Psychedelics 101
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8 February, 2022 Psychedelics 101
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February 8, 2022

The Empire Club of Canada Presents

Psychedelics 101

Chairman: Mike van Solen, Past President, Empire Club of Canada

Moderator
Tiffany Kary, Journalist, Bloomberg News

Panelists
Najla Guthrie, President & CEO, KGK Science Inc.
Nick Kadysh, Founder & CEO, PharmAla Biotech
Kathryn Walker, CEO, Revitalist Lifestyle and Wellness

Distinguished Guest Speakers
Andrew Powers, Partner, BLG
Richard Carlton, CEO, Canadian Securities Exchange

Introduction
It is a great honour for me to be here at the Empire Club of Canada today, which is arguably the most famous and historically relevant speaker’s podium to have ever existed in Canada. It has offered its podium to such international luminaries as Winston Churchill, Ronald Reagan, Audrey Hepburn, the Dalai Lama, Indira Gandhi, and closer to home, from Pierre Trudeau to Justin Trudeau. Literally generations of our great nation's leaders, alongside with those of the world's top international diplomats, heads of state, and business and thought leaders.

It is a real honour and distinct privilege to be invited to speak to the Empire Club of Canada, which has been welcoming international diplomats, leaders in business, and in science, and in politics. When they stand at that podium, they speak not only to the entire country, but they can speak to the entire world.

Welcome Address by Mike Van Solen, Past President, The Empire Club of Canada
Good evening, fellow directors, past presidents, members, and guests. Welcome to the 118th season of the Empire Club of Canada. My name is Mike van Solen; I am a past President of the Empire Club of Canada, and a Managing Principal at Navigator Ltd. I am your host for today's event, “Psychedelics 101.”

I'd like to begin this afternoon with an acknowledgement that I'm hosting this event within the Traditional and Treaty Lands of the Mississaugas of the Credit, and the homelands of the Anishinaabe, the Haudenosaunee, and the Wyandot Peoples. Delivering a land acknowledgement allows us a chance to reflect on our connection, and responsibility to care for the land; and to recognize that to do so, we must always respect each other, and acknowledge our histories. We encourage everyone tuning in today to learn more about the Traditional Territory on which you work and live.

The Empire Club of Canada is a non-profit organization. So, I now want to take a moment to recognize our sponsors, who generously support the Club, and make events like this possible. Thank you to our lead event sponsors, BLG and the Canadian Securities Exchange. I'd also like to thank our season sponsors, the Canadian Bankers Association, LiUNA, Waste Connections of Canada, and Bruce Power.

Now, before we get started, a few housekeeping notes. I want to remind everyone participating today, that this is an interactive event. Those attending live are encouraged to engage by taking advantage of the question box by scrolling down below your on-screen video player. We have reserved some time for audience questions following the panel discussion. We also invite you to share your thoughts on social media, using the hashtags displayed on the screen throughout the event. If you require technical assistance, please start a conversation with our team, using the chat button on the right-hand side of your screen. To those watching on-demand later, and to those tuning in to the podcast, welcome.

It's now my pleasure to call this virtual meeting to order. I'm excited to welcome Najla Guthrie, Nick Kadysh, Kathryn Walker and Tiffany Kary to the Empire Club of Canada's virtual stage for the first time. You'll hear more about our panelists shortly, and you can find their full bios on the page below the video player on your screen. I'd now like to invite Andrew Powers, Partner at BLG, to deliver some opening remarks. Over to you Andrew.

Opening Remarks by Andrew Powers, Partner, BLG
Thank you very much, Mike. Good afternoon, and thank you for joining us here today, virtually. My name is Andrew Powers, and I'm a Capital Markets Lawyer at BLG. BLG has been very active in the emerging psychedelic space, so we are very pleased to be sponsoring “Psychedelics 101” today. Psychedelics are not the next cannabis, and we all talked about this just before this panel. It was it was a lively conversation, but that said, there are some parallels between the two, particularly in the way they both emerged on what I'd call a rising tide of social and political acceptance. Like cannabis, psychedelics have begun to emerge from the shadowy subversive corners of the ‘60s and ‘70s that have really defined them for decades. And they're now joining the mainstream. When I was taught as to talk about the future of psychedelics as a treatment for hard-to-treat mental conditions the first thing I thought about was Nicole Kidman. I know it sounds weird, but bear with me. I was desperate for some half decent streaming content. So, I started watching nine Perfect Strangers, which is a Netflix original series with a powerhouse cast, including Nicole Kidman—who's showcasing a truly terrible Russian accent. But without dropping any spoilers, I can tell you that this series grapples with the idea of using psilocybin to treat hard-to-treat mental conditions. If this isn't a sign of the growing mainstream acceptance of psychedelics, I don't know what is. The psychedelics are the first significant innovation in mental healthcare since the 1980s when antidepressants were introduced. Right now, so many people are turned on and tuned in to psychedelics, but instead of dropping out, we've got researchers, doctors, investors, entrepreneurs and legislators who are all turning up.

I'm proud of Canada in this regard. Our progressive drug policy saw Canada lead the world with the deregulation of cannabis for adult use in 2018, the first among G8 countries. This set a trend that resulted in the UN Commission voting to reclassify the drug in 2020. As the world scrambled to catch up with Canada, Health Canada quietly granted over 20 exemptions from the Controlled Drugs and Substances Act for researchers, drug developers, medical practitioners and patients, to access psilocybin. Last year, Health Canada made a ground-breaking decision on MDMA-assisted therapy approving clinical trials to investigate its safety and efficacy in combating treatment-resistant PTSD. The demand for novel treatments and restricted drugs is so high, that Health Canada has restored its Special Access Program, which makes it easier for researchers and healthcare professionals to obtain these compounds, for their research and for treatment-resistant disorders.

