Larry Rodriguez, PhD

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Patenting Psychedelics

Psychedelics are getting closer to market, and since I’ve always been interested in drug patents, I figured I’d summarize recent developments and share some thoughts that are not legal and/or investment advice. Cover art from Succession because Thiel is backing Atai, and Kendall Roy backed Vaulter.


Background news: Atai life sciences went public this summer (Nasdaq: ATAI.) It's not a pure psychedelics company per se, but half of its programs operate in the general hallucinogen space (MDMA, ibogaine, R-ketamine DMT, Salvinorin A.) IMO, the flood gates for this kind of opened when the Canadian stock exchange started listing cannabis companies a few years back. I had a few thoughts at the time, most importantly: How are they gonna maneuver IP claims? Because they're submitting a 505(b)2 for some products, which is the generics route, and means they’re relying on previous preclinical/clinical work. This is important because remember: prior art (think published studies) can invalidate a patent. If you're interested, you can read their S-1 (the form they have to submit to the SEC to be publicly traded) which discloses more of the risks to Atai’s business. Since they’ll be busy in the clinic, raising money by going public makes sense. Per S-1, “As of December 31, 2020, we had cash of $97.2 million. Subsequent to December 31, 2020, we raised an aggregate of $158.2 million in gross proceeds from the issuance and sale of our Series D common stock and received an aggregate of $12.2 million in gross proceeds from the issuance and sale of our Series C common stock pursuant to an additional closing.

Atai’s pipeline per its S-1. Clinical stage indeed.

Recently an article in Stat expanded on the IP issue with psychedelics, in which Compass Pathways (Atai funded their Series A and B) patented a crystalline form of psilosybin (“form hydrate A”; technically not in clinical trials?) which inspired this post. IP is non-trivial for companies trying to bring psychedelics to market, and its always seemed like a weird gray area. I mentioned Amarin’s drug patent woes before, and it seems like fast followers are a serious threat to nutraceuticals in general, so I’m interested to see what this will mean for psychedelics in terms of business strategy. From a regulatory science point of view, if they’re going 505b2, then what’s stopping another company from filing an ANDA after their pivotal results? (Note: FDA has a guidance on abbreviated approvals.) The answer is, typically, your drug patent, which carves out your operating space and puts a (~20 year) clock on when another company can follow on. However, the question raised in the article is whether this is more like manufacturing process embargo, since it sounds like you can’t get around producing this form of psilosybin, which is not entirely novel.

I will admit that I’m of the belief that without IP, you do not have a drug, and patenting the synthesis/purification/formulation route isn’t as strong as patenting the molecule itself. Ideally, you’d have your molecule and its derivatives patented for use in a given indication, an IND/NDA, and trade secrets in the manufacturing process holding direct competition back. IMO, nothing is un-med chem-able, and it’d be interesting to see green chemists crack the patent/reaction (an aside: check out this cool ACS Chemical Neuroscience issue), or synthetic biologists engineer a microorganism to produce psilocybin in a foundry (CB therapeutics technically filed a patent for such a fungi this last year, but there are disputes to its novelty.) Maybe I’m weird, but breaking the patent sounds like a fun synthetic biology challenge: “Make psilosybin based on the function of these known gene cassettes without actually using them” #DirectedEvolution

Another twist: competition is typically fierce in the pharmaceutical industry, but in this case, you have groups that are actively patent busting. A group dedicated to invalidating your patent is a little more than competition (look at FTO telling Compass about itself here), and it’s super interesting. In this arena, you also have the Multidisciplinary Association for Psychedelic Studies (MAPS) which has led a lot of the work in this field, and has already brought up points of contention, obviously patents but also ethics. Marks and Cohen have drafted a nice essay on the subject too.

Anyway, I’m always on team patient and hope these programs work for their intended indications. I like the idea of a public benefit corporation like MAPS leading the charge, but maybe ATAI will make major progress in getting approval. Who knows. The ketamine camp has had success in approval with Spravato (patented s-ketamine with novel delivery), but not without its share of controversy. Plus, GW Pharmaceuticals (Epidiolex®, i.e. cannabidiol) had process IP, which was acquired by Jazz Pharmaceuticals back in February. You could can argue that the strength of the filings was different, but the fact remains that it IS possible to put something like psilocybin on the market.

If you have a science background (BSc/MSC in Biochem, Pharmacology, Chemistry, Molecular Biology, etc) and you’re interested in this kind of stuff, check out the US Patent and Trademark Office’s guide on becoming a patent practitioner. If I was still a grad student, I would definitely do it. Even as a postdoc, it sounds like fun and probably has a better ROI ;) There’s a paper on the process, with interesting opinions on stuff like academic work life balance, but YMMV.