This episode of The Cannabis Investing Podcast features host Rena Sherbel interviewing Jason Najam, a journalist and former managing editor at Microdose who now writes for Seeking Alpha. Najam provides expert analysis on the investment landscape for publicly traded psychedelic medicine companies. The conversation centers on the recent FDA rejection of Lycos Therapeutics' MDMA-assisted therapy for PTSD and its implications for the sector.
Lycos, formerly the nonprofit MAPS, had been developing this therapy with the FDA since the 1980s. An FDA advisory panel voted 10-1 against approval in June, citing issues like functional unblinding in trials and safety concerns, ultimately leading to a request for a new Phase 3 trial. This rejection has reshaped the race, putting companies like MindMed, Compass Pathways, and Cybin in competition to be first to market. These leading firms are all well-funded, with over $200 million in cash each, and have received FDA Breakthrough Therapy designation for their programs. MindMed is advancing an LSD-based therapy for anxiety, Compass Pathways is studying psilocybin for treatment-resistant depression, and Cybin is developing a shorter-acting, deuterated form of psilocybin.
A surprising insight is that the Lycos rejection may serve as a learning opportunity, with Cybin already announcing a Phase 3 trial design that explicitly addresses the functional unblinding issue. The episode clarifies that unlike Lycos's model, which bundled therapy with the drug, most other companies are seeking approval for the drug compound alone, potentially simplifying the regulatory path. Najam argues that institutional investment is slowly growing, with firms like BlackRock and Vanguard increasing stakes, and cultural stigma continues to diminish steadily. He notes that MindMed's strong Phase 2B results showed 50% of patients in remission at 12 weeks, a key data point for investors.
The tone is analytical and educational, focusing on clinical and financial specifics for investors. The style is a direct interview between a knowledgeable host and a sector expert, avoiding hype in favor of measured commentary on trial timelines and cash runways. This episode is ideal for biotech investors or those following psychedelic medicine who want a clear-eyed assessment of regulatory hurdles and company pipelines post-FDA setback. Listeners seeking quick trading tips or entertainment-focused content should skip this detailed, fundamentals-driven discussion.