There are currently more than 50 ongoing clinical trials involving psychedelics. These studies are happening in some of the most hallowed halls of the most prestigious institutions around the world, several of them opening psychedelic research centres within those institutions, including Johns Hopkins, Imperial College London, Queen's University, University of Toronto, Harvard, and Mass General. More than 30 psychedelic companies have listed their securities on the CSE, and the TSX, and the NEO, since the beginning of 2021, and further growth is widely expected. Since the beginning of 2020, there have been approximately 50 psychedelics companies that have listed their securities and raised in excess of $300 million in the process. Overall, there are currently more than 75 companies focusing on psychedelics, this industry, and trading their securities on Canadian exchanges alone. So, I think the future of psychedelics is very bright, and I'm looking forward to the panel discussion today. Thank you for your time. Over to you, Tiffany.

Tiffany Kary, Journalist, Bloomberg News
Thank you. Hi, I'm Tiffany Kary. I'm a journalist for Bloomberg News. I also write for Businessweek magazine, and I have a weekly newsletter that focuses on cannabis and psychedelics. I just want to say welcome to what's going to be a fascinating conversation. I look back, and only once in the 119-year history of the Empire Club, has psychedelics been addressed. It was in 1972—which seems a little late—but I think we're here for a really historic conversation. And just before I hand it over to our speakers for an introduction, I wanted to give a quick primer. I think that the term psychedelics gets thrown around a lot. And so, when we use it here today, I just want to be clear that we're talking about a range of substances, and there are some overlapping distinctions people might want to keep in mind. For example, psilocybin, or magic mushrooms, are plant-based, which can have an effect on legal policy, particularly in the States; and there are other things like LSD, that are made in a lab; some things like MDMA, or ecstasy, have a street drug history; other things like Ayahuasca or Ibogaine, are sometimes called entheogens, and have a history of spiritual use. But today, we're going to group them all together for this conversation as psychedelics, because there's this renaissance of interest going on, as we've discussed; it’s scientific, it's business, it's popular culture. So, I'm going to turn it over to our speakers, and they'll tell you a quick line on themselves, and then we are going to launch into the conversation, and have some time for questions at the end. So, keep your questions ready. Najla, go ahead and introduce yourself please.

Najla Guthrie, President & CEO, KGK Science Inc.
Thank you, Tiffany. I’m Najla Guthrie, CEO of KGK Science. I founded KGK in 1997, out of the Centre for Human Nutrition here at the university, and we were ahead of our time at that point. Offering research services, clinical trials, preclinical work for the nutrition industry, we helped to really shape that industry, and a lot of products were brought to market then without any substantiation. You fast forward to today, and I'm proud to say, most of the products you see on the shelf, we've had a hand in substantiating them. In about 2017, we entered the cannabis market, because we saw a similar opportunity. And now we are, you know, very heavily into offering research services and regulatory services for the psychedelic space, as we see a lot of opportunity here. And we see similar trends that we want to be able to have an impact and shape an industry in the same way that we've been able to do so on the natural products side. Over to you, Nick.

Nick Kadysh, Founder & CEO, PharmAla Biotech
Thank you so much, Najla. I'm Nick Kadysh. I'm the founder and CEO of PharmAla Biotech. So, far, PharmAla is one of those companies that Andrew referred to, we’re traded on the CSC under the ticker symbol MDMA, which should give you an indication of what we do. So, PharmAla basically is a company has focused on the MDXX class of molecules, which includes MDMA, the most famous one is MDMA. And so, what we do is, we manufacture generic MDMA, which we sell for people who are doing those clinical trials and driving the science forward. And then, we’re also a drug development lab, so, we research and develop analogues of MDMA. Our focus is to improve the toxicology profile, because I have a regulatory background, and I think what regulators are really looking to see here, in order to move the category forward, is safety. I have a number of friends who are current and former regulators, and they like to joke that nobody gets fired if your drug doesn't work—but if somebody dies, that somebody definitely gets fired. So, we focus on safety, and we're looking forward to bringing some of the drugs to market in the near future. And with that, I'll kick it over to Kathryn.

Kathryn Walker, CEO, Revitalist Lifestyle and Wellness
Kathryn Walker, I'm the CEO of Revitalist Lifestyle and Wellness. Our company, we're based in the in the United States with the clinics that we do have; we have nine clinics across six states right now. My background, specifically, is more inpatient, with the hospital aspects, with critical care medicine. I also have a degree with anaesthesia and assume degree in psychiatry as well. So, we really focus more so on translational medicine. And what does that mean? That means taking the beauty of individuals, what Najla and Nick are doing, and helping to apply it to real-time people. So, we're really big on helping to, you know, streamline and kind of tunnel the clinical studies, while we're also bringing in real-time revenue with ketamine infusions, specifically. So, ketamine, if anyone doesn't know that drug, it's a beautiful drug that was FDA approved in 1970s, and it's kind of acting as the godfather for all these psychedelics. So, we have that to rely on. It's over 50 years old. So, exciting times. Glad to be here. And I'll hand it back to Tiffany.

Tiffany Kary
Thank you. I think the first thing we should all really discuss is, you know, why is this happening now? It seems like this is not just the ‘60s Redux, with people wanting to expand their minds. People talk a lot about a mental health crisis that’s going on, you know, anxiety and depression seem very widespread. Globally, there's a sense that the traditional pharmaceutical drugs aren't working for a lot of people. And I'd love for Kathryn to take the lead with that question, given her training in psychiatry.

