, but experts are already evaluating the best path ahead for drug development models.

The established drug development model used in the life science space is predicated on precision and efficacy thanks to manufactured products capable of offering repeatable results. However, psychedelic drugs offer users wildly different experiences, and ingesting them is not always as simple as taking a pill.

Interest in synthetic psychedelics is picking up for that reason — but it remains to be seen how much of a role fully plant-based medicines will have in comparison to synthetic psychedelics.

 

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Synthetics could be the path to Big Pharma deals

To understand the debate between synthetic and natural psychedelics, it’s important to have a concept of what makes them different. Put simply, synthetic psychedelics are manmade, while natural psychedelics are plants that are grown and consumed as they are.

As the conversation about these two options develops, one thing psychedelics industry advocates can agree on is the importance of medical-grade studies on the possible benefits of using magic mushrooms to treat mental health conditions such as depression, anxiety, substance abuse, addiction and even post-traumatic stress disorder.

These studies are acting as the bedrock for the newfound excitement surrounding shrooms, and hopes are high about the potential attached to eventual drug products born from psychedelic compounds. There has been positive engagement so far from health authorities, including the US Food and Drug Administration, in terms of the medical benefits of hallucinogenic mushrooms.

The desire to treat these different ailments with synthetic hallucinogens instead of natural substances is centered partially on the notion of attracting further attention from the pharmaceutical industry.

During a recent psychedelics-focused online panel, Maruf Raza, national director of public companies with accounting and business advisory firm MNP, said the synthetic compound model of drug development for psychedelics will make the space more attractive to pharmaceutical players, which may want take a look at the industry once it is legally responsible to do so.

Raza said synthetic psychedelic substances will dominate the medical development sector based on cost-effectiveness and consistency — a lesson in drug development he said comes from the cannabis industry and the difficulties it has seen in terms of farming.

He noted that in the lead-up to recreational cannabis legalization in Canada, some licensed producers favored scale and size in farming. But as the ways of evaluating these companies changed, more and more industry participants began to prioritize unique products over output numbers.

The main takeaway from Raza was the necessity of consistency when developing novel drug candidates — that’s something that synthetic psychedelics are ideal for compared to organic psychedelics.

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Consumers will be the ultimate test for synthetics

While it’s logical that a synthetic compound of a hallucinogenic drug would allow for best practices moving forward, one investment expert with ample experience with psychedelics isn’t sure if synthetic materials will immediately overtake organics in psychedelic therapy.

Marik Hazan, co-founder of Tabula Rasa Ventures, told the Investing News Network that while a synthetic approach will get companies far closer to acquisition deals with Big Pharma players, consumers may still drive up the conversation around whole-plant medicines.

The investment executive said he expects to see a discussion develop in the psychedelics industry around the precise efficacy of synthetic compounds versus a whole-plant approach.

Hazan didn’t dispute the validity or efficacy of synthetics compared to classic hallucinogens. “I think that synthetics are really valuable to kind of streamline (a) more pharmaceutical process,” he said. The expert also highlighted the cost-effectiveness of synthetics compared to the capital-intensive cultivation route.

But in the end, he believes research will have to back up claims and show any differences.

Additionally, Hazan said that longtime advocates of psychedelic medicines and plant-based treatments may not be as supportive of the medical approach surrounding synthetics.

“Groups that have traditionally been most closely tied to these plant medicines are kind of rejecting the more, I guess, capitalist approach to being able to bring (psychedelics) to market, which I think from our perspective and what we’re doing is important to respect,” he said. “But that’s not the case for certain investing groups in the space that are interested in it.”

Lastly, Hazan pointed to the heavily monitored legalization movement in Oregon, which is seeking an eventual vote in favor of magic mushrooms. Grassroots organizations are mounting efforts to put forth a decriminalization vote for the state later this year as part of the federal election.

These efforts have used vocabulary focused on psychedelic plant medicines — no mention of synthetics.

In the end, Hazan said the organic versus synthetic psychedelics debate will be settled by consumers — they will react to the efficacy and psychedelic effects of the two models and will naturally gravitate towards the better hallucinogenic substances.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

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