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6 Questions Investors Should Ask When Evaluating Psychedelic Biotech Companies – TechCrunch


As a business company that invests in psychedelics, we receive hundreds of proposals each month from founders developing psychedelic therapies.

Startups are developing treatments for depression by combining psilocybin with psychotherapy, creating new delivery methods, like dissolving bands and patches, and even formulating compounds that rewire neural circuits without hallucinogenic effects.

Once marginal, clandestine, illegal or simply limited to ceremonial use by indigenous cultures, psychedelics are becoming mainstream in medicinal form. Psychedelic medicine is spawning new businesses in every part of the healthcare and life sciences ecosystem, including the areas of drug discovery, manufacturing, clinics and retreats, telemedicine, and research. ‘other digital therapies, as well as consumer packaged goods.

Our fund has invested over $15 million in companies developing psychedelic therapies. We believe that psychedelic medicine and advances in digital therapy, precision psychiatry and neurotechnology will revolutionize the way mental health is treated. Unlike traditional antidepressants and pharmaceuticals, psychedelic medicine has the potential to help people address the root causes of their mental health issues rather than just the symptoms.

A landmark Johns Hopkins study found that psilocybin treatment for major depression is four times more effective than traditional antidepressants. Other benefits include their ability to promote the development of new neural pathways and increase empathy and openness, which can be beneficial states for facilitating healing.

We believe in a future where psychedelic therapy will be as common as going to the dentist, but the path will not be easy.

We believe in a future where psychedelic therapy will be as common as going to the dentist. But the path won’t be easy: Many biotech companies working with psychedelic compounds must complete multi-year clinical trials that can cost more than $100 million before obtaining FDA approval, like any other biotech company.

So how do we choose which companies to invest in? Here are six key questions we ask when evaluating psychedelic biotechnology companies:

Does the team have the skills, experience and values ​​needed to bring a product to market?

The most important factor that can make or break a psychedelic biotech company is its people. Psychedelic medicine is a multidisciplinary field, so it is important that the team has a solid foundation in psychedelics, biotechnology, neuropharmacology and/or psychiatry.

This means that in biotechnology, unlike traditional tech companies, it is rare for a prodigy founder to start a successful business given the scientific expertise and network required, which can require decades of experience.

It is also important that the team shares our values ​​regarding patient safety and well-being. We especially like teams that have a psychedelic background and are grounded in psychedelic history through academic research, fieldwork, or personal exploration. These companies will be ahead of the competition in areas such as product development, culture and recruitment.

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