Christian Angermayer, a billionaire backer of Compass and cofounder of Atai, said that because a lot of money is needed to fund the clinical research that will transform psychedelics into approved medications, for-profit companies — and their patents — are needed to bring these treatments to market.
In a panel at a conference on the psychedelics industry, two investors said they would hesitate to invest in a psychedelics company that doesn't have a patent strategy in place.
"Patents provide some level of comfort for investors, but I think there are multiple approaches to things," said Richard Cheung, the general counsel at Noetic Fund, during the event.
A different way of doing business
There are some psychedelics companies that are working to limit the use of patents or avoid them entirely.
Journey Colab, a Y Combinator startup that's working to win approval from the Food and Drug Administration to use mescaline as a medical treatment, said in a statement that while it did not oppose patenting truly novel inventions, it opposed strategies "that seek only to stymie competition or create winner-take-all outcomes."
"We believe it's inappropriate to attempt to patent molecules that are in the public domain, and/or to patent existing, common therapeutic procedures," Journey Colab said.
Liana Sananda Gillooly is a cofounder of North Star, a nonprofit focused on encouraging businesses in the psychedelics industry to sign a pledge to respect the traditional uses of psychedelics and create ethical business models.
Gillooly said that at least a dozen companies have signed so far, including Noetic Fund and Maya Health.
"We can't pretend that we're going to somehow stop the juggernaut and business as usual," Gillooly said.
She said the aim is to "generate an alternative pathway forward that incorporates and places into action some of these principles that work with slow and patient capital, that works with kind of more grassroots developmental projects, instead of top-down, cookie-cutter psychedelic clinics models."
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MAPS is studying whether a psychedelic compound can help treat PTSD
Gillooly is also a development officer at the Multidisciplinary Association for Psychedelic Studies, a nonprofit pursuing a strategy for its psychedelic-based medical treatment that doesn't rely on patents.
MAPS is developing an MDMA-assisted therapy for post-traumatic stress disorder that recently showed promising results in a clinical trial. MAPS hopes to gain FDA approval for the treatment in 2023.
Rick Doblin, the organization's founder and executive director, said he isn't interested in filing patents related to its work with MDMA. Instead, MAPS is focused on data exclusivity, a protected period of time granted to FDA-approved treatments before rivals can sell similar versions.
MAPS would get about five years to offer its treatment before competitors could also do so, and it may be granted an additional year if the organization engages in pediatric studies.
Doblin said that five or so years is more than enough time to reap the rewards of developing new treatments.
"The field is so new, there are so many people suffering, that the more companies are out there, the better every company will do. It changes stigma, gets therapists trained," he said. "It doesn't make sense to block everyone else."
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'People are free to do what they want'
Compass is taking a more aggressive stance than MAPS. The company submitted an application in 2020 that attempts to patent aspects of psychedelic therapy such as giving psilocybin in a room with soft furniture or "a substantially non-clinical appearance."
Two patent attorneys — Graham Pechenik and Mark Lemley — who reviewed the application for Insider said the patent, if granted, would essentially bar other companies from incorporating these elements into their own practices.
Still, Pechenik, a patent attorney who works with psychedelics companies, said applications are often filed with claims that are broader than what a company expects to receive.
Lemley, a professor of law at Stanford University, said that elements such as furniture and decor are just one element of the patent claim. Compass would only be able to bar competitors who are using both a similar setting and treatment.
Compass disputed this characterization of its patents, saying that it's not trying to patent the ways that these therapies are delivered.
"People are free to do what they want. Clearly we're not patenting a setting," Wilde said.
Freedom to Operate is seeking to challenge in court the patent that Compass was granted in 2019, which protects its manufacturing process for psilocybin. FTO has contracted around 20 consultants, attorneys, psychiatrists, and chemistry experts for this fight, and Turnbull said he knows it could be a long battle.
"I was told by someone very knowledgeable that this could go on for many years and cost many millions of dollars," Turnbull said. "I didn't look six months ahead. I just thought, 'OK, that thing is wrong. I think somebody has to say something about it.'"
This story was updated on June 9 with a comment from a Compass spokesperson who says that the company did not make any claim amendments in response to third party submissions.