The cofounders of Toronto-based Field Trip Health. From left to right: Mujeeb Jafferi, Hannan Fleiman, Ryan Yermus, Joseph del Moral, and Ronan Levy.

Welcome to the era of psychedelic stocks. Toronto-based Field Trip Health became the third psychedelic therapy and drug development company to hit the public markets on Tuesday.

Field Trip went public through a direct listing on the Canadian Securities Exchange after it completed a reverse takeover of oil and gas company Newton Energy Corporation.

Ronan Levy, a cofounder and the executive chairman of Field Trip, says psychedelic drugs, which are currently illegal under federal law but show promise in clinical mental health studies, will become the next blockbuster pharmaceutical products.

As you look at psychedelics, these molecules stand poised to fundamentally revolutionize how we consider mental, emotional and behavioral health, says Levy.

Before going public, Field Trip closed a $12 million private placement deal, which brought the total amount it has raised since founding to $20 million. On Tuesday, the stock opened at 3.50 Canadian Dollars and closed at 2.70 Canadian Dollars. After the first day of trading, Field Trips market cap was $102 million.

MindMed, a psychedelic drug development company based in New York, was the first company of its kind to test the public markets in March on Canadas NEO Exchange and the Peter Thiel-backed Compass Pathways, which is pursuing FDA approval for its synthetic version of psilocybin, went public on the Nasdaq in September. Compass Pathways has a market cap of $1.37 billion, while MindMed is approaching $200 million.

Field Trip, which is not profitable and incurred a net loss of $2 million, has a three-pronged approach to the psychedelics markettreatment clinics, drug development, and drug manufacturing.

The company currently operates three ketamine-assisted psychotherapy clinics in Toronto, Los Angeles, and New York. Field Trip plans to scale up to 75 clinics in the next few years, says Levy.

Tripping In Style: Patients receive intramuscular ketamine injections at Field Trip Health's high-end clinics in Los Angeles and New York. Patients are given ketamine lozenges in Toronto.

Patients receiveketamine, a dissociative psychedelic approved by the FDA as a fast-acting anesthetic, at Field Trips clinics off-label to treat anxiety and depression. Ketamine is the only legal psychedelic drug at this moment. The FDA approved Johnson & Johnsonsketamine-derived nasal spray Spravato for suicidal ideation and treatment-resistant depression last year, but Field Trip sells intramuscular ketamine injections in the U.S., which produces a more intense psychedelic experience. (A program of six ketamine injections and 11 therapy sessions costs nearly $5,000. In Canada, the therapy involves ketamine lozenges.)

Field Trips big plan is bring its own hallucinogenic compound to market. Its developing its own novel psychedelic molecule, FT-104, and plans to pursue FDA approval. Field Trip is being tight-lipped about which mental disorder FT-104 will target, but the compound does engage the serotonin 5HT2A receptor in the brain, which is believed to be responsible for psychedelic experiences.

Levy says FT-104 is similar to the chemical structures of known psychedelic substances like psilocybin. Field Trip filed a provisional patent and the company hopes to launch clinical trials by the end of 2021.

The third strategy Field Trip is pursuing is psilocybin cultivation. It partnered with the University of the West Indies in Mona, Jamaica, where psilocybin is legal, to build a magic mushroom research and cultivation facility.

For the time being, Field Trips clinics only offer ketamine-assisted psychotherapy. Eventually, as certain compounds gain FDA approval or become legal through state initiatives, Levy says the companys clinics will expand to other psychedelic therapies. (In Oregon, psilocybin could be legalized for therapeutic use through a ballot measure in November.)

Youll see a robust suite of psychedelic molecules available to people, whether its MDMA, psilocybin, DMT, peyote, or synthetic molecules like FT-104, all of these will be incorporated into our system, says Levy. Through our clinical hubs, well be agnostic as to which molecules we use as long as they lead to the best outcomes for patients.

Field Trip was founded by Levy, Joseph del Moral, Hannan Fleiman, Ryan Yermus and Mujeeb Jafferi in April 2019. All of the cofounders except for Jafferi worked together previously in Canadas cannabis industry, where they cofounded medical marijuana companies Canadian Cannabis Clinics and CanvasRx, the later of which was acquired by Aurora Cannabis for $37 million in 2016.

Dieter Weinand, former head of Bayers pharmaceutical division, has joined Field Trip as a member of the board. Over a 30-year career, Weinand worked at Sanofi, Otzuka and Pfizer. Weinand helped bring to market drugs like Liptor and Abilify, which is used to treat schizophrenia, depression and bipolar disorder. Weinand says hes been convinced by the studies coming out of academic institutions including Johns Hopkins and Imperial College London that psychedelic drugs have significant potential in treating mental health disorders.

When you look at people who have major depression or schizophrenia, each time they have an episode there are structural and chemical changes in the brain that become permanent, says Weinand. That has to be reversed somehow and we have nothing right now that changes that. There seems to be clinical evidence that psychedelics can intervene in that progression and potentially reverse these structural changes over time.

Nearly 30% of people with major depression dont respond to current medications, says Weinand. A drug that could help this patient population could be quite significant, he says.

The psychedelic renaissance underway is creating an industry worth around $100 billion, according to a report written by Canaccord Genuity Corp. analyst Tania Gonsalves. From depression to post-traumatic stress disorder, addiction tochronic pain, about one billion people are afflicted by disorders that studies have found could be treated by psychedelic-assisted therapy.

The legal cannabis market, which is expected to hit $19 billion in annual sales this year, has nothing on the hallucinogenic drugs, says Levy.

Psychedelics as an industry is much larger and more significant than cannabis, he says. The way to frame the psychedelic industry is what chunk of the $240 billion U.S. mental health market are psychedelics going to take? I think itll be most of it.

Link:

Field Trip Health, Another Psychedelic Therapy Company, Goes Public - Forbes