Kathryn Walker
Yeah, absolutely. So, it's really interesting right now. I think this is a big learning curve for all of us, and we're starting to see that mental health is much more than what we think it is. This is very neurologically based, So, when we look at the pain crisis, we understand a lot of us with the opioid crisis, there's a lot of commonalities with mental health, pain, neurodegeneration, which includes all of the treatment-resistant conditions that we're all aggressively trying to address. And really, the neat thing about this is psychedelics are showing a lot of promise to address all of these different aspects of it. So, this is something as to why you can look and see right now, psychedelics are, across the board right now, being utilized in very successful studies. So, to see this, to be a part of this, I think investors specifically, this is going to change healthcare globally. And we have to do in a very constructive way, so we don't repeat the ‘60s again. And you know, and then the neat thing is, hopefully we've learned from our past, in order to build our future.

Tiffany Kary
Does anyone else want to talk specifically about what they think some of the most interesting applications are that these drugs are being put out there to potentially treat?

Nick Kadysh
Well, okay, I think the most interesting thing is maybe the breadth of different indications that are being looked at, for some of these molecules. So, obviously, I’m most familiar with MDMA, but it's currently being investigated for eating disorders for social anxiety, very far along with PTSD, I would argue. And Najla can correct me, because she is more in tune with the research side, but I believe MDMA is sort of the furthest along, having now completed a phase III trial, and having that trial published. And so, I think the most unique feature here is that there's clearly a lot of clinical evidence for broad applicability for these drugs, in a way that I don't think any other class of drugs really has that potential.

Najla Guthrie
Yeah, you're right Nick. And I think MDMA definitely is, you know, the most advanced here. And definitely, I think, you know, psychedelic interest towards treating mental illness has been greatly fueled by the fact that, you know, we see our heroes, our loved ones, our mentors, afflicted by mental illness, and you know, the stigma of mental illness is starting to go away, which is a good thing. And now we're getting over the stigma of psychedelics, which was with us for a long time. So, finally, I think we're starting to have some serious discussions over the therapeutic potential, and what they can do—they're no longer the topic of that kind of conversation on that 70 Show. We're starting to have real conversations on these, and their effects, and the science is starting to catch up as well. So, you know, we now see potential for their use, not only in mental health, but in a lot of different indications. And you see, governments, non-governments, even Veterans Affairs hospitals, are starting to look into the therapeutic potential.

Tiffany Kary
And let's talk a little bit more about what's going on with the scientific research. I think it's really exploded in this space. And I encourage everyone watching here to check out the drug development tracker that we have on our resources link. It shows just how many substances are in clinical trials, and just how many different conditions that they're aiming at, like major depressive disorder, addiction, PTSD, cluster headaches. And so, Najla, maybe given you a bird's eye view of clinical trials, you know, could you characterise a little better for everyone what's going on with some of the more popular candidates right here, because as we know, as someone said, if someone dies in one of these trials, or if there's an adverse effect discovered, it can be quite a setback. So, if you could address, you know, what you think is the risk right now, as far as it's been documented for both immediate-term issues, people maybe harming themselves, or others, during some of these psychedelic or hallucinogenic trips, and the risk of long-term psychosis, which has been something that people have talked about for a while.

Najla Guthrie
Thank you. Definitely, I think the research is emerging on a lot of these areas. And the biggest risk here is, you know, using these compounds with without the data behind them, and without supervised medical supervision. And I think we really have to be careful as an industry. We suffered a setback in the ‘50s, and ‘60s, and we really need to make sure that we have the safety evidence behind these compounds. And you know, we've got a path. There's a drug path, a regulatory path to getting the data to be data-driven, to walk in the front door of the FDA and Health Canada to get these products approved, once you have the safety and efficacy data behind these. And a lot of responsible companies are doing that. And I know a number of companies that are working with us on a lot of different projects, both in the mental health space, as well as in other indications, such as anxiety, such as IBS, there's also companies looking at combinations with natural compounds, and being innovative, which is really, really exciting from our perspective. You know, as a scientist—I started out as a scientist in 1997, spinning out the company—I haven't been this excited about science, and about a class of compounds, in a very long time, because I see the potential, and I see what these compounds can do. They have profound effects on the human mind that we're just beginning to understand. We do know that high doses of psychedelics such as Ayahuasca, psilocybin or LSD, are associated with remarkable increases in introspection. These altered states, you know, facilitate an openness, and an even journey into healing. There's lots that we still don't know, but we need the research to make sure that we can be guided by data, and let the science lead the way here.

Tiffany Kary
And do any of you have a view on some of the potential side effects that may have come up in the clinical trials so far, or the potential long-term risks? Something that has come up in cannabis, as I've reported on it, has been youth use. How do you keep this out of the hands of younger people?

Kathryn Walker
I can add to that. So, I think a lot of this, something that we all need to realize is, this is going to change the way we look at mental health. It's showing us that mental health can actually go into remission, it's showing us that the brain actually has some form of regeneration. So, this is something that's going to change everyone's thought process on the way that we look at mental health, period. A piece of this—and I think Najla and Nick would agree with this—is the lack of education that we have in this space, in mental health. So, a lot of people think that mental health is completely out of their control. When we look at inflammatory factors, we look at different types of neurotransmitters and such, psychedelics want to change all this. They're saying that there's actually something around your brain called your blood-brain barrier, and it's actually causing it to heal. And they're seeing that sometimes this is porous, and there's actually data now that shows it. Why do people with mental health die, or mental health issues? Why do they die more quickly with COVID? And they think that there's a direct relation there with the brain, and the psychedelics are healing this too. So, as we go along with this, and we see the beauty of this revelation that we're in right now, we want to make sure that everyone is educated on this, because you can give someone any substance, and if they don't know how to use it, good or bad, it’s going to be ineffective or lethal, one or the other. You can't give a 16-year-old child a Ferrari and expect them to handle it reasonably. So, it's one of those things to where, while we do this, we're not telling these people to manage their mental illness, we're helping them to heal from their mental illness. And this is the exciting thing, is when the FDA approves a lot of these substances, they can say that these effectively treat something.

