- Medical applications that involve (relatively) large doses of psychedelics that produce an “experiential” effect as part of the medical therapy.
- Medical applications which require only micro-doses of psychedelics and produce no hallucinogenic or perceptible psychoactive effect.
Consumed at the experiential level, psychedelic drugs are literally “mind-altering substances”. But this isn’t necessarily a bad thing. These medically supervised psychedelic “trips” are intended to shatter rigid thought patterns that accompany many mental health disorders such as depression and anxiety.
Where traditional psychotherapy may require months or even years to alter such thought patterns, psychedelic drugs can speed up this process. In some instances, even a single psychedelics therapy session has been reported to generate months of therapeutic benefit.
At the same time, even staunch advocates of psychedelic drugs like Rick Doblin (the head of MAPS) acknowledge that such guided therapy sessions “are not for everyone”. Breaking old thought patterns is liberating for many but frightening for some.
Then there is psychedelics microdosing.
Relatively newer avenues of drug research are exploring the therapeutic potential of microdoses of psychedelic drugs.
The rationale is simple. Psychedelics have very potent effects on the human brain and neurological system, as indicated in a recent medical study on psilocybin by Johns Hopkins University.
Given this potency, many scientists are confident that important medical benefits can be derived from much lower doses of these substances.
There are several practical, regulatory and commercial advantages with respect to microdosing applications for psychedelic drugs.
1) Non-psychoactive dosage levels
- Eliminates the need for medical supervision
- Eliminates the cost of (expensive) therapy sessions
- Patients can selfadminister drugs at home
- Eliminates the cost of (expensive) therapy sessions
- Patients can selfadminister drugs at home
2) More efficient drug development
3) Greater market penetration potential
4) Greater profit potential
3) Greater market penetration potential
4) Greater profit potential
Non-psychoactive dosage levels
On one level, therapies built around micro-doses of psychedelics are much more practical. Patients don’t need to find time in their schedules for formal guided-therapy sessions. Lower-income patients don’t need to pay for the expense of these supervised therapies (generally from $600 - $1,000 per session).
In turn, as a cheaper, more convenient, less expensive mode of treatment, patients will be much more likely to embrace such therapies, i.e. higher adoption rates. For similar reasons, physicians will be less reluctant to prescribe such medications. And insurers will be more receptive to covering such therapies.
These practical advantages can be expected to translate into commercial advantages (see below).
More efficient drug development
Big Pharma estimates the median cost to develop a new drug at approximately $1 billion. While some industry observers consider that figure to be inflated, drug development is still generally a nine-figure financial burden.
In addition, the time from drug discovery to commercialization is typically from 5 – 10 years.
Given the enormity of R&D costs, strategies that can reduce those costs are enormously important. Equally, these biotech and biopharma companies need to reduce the time horizon for drug development.
Every year spent in the drug approval process is one more year that the company has to finance not only the R&D itself but also its general administration costs. Microdose applications of psychedelic drugs can be expected to be generally both faster and cheaper to develop.
Many psychedelics are non-toxic. This means at micro-dosage levels, safety and tolerance concerns (the subject of Phase 1 clinical trials) will be minimal.
This should also carry over to greater efficiency in Phase 2 of the clinical trial process, where drug efficacy (“proof of concept”) is established.
At higher dosages, patients for these drug trials must be carefully screened. For example, patients with even a trace of psychosis in their psychological profile are generally automatically rejected as candidates for treatment.
Microdosing R&D will require much less-rigorous screening.
A Phase 2 clinical trial also needs to establish optimal dosage levels for the drug being tested. At higher dosages, scientists must be much more cautious in adjusting dosages because of the increased frequency and severity of side effects.
More time, more expense.
Microdosing R&D should also be more efficient in identifying optimal dosage levels because of less need for caution in adjusting dosages.
Even in Phase 3, microdosing R&D will be more efficient in many cases. Phase 3 testing requires a much larger test population in order to pass the final hurdle for drug approval.
The more rigorous screening required for experiential dosages of psychedelics may make it more time-consuming (and perhaps impossible, in some contexts) to produce a large enough test population to satisfy regulatory scrutiny.
Greater market penetration potential
As already noted, microdosing of psychedelics is less expensive, less intimidating, and more convenient for patients. These factors – in combination – should lead to much higher patient adoption rates versus psychedelic drugs that require higher dosages and guided therapy sessions.
Physicians can also be expected to much more readily prescribe such drugs. Without the psychoactive side effects, both patient safety concerns and leftover biases from the War on Drugs will be less of a factor.
Insurers can be expected to approve such therapies for coverage at higher rates. Without the need for medical supervision, microdosing therapies should be much less expensive than approved psychedelic drugs that require such supervision.
The smaller quantities of drugs required should also translate into lower drug costs. These bottom-line incentives can be expected to make insurers much more receptive to microdose drug therapies.
Cheaper and more practical for patients. Greater support from physicians, insurers and healthcare institutions. In combination, this should lead to much greater market penetration versus psychedelic drugs administered at experiential dosage levels.
Greater profit potential
The superior market penetration potential for microdosing applications of psychedelics by itself implies greater profit potential.
Sweetening the picture here, such microdose drugs should also be able to generate and preserve larger margins. It’s simple economics.
With larger-dose applications that require medical supervision, the therapy session itself will be the largest component of cost/revenue (ranging from roughly $600 - $1,000 per session).
Pharmaceutical companies that try to extract large drug margins (on top of the session cost) could price themselves out of the market with many patients and/or insurers.
In contrast, with microdosing the drug cost itself is the entire cost of the therapy. In this context, it will be easier for drug developers to capture and preserve larger margins because they don’t have to share the revenue pie with therapists.
Entirely separate from the medicinal benefits of psychedelics microdosing are the general health & wellness benefits of psychedelics microdosing that is being reported anecdotally.
Microdosing LSD Is A Growing Silicon Valley Trend. But Does It Actually Work?
Anecdotally, people who microdose with psychedelics have claimed the drugs deliver a range of benefits such as heightened focus, productivity and creativity, as well as psychological and emotional well-being. The effects are apparently so positive that microdosing has been described as the “life hack du jour” in Silicon Valley, where the practice first gained widespread popularity.
Anecdotally, people who microdose with psychedelics have claimed the drugs deliver a range of benefits such as heightened focus, productivity and creativity, as well as psychological and emotional well-being. The effects are apparently so positive that microdosing has been described as the “life hack du jour” in Silicon Valley, where the practice first gained widespread popularity.
Psychedelic Stock Watch will explore the health & wellness side of psychedelic drug use in an upcoming article.
For investors interested in the potential of microdosing applications of psychedelics, two companies currently lead the way in such drug research – one public, one private.
Both public company MindMed Inc (CAN:MMED / US:MMEDF) and private company Eleusis Ltd. have advanced-stage R&D for microdosing applications that are currently in clinical trials.
Drug development is expensive and competitive.
Consequently, even one of the major advantages outlined above is a significant inducement for both psychedelics companies and investors to target micro-dosing medical applications for psychedelics.
With all of these factors that favor micro-dose therapies, psychedelics companies engaging in such research can be expected to have the inside track in commercializing psychedelic drugs.
DISCLOSURE: The writer holds shares in MindMed Inc.