A psychedelics-drug startup is hoping it can take public
market investors on a trip.
Mind Medicine, a psychedelics-based medicine startup, raised
$24.2 million in funding from investors including Bail Capital, Cannell
Capital, and Grey House Partners. Additional investors include Toms Shoes
founder Blake Mycoskie and Shark Tank’s Kevin O’Leary.
The company plans to go public on the Toronto-based NEO
Exchange on March 3, and list directly through a reverse takeover of Broadway
Gold Mining. MindMed claims it will be the first psychedelic pharmaceutical
company to be listed on a public stock exchange.
MindMed develops something that its co-founder JR Rahn hopes
will become the “antibiotic for addiction.” It’s based on a non-hallucinogenic
derivative of ibogaine, a psychoactive compound that has been used for more
than 50 years to treat addiction. Ibogaine treatment centers exist outside of
the United States, but the substance has been illegal in the country for more
than 50 years, according
to The Wall Street Journal.
Kevin O’Leary told the WSJ that he agreed to back the
company as Rahn vowed to focus only on medicinal use. “If this can actually
cure opioid addiction, that is a big, big opportunity,” O’Leary told
The Journal. “Why wouldn’t I want a piece of that?”
Wow, curing opioid addiction! That’s a lofty goal. With all
due respect to Rahn and O’Leary, I’m always skeptical of companies with such
Last week, Fortune
published a fascinating deep dive on why investors are fueling a
psychedelics movement. Financiers from Wall Street to Silicon Valley see
psychedelic drugs as a potential elixir for all sorts of psychiatric
afflictions, including OCD and PTSD, opioid addiction, alcoholism, eating
disorders, cluster headaches, and suicidal ideation.
When I shared the article with the readers of my weekly newsletter The Profile,
one person raised an important point about psychedelics: “The problem is
that mass production will try to blanket every case with it. That’s where we
run into issues of people getting addicted to them (for a brain truly
unbalanced the drugs provide relief, but for someone not in that severe a
state, then can do more harm than good).”
While MindMed may be responsible with the drug, what about
the rest of the industry? A lot of questions remain unanswered as psychedelics
are still a nascent industry. Private investors have an appetite for
psychedelic-drug companies, but I’m very curious to see how the public market
investor receives it.