And then when you look at the comparison with all the anti-psychotics that we have right now, so you've got four different categories of anti-psychotics: your SSRIs, or SNRIs, your TCAs, your MAOIs, those are your four hot topics. When you look at the side effects of those drugs, and you compare them to psychedelics, or cannabis, but you compare them to those to the side effects are, it's amazing to see the difference, and how little the side effects are. That doesn't mean that they're not going to be abused more often. They're a safer drug to abuse. So, they're not going to be like opioids—we don't need more psychedelics when we use them—but is it going to be something that we get psychologically addicted to, because we don't have the skills to deal with the issues that may be causing our mental illness to flare up again? Yes. That's what we have to be careful about. So, it's doing it in a very responsible way. And right now, timing is everything, right? Investors love timing. You can’t get any better timing than this. We're in a mental health crisis and a global pandemic that no one has ever seen, and we have the substances that are going to treat this. So, it's a very exciting time. But again, we need to see the risks and the benefits, and we need to weigh each accordingly.

Nick Kadysh
Yeah, and if I may add, I think part of the reason that we're seeing a lot of attention on controlled substances now, is because people have actually seen that maybe the drugs that we consider to be relatively safe, like opioids, which are widely prescribed—and, you know, these are approved drugs—are, in fact, with misuse, incredibly dangerous. And so, I think there has been an adjustment in the minds of a lot of people in that, like, okay, let's look at these things. Can they be used for good? And if they can be, and that can be proven with clinical trials, then let's not get hung up on are they controlled substances, are they illegal, are they illegal, are they useful? And the answer that we're getting out of all of these clinical trials is, yeah, overwhelmingly, these are very, very useful molecules, as long as they're used properly.

Tiffany Kary
Thanks, Nick. I think that's a great segue into talking about some more of the regulatory issues. You know, we're at an event here in Canada, but in the United States, it's certainly clear that the legalization is sort of proceeding similar to the way it did with cannabis, yet it's very piecemeal. You have cities like Seattle and Detroit, and some states like Oregon, that are doing their own thing and decriminalising possession, even as the science is still coming along. You know, and gradually that helps academia, the research is opening up, people can get clinical trials done faster. And then in Canada, there's the recent legal change that we've all talked about. If you could just sort of sum up, you know, what you think the regulatory changes are that the industry is looking for here? What you kind of see in your crystal ball, and things like how far are we away from having more widespread adoption of maybe MDMA therapy, and psilocybin, which seem like the two that people talk about as maybe being closest to getting through some of these clinical trials?

Nick Kadysh
Totally. Well, so the recent change in Canada was a change to the Special Access Program. They actually, it’s not like a new change; they've gone back to what was the case, throughout the ‘90s, which is basically the category that is up here in Canada is called controlled substances, which includes psilocybin, MDMA, DMT, is now accessible through the Special Access Program, and basically just allows a doctor to request an unapproved drug for their patient, from Health Canada. Now, I will say that I think Health Canada is still finding their way on this is very recent change. It's only a couple of weeks old, and as far as I know, not a single MDMA treatment has been approved yet through the SAP, even though the turnaround is supposed to be 48 hours, it's supposed to be pretty quick. And we're working with a number of healthcare professionals as a drug manufacturer, to basically say, if you get a patient approved, we can provide you with the drug to treat them. But I think the regulators are also trying to figure out a way to do this properly. What I think is also holding things up is, ultimately clinical trials are difficult, and so, gathering all the data that you need in order to get a drug approved. I know we just had like pretty miraculous COVID vaccines approved in record time, but most drug development takes a while. And I think, especially for people who are new to this industry, you have to understand that pharma takes time. It's very labour-intensive, it's very difficult, very capital intensive. And so, even for a drug like MDMA, which has been through phase III clinical trial, there hasn't been a single new drug application done for MDMA yet. It takes a while.

Tiffany Kary
That's it. I've heard some people say, you know, maybe 2023 is the year it's going to be approved. And that seems awfully near. Do you agree?

Nick Kadysh
Yeah. Fingers crossed. Yeah, look, I think a couple of weeks ago, there was an FDA-NIDA conference. And if you know anything about the US regulatory regime, NIDA is usually the agency that's very like anti-controlled drugs. But for the first time, we saw a real openness from NIDA, in looking at psychedelics and doing the research. There were some comments from the director of NIDA that basically said, like, we have an obligation to enable research into these substances, which is really gratifying to see. But it doesn't change, in my mind, the realities of how difficult it is to do drug development. Right. But gratifying to see for sure.

Tiffany Kary
Want to weigh in with regulatory predictions? What you see in your crystal balls?

Najla Guthrie
Yes, yeah, I think you know, from my perspective, one of one of the frustrations for me has been that we've compared this so much to cannabis. And we're trying to, you know, mirror how cannabis products were brought to market, that psychedelics should follow the same path. And they shouldn't. Psychedelics are not going to be recreational anytime soon, and they shouldn't be. There's a drug path for these, to bring them to market, and they should follow that drug path. They have huge potential. And yes, I agree with Nick, that, you know, drug development takes time. It's capital intensive. And I think that's one of the things that investors need to need to understand is how long it takes, but the return on investment is huge once you have your product approved. And once you have your product, having gone through the process of gathering the data and filing for a drug application, and getting that approved. And so, I think we need to be patient with that, and we need to make sure that we do it the right way, so that we can bring these therapies to the public, and have them make a huge difference in people's lives. Otherwise, if we treat it like cannabis, you're going to have—it's really irresponsible—you're going to have people self-medicating. And that's one of the reasons why, in the cannabis industry, companies aren't investing in medical use of cannabis, because there's no return on their investment. Someone can walk into a dispensary anywhere in Canada and self-medicate, you know, they read an article that says CBD or THC is good for anxiety or sleep or pain. And you know, they go into a dispensary and buy that, and go home and take it. That would be really irresponsible here, because, you know, these are not the same compass.

