Biotech major AbbVie Inc (NYSE: ABBV) (ETR: 4AB) just proved that it is willing to spend a mountain of cash to capitalize on the emerging market for psychedelic drugs.
The pharma operator announced Monday that it is acquiring Gilgamesh Pharmaceuticals’ lead drug candidate bretisilocin (GM-2505) and its associated intellectual property for up to US$1.2 billion. It will include an unspecified upfront payment and development milestones.
This new development and definitive agreement builds on a collaboration established between the companies last year to jointly develop treatments for psychiatric conditions.
The investigational therapeutic is what’s known as a 5-HT2A receptor agonist and is used to treat major depressive disorder. It is administered via intravenous infusion with effects lasting for approximately two hours. It has been described as robust but brief.
“One dose. 14 days later — depression scores cut in half,” commented Bill Gadless, Founding Partner at the marketing agency emagineHealth, in a very popular social media post. “Fast in, fast out. No eight-hour ‘trip.’ Clean safety. No serious side effects,” he added.
“AbbVie didn’t write that billion-dollar check for fun. They see what’s coming: the next wave of psychiatry isn’t SSRIs or talk therapy alone. It’s short-acting psychedelics built for real life.”
The drug was able to achieve a 94 per cent remission rate after 29 days in a recent Phase II clinical study on 40 patients with MDD. This significant achievement was complemented by minimal side effects and reports of sustained efficacy 74 days later.
“Large Pharma has been less active exploring psychedelic compounds due to potential regulatory concerns, making today’s deal more significant,” said Bank of Montreal (TSE: BMO) (NYSE: BMO) Capital Markets analyst, Evan Seigerman.
As a result of the transaction, Gilgamesh will be spinning out what remains of its company into a new entity known as Gilgamesh Pharma Inc. The team there will focus on development of an ibogaine analogue and other therapeutics used to treat schizophrenia and anxiety.
In addition to depression treatment, AbbVie targets blood cancers, solid tumours, Parkinson’s, autoimmune diseases and other conditions with an extensive portfolio of drugs. Its market capitalization currently exceeds US$365 billion, making it the world’s 25th most valuable company.
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