Entheon Biomedical Corp. (CSE: ENBI) (FSE: 1XU1) has completed its first deal of the new year with a strategic investment in Heading Health LLC, a psychiatric clinic platform focused on the administration of psychedelic-assisted therapy to treat mental health disorders.
Entheon, which itself is focused on developing psychedelic medicines to treat a wide range of addiction problems, has participated in a Series A preferred stock financing, investing $200,000 for a 5% stake in Heading Health. Entheon would also have the option to increase its overall holdings to up to 10% in the subsequent round of financing.
According to Entheon, this investment would allow the company to exposure to the ketamine-assisted therapy space, including Spravato, an FDA approved ketamine product that is eligible for insurance reimbursement. This business arrangement allows access to data pertaining to ketamine therapy and the patient experience, which will then be used for research purposes to better inform the development of Entheon’s own psychedelic therapy experience.
On Heading Health’s part, it will allow Entheon access to patient and therapy data through the use of biomarker capture devices as it pertains to ketamine therapy and the patient experience. This data will be used for research purposes to better inform the development of Entheon’s own psychedelic therapy experience. In addition, Heading Health management and psychiatric team have extensive experience in administering and overseeing patient therapies. This experience will be utilized by Entheon management in the development of their own DMT-therapy for addiction, and to better inform Entheon’s clinical approach and patient experience.
Drug Addiction Treatment
It is well documented that drug addiction is a lingering social issue that has plagued society for decades and even centuries. In the US, this problem has escalated into a crisis, which saw more than 750,000 people die from a drug overdose over a span of 20 years.
Aside from the death tolls, the social impact of drug abuse is unspeakable; not only are millions of families torn to pieces, economically the costs associated with addictions of various forms add up to billions of dollars per year. Moreover, these treatments have extremely low efficacy rates (mostly under 10%), which is far from ideal.
Thus, there is a massive gap in terms of how drug treatments are administered, representing a market opportunity worth some $16 billion per year. Looking ahead, the psychedelic drugs market in North America alone is projected to grow at a CAGR of 16.3% over the next eight years to reach $6.85 billion by 2027, according to Data Bridge Market Research.
“To take that on, we felt it like it was its responsibility to provide new options for people who were previously untaken care of by some of the earlier available treatment options,” Entheon CEO Timothy Ko said in a recent interview with Ahead of the Herd.
The company believes the key to having effective, one-time treatments is to address the source of addiction problems. Since addiction is understood to be a complex network of psychological and emotional issues that exist within a person, it is often difficult to do so. While current options sometimes try to get to the core of these issues through medications and psychiatry, these have been largely ineffective as substance abuse remains a big problem in our society.
As such, Entheon decided to be more innovative, and through scientific and anecdotal evidence, derived the product that it wants to use: continuous infusion DMT, housed within a supportive psychotherapeutic framework.
According to Ko, psychedelics can create “powerful, insightful and profound experiences” within patients, and molecules such as DMT help to achieve that. Importantly, they can directly affect substance disorder related outcomes, as demonstrated by millennia of psychedelic use by indigenous cultures to treat “diseases of despair”.
Ko adds that it’s the job of Entheon and the research community to find out how to properly administer this class of drugs to help individuals achieve that “state of internal reformation”, which will hopefully elicit a change of behavior.
With its latest investment, Entheon is now looking at one possibility of optimizing the therapeutic benefits of psychedelics using one of the most popular anesthetic drugs: ketamine. Currently, ketamine is the only legal psychedelic medicine available to mental health providers.
Over recent years, ketamine has seen growing use in therapeutic contexts, especially as a potential treatment option for depression, anxiety, PTSD and trauma. While it hasn’t gotten as much attention as other high-profile psychedelic drugs like MDMA and psilocybin, it has been used as an adjunct to psychotherapy for nearly 20 years.
With the FDA’s approval of esketamine (a filtered ketamine product) for refractory depression in 2019, the efficacy of a ketamine product for psychiatric indication has been established, leading to the burgeoning field of therapeutic ketamine today.