Tiffany Kary
Thank you, those are really great points. I think a lot of people don't really understand how different psychedelics are, in terms of them pursuing this FDA pathway; they're really much more like biotech companies. That said, these drugs have been around for a really long time, which sort of poses some interesting business challenges. And one thing I'd love to hear you all weigh in on is, you know, this is already such a crowded space. It seems like there's a lot of universities pairing up with start-ups, there's just so many start-ups out there. A lot of them are dealing with these plant-based substances that have been around for centuries. So, you know, how do you patent that? Or, if you're trying to come up with a novel molecule that maybe de-risks some of these substances in terms of their side effects, or giving people shorter trips, you know, what are some of the challenges there? And what are some of the more creative business models, maybe that aren't dependent on these? You know, we've seen different businesses come up that are organized around supporting clinical trials, or just supporting different new models of therapy.

Nick Kadysh
Yeah, look, I one thing I will say, is, what we discovered when we started PharmAla is, there is a huge lack in the supply chain for a lot of these. So, you would think that because these molecules are—they're basically not new; they've been around for, you know, in the case of MDMA, over 100 years now. And they've been very well researched for a long time. Maybe not always with the lens that we would like, as healing therapeutic molecules—I think in the ‘80s, probably a lot more research was on like, how fast will this stuff kill you; driven by the DEA. But lots of research, nonetheless. Right? So, I think, on the one hand, that presents a huge opportunity, because companies that are smart will use that body of evidence to accelerate their research; hat is something that we're incredibly focused on: how do we get through phase I and directly into phase II? Because we know what these molecules are, and we know what they do—all the tox data is widely available. The flip side what we discovered, and it's actually the reason that we started making MDMA ourselves, is there is no supply chain. So, if you want to go and do research on one of these molecules, trying to get your hands on the GMP, clinical grade psilocybin, MDMA, DMT, is like an impossible venture. I have companies call me—you know, maybe not every day, but like once a month—saying, “I want to do a clinical trial next week, or next month, and we need supply.” And the answer that is, you're not doing a clinical trial next month, because there is no supply—you know, maybe in six months. But that's, I think, another important incredible challenge that people who—like it's so under the waterline, that only the companies know that they're dealing with it right now.

Kathryn Walker
And I'll add to that, too. You know, there's a piece with this—again, let's not compare psychedelics to cannabis, let's respect that they both are new substances in this space, and they are going to change healthcare—but we all need to realize too, healthcare, just in the United States alone, is almost a $480 billion market on an annual level. And there's so many different facets in healthcare, specifically, to where these drugs are just the start of the tidal wave that we're going to see. We are changing the way healthcare is going to be presented and received, and you know, it's going to be different pieces right now. So, right now, with medicine, we may see somebody for 10 minutes—get them in, get them out, and go. We're seeing that these drugs change the level of consciousness with individuals, and that's something that is needed in order for a lot of these individuals to be able to have that self-introspection, to just have that connective community. So, you hear all the time that the systems across the world are broken because we don't spend time with people. Maybe these drugs are coming to the surface to where we can learn to spend time and invest in each other.

So, you know, to look at it in the very unilateral fashion that it’s just drugs coming to the market and different pieces like that, everyone needs to know that that’s step one, out of probably step 2500. This is going to change, like I said. It's going to change neurologic, some change with cardiothoracic models, it's, you know, even with different pieces with like I mentioned earlier with the heart healing, you're even looking at one studies with these different aspects as well, because it's changing people's pulmonary functions. So, what is it doing? We still don't know; but the neat thing with this, compared to all the medicines that we've been using for the past 50 or 60 years, we have real-time evidence that shows what it's doing. A lot of the medications that are out there right now that are FDA approved are based solely on theories. We thought that you know, serotonin, we think serotonin works this way—now we know for sure that psychedelics are working this way. So, it's going to be a night and day difference. And for investors, no one's going to see what this pattern does, because we've not seen this before. None of us have been alive to see this happen, so this is going to be a ground-breaking, world-changing event. And I would encourage anybody to invest your money in what you feel is worthy in this space, that's going to be your difference. Who's real, and who's fake, and how do you know the difference, if they're just doing quantity, or they're just doing quality? Because this is a quality product, and it's going to change everything across the whole globe. So, that's my two cents.

QUESTION & ANSWER

Tiffany Kary
Thank you, Kathryn. And that is a great segue into our Q&A. We already have a lot of questions coming in from the audience, and one of the first questions is, you know, we've all talked here about the promise today. If that is the case, why are psychedelics stocks doing so poorly right now? And I'll just offer my two cents worth, since I have written about this recently, I think there are so many players in this space, and it really is at an early stage. And we don't know, as Kathryn said, who the winners and losers will be, but I'm very curious to hear if anyone else wants to weigh in on that one?

