Experts predict that one of the key focuses for investors this year will be neuroscience and cancer-focused companies, with psychedelics being a priority within the neuroscience space. The specialists project that 2024 may be another year of significant investment in studying solid tumors and psychedelic drugs after 2023 proved to be a major year for investment in psychedelics and cancer.
In addition, these researched informed BioSpace that there would be increased interest in obesity and autoimmune disorders among biopharma investors.
Psychedelics have attracted plenty of attention from the mainstream and scientific communities over the past several years, thanks to their potential mental-health benefits. A growing body of scientific literature has revealed that several psychedelics can mitigate hard-to-treat mental disorders, including post-traumatic stress disorder (PTSD), treatment-resistant depression and even eating disorders.
Although most of this research is in its infancy, findings are encouraging enough that Big Pharma and institutional investors are pouring millions of dollars into the research and development of psychedelic-based treatments for mental-health conditions. An IQVIA report notes that the $14 billion acquisition of Karina Therapeutics by Bristol Myers Squibb pushed the neuroscience space to second place in terms of merger and acquisition (M&A) activity last year.
MPM BioImpact managing partner Ansbert Gadicke is especially bullish on the medical potential of psychedelic drugs such as psilocybin (magic mushrooms), LSD and MDMA. According to Gadicke, the fact that psychedelic compounds such as psilocybin are naturally occurring has hampered the nascent psychedelic field because natural compounds do not have novelty and cannot be registered as intellectual property.
He notes that the majority of the scientific literature on psychedelic research is based on natural psychedelics such as psilocybin, the main psychoactive agent in magic mushrooms. Fortunately, companies that synthesize new molecules that can emulate the effects of psychedelics and have better properties can register the molecules as intellectual property and gain IP protection.
Gadicke adds that since psilocybin has an especially long-acting psychoactive effect (up to six hours), patients require extended supervision by trained physicians once they receive a dose. Some of the newly synthesized psychedelic compounds have shorter acting times, limiting the patient oversight needed and making psychedelic-assisted treatments more manageable.
Solid-tumor drugs are also poised to attract increased investor interest in 2024.
Oncology represented almost 50% of merger and acquisition deals in 2023 while cancer-focused companies attracted a whopping $1.4 billion out of $3 billion in early-stage investment.
Playground Global partner Ben Kim predicts continued investor interest in cancer and the general oncology space as the “markets are huge.” Cancer patient numbers in the United States are always on the rise, and there is a pressing need to treat these patients, especially those with solid tumors, he said. Next-generation therapies such as CAR-T therapies have exhibited more success in the treatment of blood-based cancers and are being approved with little pushback due to their high efficiency against hematological malignancies, Kim says.
As established psychedelics startups such as atai Life Sciences N.V. (NASDAQ: ATAI) continue to see positive results in their R&D efforts, more investment dollars are likely to flow into the industry over the coming years.
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