Psychedelic shares are edging closer to reality

HOW’S this for timing? In the wake of the Therapeutics Goods Administration’s surprise decision to allow psychiatrists to prescribe mind-altering substances in limited circumstances, the first pure-play psychedelic drug exposures are slated to list on the ASX.

The nascent listed sector blasted into the cosmos this week after the TGA recategorised psilocybin and MDMA from schedule nine (a prohibited substance) to schedule eight (a controlled medicine). The TGA decision means psychiatrists can prescribe these substances for treatment-resistant depression and posttraumatic stress disorder. As with previously, the drugs can be used in approved trials. Psilocybin is the active element of magic mushrooms, while MDMA is better known as ecstasy.

In pushing the shares as much as 88 per cent higher, investors were happy to forget that the stocks in question primarily are cannabis plays that have expanded tangentially into the mind-expanding stuff. But this year we should see the listing of the pure-play Woke Therapeutics and the demerger of Little Green Pharma’s psychedelics arm.

Woke, which plans to raise $5m in a pre-IPO round early in the year, followed by a $10m-$15m IPO and listing around September, is launching the world’s biggest psilocybin study in conjunction with Swinburne University, to evaluate psilocybin to treat treatmentresistant depression. Founded by Nick Woolf, the former head of cannabis stock Auscann, Woke has partnerships with several august institutions to develop synthetic psilocybin treatments. Woke also has an interest in researching LSD.

Elsewhere, Creso Pharma (CPH) has had a convoluted listed history including an aborted proposal to merge with the Ontario-based “magic truffle” purveyor Red Light Holland. Creso then acquired Canada’s Halucenex Life Sciences, focused on using synthetic psilocybin. A 20-patient PTSD trial was launched in December. Not to miss an opportunity, Creso is “exploring opportunities” to register its synthetic psilocybin formulation here.

The Perth-based, Gina Rinehart-backed Little Green Pharma (LGP) supplies cannabis oil and flowers to the European market. Along the way it created the psychedelics subsidiary Reset Mind Sciences, which it plans to demerge. Similarly, Incannex Healthcare (IHL)

is cannabis-focused but is carrying out a placebocontrolled anxiety trial using psilocybin, with 45 patients enrolled to date. The owner of a chain of medicinal cannabis clinics, Emyria (EMD) is carrying out early research work on MDMA with the University of Western Australia.

Investors this week have enjoyed a rewarding trip – so to speak – but there’s a long way to go until a psychedelic therapy is approved – if ever.

Meanwhile, we await the first psychedelic exchange traded fund to be available on the ASX.

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.