Nick Kadysh
That feels very pointed Tiffany, because my stock is definitely trading at all-time low. Even though it's only been on this topic for about three weeks, I feel attacked here. No, look, I think that's absolutely a part of it, is that there is a mismatch between what investors expected, especially early investors who expected like, ‘wham, bam, cannabis returns, we're all rich.’ And this is not that; this is biotech. It takes time, it takes effort, you know, we've talked about that at length. The other thing I would say, I would just please remind all investors out there to remember that when you buy our stock, we don't actually get any money from that; you're buying from other investors, and so on. It's like, okay, I'm a company CEO, I care about return on investment for my investors, I want my stock price to reflect the real value of my company, but on a day-to-day basis, I'm not worried about my stock price. I'm worried about are we doing good clinical work; are we manufacturing good products; are we selling those products to customers, we’re going to do more good research, and drive the whole ball forward; and are we dealing with government in a responsible and effective manner? Those are the things that you should be looking for. And I think, over time, those companies are going to do very well.

Tiffany Kary
I think in a lot of cases, can’t we expect a lot of these companies to lose money for quite a few years as they go through clinical trials, before they can actually try to sell?

Najla Guthrie
Yeah, exactly, Tiffany. And I think, just to add to that, investors need to do a deep dive into the company's IP strategy, their regulatory strategy, their path to market, and that's going to tell them the gaps, and it's going to give them a realistic expectation of time to get the product approved and out there. So, you know, that's, that's really what investors need to be looking at, when they're looking at companies.

Tiffany Kary
And some people say, if we use an analogy to biotech investing, you know, that's a really hit or miss industry to invest in, but people say, “look, maybe psychedelics is a little less like that, because these molecules do have some toxicology data, or some history of anecdotal use.” Is that a case when there's so many companies trying to work with the same molecules, or come up with variations on them, though?

Najla Guthrie
No, I absolutely. I mean, I think, you know, from an investor's perspective, they really need to do their due diligence. But it is not your traditional biotech. I mean, it isn't it isn't. To Nick’s point, yes, it is a biotech model, but because we have so much anecdotal data on these compounds. The risk, I think, is a lot less than your traditional new biotech molecule that you're trying to bring through the drug process and to regulatory.

Nick Kadysh
Yeah, I couldn't agree more. I think that psychedelics are a new paradigm in drug development, in that, you have all of this data, and the companies that are really smart about the regulatory strategy will use that to accelerate their drug development and build incredible value for shareholders relatively quickly—and I say relatively, because relative to traditional biotech, where development could take decades. Like, how long or what did it take for mRNA technology to be to the point where we could make vaccines with it? Twenty years, give or take, right? But the flip side is, it's still very long timelines from the perspective of some investors who I think measure returns in milliseconds, rather than months and years.

Tiffany Kary
And the next question is very different question. It's from someone with a personal issue that maybe a lot of other people out there would benefit from hearing. As someone dealing with PTSD from concussions, I'm interested in learning more about medically supervised psychedelic treatment. How would you recommend seeking assistance? You know, how does someone right now, who has a problem that they think might benefit from psychedelics, go about trying to find treatment?

Kathryn Walker
In looking at psychedelics specifically, where they're not regulated yet, they would have to go into a clinical trial, where they have the permissions to use those. The psychedelic that we're using currently, that is legal in the States specifically, is ketamine. And ketamine, it acts in a very similar manner as other psychedelics, but ketamine is—there's probably around a thousand clinics across the United States that look at that, or offer those services. So, someone who has PTSD, especially with Post-Concussion Syndrome, I would recommend anybody to seek out ketamine, specifically for PTSD. I already think that PTSD is a treatment-resistant condition. I hate that we sometimes give antidepressants for PTSD, because I don't think that it's a direct treatment for PTSD. We've seen remarkable results with ketamine in PTSD. So, anybody who's struggling with that, I would highly recommend them to seek out someone who has ketamine, or a medically supervised clinic that has ketamine—don't go home and dose yourself with Special K—but then, you know, also look at participating with the ketamine-assisted psychotherapy; because there's a lot that you go through, with PTSD especially, there's a lot of behavioural changes that people go through. And then once we can cause emotional regulation, which ketamine does very quickly, which psychedelics do very quickly, we have to re-frame that emotional regulation in different contexts, because PTSD, the different sympathetic nervous system, which is kind of your fight, flight, or freeze, lowers, and then you have to relearn how to work in that system. So, it's all about education, and learning, and training, and doing it properly with medications that work.

Tiffany Kary
So, what about Canada's Special Access Program? You know, we talked a little bit about that. Is that not open to people with these conditions right now? I mean, it's very new, but people can apply with their doctor.

Nick Kadysh
Yeah, so, maybe if somebody is currently diagnosed as having PTSD, and their doctor believes that it is appropriate, and other treatments have failed—which unfortunately with PTSD is relatively common—their doctor can refer them to a psychotherapist, who is trained in psychedelic-assisted psychotherapy. And there are quite a few practitioners in Canada who already trained in preparation for sort of the hopeful legalization of some of these drugs, and they can make an SAP application on behalf of the patient. I will warn people that it's definitely not a slam dunk. Health Canada is being very careful, especially in the beginning, as they begin to roll out this SAP program. But I would definitely encourage anyone in Canada who is very interested, talk to your doctor and see if an SAP application is right for you. And then depending on who your who your practitioner is, you might get some of our MDMA.

Tiffany Kary
And what's your sense of the different conditions that Health Canada's considering? It's not just PTSD, with the treatment-resistant depression, and what else?

Nick Kadysh
So, I think in terms of what they're looking at, they like—look, you can make an SAP application for absolutely anything under the sun, but Health Canada will be looking for the conditions that have the greatest amount of clinical evidence. So, that would be most likely psilocybin for treatment-resistant depression; it would be MDMA for PTSD; and then, of course, ketamine, as Kathryn indicated, that's legal in both Canada and the US. And there are ketamine clinics that are already operating, and I think, certainly being used for both of those conditions already, legally, as we speak.