According to psychiatrists at the Harvard Medical School, at low doses, ketamine can rapidly reduce suicidality (life-threatening thoughts and acts) and relieve other serious symptoms of depression. It also can be effective for treating depression combined with anxiety.
“The opportunity to access and analyze data as it relates to a patient’s ketamine-assisted therapy process is an exciting prospect, with the potential to inform the successful development of Entheon’s own DMT-assisted treatment program, while also providing insight as to how the psychedelic-assisted therapy model, in general, can be optimized toward positive patient outcomes,” said Entheon chief executive Timothy Ko.
Wonder Scientific Investment
The investment in Heading Health is not the only significant deal Entheon has completed recently. In early December, the company made its first move as a public company with a strategic investment in Wonder Scientific Inc.
Wonder Scientific is a team of university researchers and product development experts who create custom, naturally derived, active pharmaceutical ingredients (APIs) for both clinical and commercial uses of psychedelics.
As Entheon’s first investment, the Wonder Scientific deal provides exposure in other verticals of the psychedelic therapy space, as well as access to psychoactive pharmaceutical ingredients as it continues to develop therapeutic treatments for addiction, the company said.
It will also provide opportunities for additional revenues from the company’s line of genetics, bio-stimulants and pharmaceuticals, CEO Ko said in a press release.
DMT Supply Agreement
In the same month, Entheon also entered a drug supply agreement with Psygen Labs Inc., a GMP-compliant manufacturer of pharmaceutical-grade psychedelic drug products for clinical research and therapeutic applications.
Psygen is the first manufacturer of restricted psychedelic drug products licensed by Health Canada. Psygen is currently in the process of building a brand new drug-manufacturing facility, and is licensed to manufacture psilocybin, MDMA, LSD, DMT, mescaline and 2C-B, all of which are compliant with domestic and international regulations and meet strict drug approval protocols.
Under their agreement, Psygen will supply Entheon with both non-GMP and GMP quality N,N-dimethyltryptamine drug substances (DMT) for upcoming formulation, preclinical, clinical and post-approval commercialization phases under the European Medicines Agency (EMA) regulatory framework.
DMT Clinical Study
In late November, Psygen successfully completed the production of a non-GMP DMT research batch for delivery to the Contract Research Organization (CRO), CHDR’s (Centre for Human Drug Research) partner pharmacy, which Entheon has contracted to conduct an early-phase human clinical trial with DMT.
Specifically, CHDR will carry out a study to evaluate the pharmacodynamics, pharmacokinetics and safety of a target-controlled intravenous infusion of N,N-dimethyltryptamine (DMT) in humans. CHDR is an independent institute based in Leiden, Netherlands, that specializes in innovative early-stage clinical drug research.
The non-GMP DMT research batch will be shipped to CHDR upon receipt of Psygen’s export permit from Health Canada’s Office of Controlled Substances.
Commenting on this data-intensive study with DMT in humans, CHDR research director of psychiatry Gabriel Jacobs stated:
“Characterization of both its functional central nervous system effects and its impact on subjective experience, and to relate these to its pharmacokinetics, is crucial to properly understand DMT’s potential as pharmacotherapeutic.”
It is expected that the clinical trials will begin in late-summer of 2021.
As one of the first companies to recognize the serious lack of substance abuse treatment options on the market, Entheon has embarked on a path to develop its own psychedelic products designed to address these health problems at the very core.
The latest investment and supply agreements are just the beginning of this journey, setting up Entheon and its CRO partner for a series of trials this year that could hopefully lead to exciting breakthroughs in a blossoming field of drug therapy.
The promise of Entheon and its proposed DMT product has also received investor support, as the company recently closed a private placement of units for proceeds of $3.17 million, which would go towards the upcoming clinical trials.
With this funding secured, there will surely be more movements coming from Entheon this year.
Entheon Biomedical Corp.
Shares Outstanding 40,766,648
Market cap Cdn$39.1m
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