(Part four of a four-part series)
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Palo Santo's co-founder and health sciences sector expert Tim Schlidt recalls Journey Center’s “remarkable growth,” with some of the company’s operations being telehealth-oriented, especially around ketamine-assisted psychotherapy.
“I think everyone’s seen remarkable uptake from that front from a variety of players. And we’ve been very impressed by that growth. There’s always some concern about residual stigma around psychedelics, and I think that’s largely been put to rest, given that uptake, we’ve really seen that J curve turn off,” he said.
The co-founder also believes that clinician training will take off as well. In that sense, Fluence had done some great contracts in Oregon and will in other jurisdictions. “I think they will be the standard there for psychedelic training. So that’s a field where we’ll definitely see a lot more uptake.”
And, of course, psychedelics for indications beyond psychiatry. “I think we’ll see some interest, the growth there will be seen not on the PNL, but just interest, and there’s some compelling evidence already. So potentially there as well,” he stated.
Co-founder and long-time investor Daniel Goldberg added that there’s evidence for cluster headaches - a headache disorder that is rarer than migraines - in that psilocybin does seem to work as a treatment. “And that’s really exciting. There’s lots of self-experimenting psilocybin for migraine and also lots of research going on there,” Goldberg said.
“And then the addictions market, which I think is going to be one of the biggest, counterintuitive as it may sound. Of course it’s part of mental health, but it’s not really discussed –if you think of psilocybin for depression and MDMA for PTSD. It’s counterintuitive and hard for people to understand using a drug to treat a drug addiction," Goldberg said "But it’s amazing to see what’s going on with ibogaine, the research there is not discussed as much, also 5-MeO-DMT; anecdotally, in the underground, there’s a lot of people that treat addiction with that. I think that’s the next stage, but I think it’s going to be a big field.”
Another sub-category is entactogens. “There’s not much going on, and it’s exciting. I think there’s a larger market for drugs, medicines that have a more subtle and potentially take-home kind. People are always focused on larger instances, the macrodosis, the experience is a big part of it -big trips, ego dissolution.”
Entactogens provide an MDMA-like kind of experience and Goldberg believes drugs with more subtle effects will eventually become available for a wider market, replacing drugs that are potentially addictive or neurotoxic. “So that to me is very exciting in the space, there hasn’t been a lot of innovation in thirty years.”
Some Final Informal Guidance For Those Feverished With Investing
DISCLAIMER: Neither Schlidt nor Goldberg are investment advisors, so the comments below should not be taken as financial advice.
Schlidt believes that given the current market’s standpoint, it’s a good time for angels to get back in. “It did get a little bit crowded in 2021, and there were some large rounds where I think angel checks and individual investors got shoved out of syndicates. But right now, it is a nice opportunity to get in, at compelling valuations, and to get allocation in interesting deals,” he said.
But that’s one piece on the private investing front. As for the public sphere, the Palo Santo co-founder believes it will be a fruitful effort to poke around.
“I have stayed away from most Canadian opportunities, as market dynamics there can be complicated and tougher to navigate. With that said, Bright Minds DRUG does have some really compelling chemical matter, I will say. Mindset Pharma MSSTF seems to be interesting as well,” Schlidt said.
In terms of US-listed companies, atai ATAI and COMPASS CMPS are opportunities now trading well below where they're listed and have a compelling pipeline, he noted.
“Those could be interesting opportunities to get in at quite discounted valuations. And then assuming they can hit a number of catalysts, they should see an uplift. If you’re investing in a long-term investment horizon, there will be quite a few catalysts for both companies in the coming years that should drive some uplift in those prices, I would think,” Schlidt concluded.
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