Tiffany Kary
Right, and we have another question coming in about treatment options. Someone says they're curious to try it, but they would also like to know what could go wrong. You know, how can we avoid this being promoted as a panacea that leads to maybe legal, or illegal overuse, and negative consequences? So, if maybe someone can speak to what the risk might be for someone on an individual level, and what the risks might be for the industry, if they don't take a really hard, careful look at what some of the risks might be.

Kathryn Walker
I think there's a little bit of an education piece there too. So, when states decriminalize medications or substances, that just means that they decriminalize it. That does not mean that your providers going to feel comfortable to prescribe it to you. So, when they decriminalize these aspects of substances, but your provider’s not prescribing them to you, or you don't have access in a certain way, a lot of people might go on the streets thinking that they know how to acquire a drug. And one thing that's very, everyone needs to be very mindful of, is drugs are oftentimes on the streets laced with other drugs. So, that's very common. Unfortunately, PCP, which is also Angel Dust, one of the strongest hallucinogenics out there, it's commonly being put in a lot of our street drugs right now. And while it's not necessarily overdosing potential that's going to decrease your respirations and heart rate, it’s actually going to—it’s an extreme hallucinogenic; it could traumatise you, because it's such a strong hallucinogenic. But then there's also the lacing of fentanyl that's in these drugs. So, what fentanyl does, one dose with that could actually stop your heart and stop your lungs, and that's something that we don't want to happen. So, that's something that we're actually aggressively pushing forward, to try to get the DEA to help to increase regulation with a decrease regulation and provide greater access, because we want clean drugs for these individuals, so they're not going to the streets. Side effects with ketamine, specifically, I can speak more to. The side effects with ketamine are very low. So, three biggest side effects that I usually tell individuals: nausea, headache, and an increase in your blood pressure, 10% from the baseline. Those are three things that can be commonly prevented or treated. So, those are the three biggest things. If you look at the anti-psychotics out there right now, there's probably 20, 30 40 different side effects with those, including increasing your suicidality, if you do have that. So, they are very safe. But again, you need to use them from proper people, who have clean drugs, that are medically trained, who can help you in the event something does come up. And they're trained to not only handle that, with the drug aspect, but also, the behavioural aspect. So, it's very complex, they're together, so they both need to be addressed.

Tiffany Kary
Thank you. Several more questions, so I'm just going to try to help the audience be heard here. So, another one is, to what degree is research inclusive of Indigenous knowledge that's been built up around some of these drugs around the world. So, if anyone can speak to that, you know, is there—I've heard there are issues with things like peyote and maybe some of these other drugs used by Indigenous cultures. Is that an issue for the industry? How does research work with the knowledge base so far?

Nick Kadysh
Look, I can speak to the fact that I think a lot of the groundwork that comes on the plant-based side of the psychedelics space, comes from Indigenous use. I sit on the board of a company called Pysched Wellness, which is commercialising Amanita muscaria. That mushroom has a ton of Indigenous use in sort of Northern Siberia-type area—Najla’s smiling because she's doing all the work for Psyched, all the research that they're doing right now, their preclinical. But so I think companies are finding a lot of their pathfinding through traditional use. But at the same time, it's not enough to just go to FDA and say, “well, peyote has been used by Indigenous Peoples for a long time, and so, it's like, let's just approve it.” You know, we're going to have to use that Indigenous knowledge to then drive hard science research, which we can then take the regulators.

Najla Guthrie
Exactly, exactly, Nick. And, you know, for us, when we're looking at research and look at a project, we look at the totality of evidence; it's not just that clinical trial that we're doing, you know, at that point in time. Before we even start that clinical trial, we do a massive search on what's been done, what's the anecdotal evidence, what's out there. And, you know, we build the research and the path forward based on that. So, we look at the totality of evidence that's out there and incorporate it into what we're doing, and what we're rolling out.

Tiffany Kary
Thanks. And I see we just have a couple of minutes left, I'll try to get in one or two last questions. What is the hardest evidence so far, from some of these clinical trials, about the neurological benefits, and maybe those that speak broadly, across a bunch of different conditions, things like repairing damage, reducing inflammation, anything general like that?

Kathryn Walker
I'd say probably the PET scans. The PET scans are probably the big the biggest thing to where people can look at actually different patterns in the brain at the show, you know, after one treatment, there's already substantial growth of the brain. I think that that's probably the that would be the most telling scan that I would think of.

Tiffany Kary
Thank you, that's great. And I guess maybe we'll pop in one more. You know, what's being done really to make sure these medicines will be affordable to all? Are these going to be really expensive medicines, or is this something that could be really widespread?

Nick Kadysh
One thing I will say is, I think almost every single one of the treatments that has gone very far in the clinical process has been an adjunct to psychotherapy. And Kathryn mentioned this in regards to ketamine as well, I think the biggest benefits you see is not just, you're sitting in a room and you take a drug, and then that's it. You know, the biggest benefit is seen when someone is taking these drugs, and then going through relatively intensive therapy. That's how we get the great outcomes. But of course, the therapy comes with one downside, which is, therapists are expensive. So, I know, one hope that I would have, is that eventually we have enough evidence to be able to use some of these drugs in specific ways without therapy, because that would probably decrease some of our costs. But look, at the end of the day, I think the benefits that these bring are well worth the price of entry. You know, the ability to extinguish PTSD, instead of just managing it, papering it over really; having a permanent solution for treatment-resistant depression. Frankly, when you amortise those costs over a lifetime, it's well worth the price of entry.

