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Britain's first investment fund dedicated to psychedelic healthcare launches

Kalila Sangster
·3-min read
In the US, the Food and Drug Administration (FDA) recently approved psilocybin therapy — the use of a hallucinogenic substance found in magic mushrooms — for treating major depressive disorder. Photo: Getty
In the US, the Food and Drug Administration (FDA) recently approved psilocybin therapy — the use of a hallucinogenic substance found in magic mushrooms — for treating major depressive disorder. Photo: Getty

The UK has launched its first investment fund dedicated solely to psychedelic healthcare.

The fund, launched by London-based venture capital firm Neo Kuma Ventures, has no set cap and will continue to draw venture capital throughout the first half of next year.

The fund will be used to invest in “the most exciting, high quality and scientifically sound players in the industry,” according to Neo Kuma.

The newly formed firm which has already drawn “millions of pounds of investment” is focused on clinically proven psychedelic medicines.

It comes as recent clinical trials have shown the potential of psychedelics to treat mental illnesses including post-traumatic stress disorder (PTSD), depression, addiction and anxiety, according to the firm.

Neo Kuma believes psychedelic medicines will hit the market within the next five years.

In 2019, Neo Kuma’s founders backed ATAI Life Sciences AG, a part-owner of COMPASS Pathways (CMPS), which this year became the first psychedelic medicine company to float on Nasdaq and is now trading at a market cap of $1.98bn (£1.5bn).

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Neo Kuma Ventures co-founder Sean Mclintock said: “As the medical benefits of psychedelics become more well-known and regulators steadily increase their embrace of these types of drugs, the industry is set for a boom. While much of the conversation on psychedelics is taking place in the US, Europe is the true hub of the burgeoning psychedelic healthcare sector.

“We look forward to investing in the most exciting, high quality and scientifically-sound European players in the industry to facilitate their ground-breaking research.”

The growth of the psychedelic healthcare industry comes on the back of a surge in the medicinal cannabis industry.

In the US the medicinal cannabis industry rocketed from an estimated total value of $2bn in 2014 to an estimated $35bn in 2020.

Britain is set to see the greatest cannabis medical market growth rate in Europe between 2020-2025, according to a report by international cannabis market research firm Brightfield Group. Expectations to allow for domestic cultivation and general practitioners prescribing in the coming years will result in a 2020-2025 compound annual growth rate (CAGR) of 98%, the report found.

In 2019, the NHS started prescribing its first cannabis medicine for epilepsy in the UK.

Last year a nasal spray containing esketamine created by Johnson & Johnson (JNJ) was also approved for use in the US and Europe to treat adults suffering with treatment-resistant depression. This was the first major advance in the treatment of depression since the late 1980s, according to Dr David Nutt of Imperial College London.

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In the US, the Food and Drug Administration (FDA) recently approved psilocybin therapy — the use of a hallucinogenic substance found in magic mushrooms — as a “breakthrough therapy” in treating major depressive disorder (MDD).

One in four people will be affected by a mental or neurological disorder in their lifetime, and one in 20 will be severe cases, according to the World Health Organisation.

In England, the Centre for Mental Health has predicted that up to 10 million people — almost a fifth of the population — will need mental health support due to the impact of the coronavirus pandemic.

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