Najla Guthrie
Exactly. I think that's the key point right there, Nick, is the cost-to-benefit ratio. Yes, they may cost, but you're dealing with the root problem, root cause, and you are not just treating the symptoms. So, in the end, you're saving, you have a huge cost savings.

Tiffany Kary
Great. And I think we can go a couple more minutes, actually. Another question that I think is really interesting, you know, is the drug development and approval in biotech can be, as someone pointed out, a 10-to-15-year process. What kind of challenges do you face in your businesses that make day-to-day decisions and research difficult, given this is such a heavily regulated market, and it's such a long path?

Najla Guthrie
I think, you know, for us, the challenges that we face are on the regulatory front, and also access to manufacturing of these compounds under GMP conditions. So, we have a number of trials that were ready to start for psilocybin, but as Nick mentioned, you don't have readily available pharma grade, to be able to go to the clinical trial with.

Tiffany Kary
I think, Najla, if you can speak specifically, because I think that's such an interesting issue that came up earlier, you know, what is specifically holding up that supply chain? Is it a regulatory issue, is it just that the market isn't developed enough yet, what is it all?

Nick Kadysh
It's everything. It's everything. Yeah, it's everything, Tiffany. It's the fact that there's no company set up for this. It's the fact that like—I’ve got be honest—we make it, we make GMP, MDMA, we supply people for clinical trials, and it's taken a year to get that operation up and running. It's cost a lot of money. And I don't know if I'll really—like, maybe I'll get my money back, but I don't think I'm going to make like a killing on this business. Supplying clinical trials is not a long-term sustainable proposition for anybody. And then not to mention the regulatory issues involved are like mind-bending, and very challenging. So, it's all of the above.

Tiffany Kary
Does anyone have any regulatory wishes they want for the coming year, things they think would help?

Nick Kadysh
I know Najla does..

Kathryn Walker
And that's a big piece that we all need to understand. There's already regulations that exist in the traditional healthcare space, and we need to give them all a facelift as we bring psychedelics in. So, you could bang your head on a table when you talk about regulations. And unfortunately, we're such an overly regulated system that we’re so over regulated, then we have all the drugs on the streets as well. So, the system is just not—it's broken. So, we're fixing the entire system. So, I think when people invest in these companies, do your companies know regulations? Because if they don't, you're going to lose money. Period.

Nick Kadysh
That's it. That’s it. That’s the message.

Najla Guthrie
I think regulatory strategy for companies is the most important, most number one item, you know, as you're looking at it from an investor's point of view. If they don't know the regulatory strategy, they're gone.

Nick Kadysh
Forget about it. Forget about it. Yeah, absolutely. I couldn't agree with you more.

Tiffany Kary
Yeah. Well, thank you all so much. This has been an amazing conversation. And I think it's time that we turn it over to Richard Carlton for his closing.

Mike Van Solen
Thank you. I'm going to jump in real quick, and just say thanks to you, Tiffany. Thanks to Najla, Nick and Kathryn for this wonderful discussion. I was excited before this talk about the potential of psychedelics, and I realize I've now probably underestimated their potential benefits. So, thanks for sharing your all your wisdom, and let me turn it over to Richard Carlton, the CEO of the Canadian Securities Exchange, to deliver more appropriate appreciation remarks. Over to you, Richard.

Note of Appreciation by Richard Carlton, CEO, Canadian Securities Exchange
Thank you very much, Mike. As the CEO of the Canadian Securities Exchange, it is, as you mentioned, my privilege this evening to thank the panelists and moderator for their insight on the opportunities for the use of psychedelic compounds. Najla, Nick, and Kathryn, who, in addition to their day jobs, are advocates and educators in the field, as we look to overcome the stigmas and legal barriers associated with new directions in the use of these new therapies. And I think as we heard from the conversation, we really can't underestimate the challenges that they are facing with policymakers, regulators, and of course, the investor community. But we do have powerful early clinical and anecdotal indicators. So, we are convinced that the journey that they're embarked upon is going to take us to a better place.

I also want to take a moment to thank Tiffany Kary at Bloomberg News for moderating this evening's panel as well. For those of you who don't know, Tiffany was a little shy at the outset, but she is, in fact, the most followed journalist in the cannabis and psychedelic space in North America. She authors The Dose, the blog of record for all developments in the business world each week. And if you track her down and ask her nicely, I'm sure that she'll add you to the subscription list for her weekly summary.

Finally, on behalf of the Canadian Securities Exchange, and our co-sponsor BLG, we thank you, the audience, for taking the time to join us this evening. I've done a lot of Empire Club events, and I have to say this is, especially from the virtual ones, I think the greatest amount of audience participation we've had. So, I think that's a tremendous indication of the engagement. And again, thank you for joining us this evening. I apologize. We were hoping to have this as the first in-person event, post-pandemic. We even were looking at some fancy downtown West Toronto club venues to host the event and, of course, the after discussion social. But, so often in the cannabis and psychedelic space, we were over the bleeding edge with that initiative. In any event, I promise next time, we'll definitely be getting together in person. Thank you again, and have a pleasant evening. Back to you, Mike. Thanks.

Concluding Remarks by Mike Van Solen
Thanks, Richard. Thanks again to the CSE, thanks to BLG, our lead sponsors. And thank you to our wonderful guests this evening for sharing so much. And thanks to all of you watching. Our next event will be on Monday, February 14th, at 12 noon. Join us for a virtual event on “The Future of Health for Black Canadians,” and you'll hear some of those who are trying to make a difference in that space. Important work, and it will also be a great discussion. To learn more about that event, and to find out about complimentary registration, please just go to our website, empireclubofcanada.com. I hope everybody has a wonderful evening. This meeting is now adjourned.

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Psychedelics 101


8 February, 2022 Psychedelics 101