If anyone had suggested only a few years ago that it is a realistic proposition to float a psychedelics company on any of the London markets, that suggestion would likely have been met with derision. Commentators would have pointed to a lack of understanding and therefore acceptance of psychedelics in the investment community and to potential problems under the Proceeds of Crime Act 2002 (POCA).
However, times are changing. First, the Financial Conduct Authority (FCA) has given guidance about floating medicinal cannabis companies and we believe (for the reasons set out later) that the guidance can be applied to psychedelics companies. Secondly, in the last few years, there has been a growing awareness of how widespread mental illness is and also of the potential of psychedelic drugs to treat certain mental illnesses effectively. For evidence of psychedelics’ journey towards the mainstream, one needs to look no further than the success of the Netflix series “How to change your mind” or the fact that in late November 2022, there was a lengthy article about psilocybin in The Sunday Times magazine. Finally, an ecosystem of leading academic research and expertise in clinical trials has developed in the UK and elsewhere, led in the UK by institutions such as Imperial College London and King’s College London.
It is reasonable to assume that the investment community will recognise these points and we, therefore, consider that there may well be an opportunity for psychedelics companies to carry out an IPO on one of the UK markets. Investment into UK-based psychedelics ventures, typically led by newly established specialist funds and private family offices, is starting to gather pace, although listings of such businesses have so far taken place only in the US (such as Compass Pathways on NASDAQ) or Canada (such as Small Pharma on the TSX-V).
What Are Psychedelics?
Readers of this article are likely to be more qualified than me to answer this question, but (in summary) “psychedelics” are a class of psychoactive substances, that is, a substance that can produce a psychoactive effect in a person who consumes it. There is a psychoactive effect in a person if, by stimulating or depressing the person’s central nervous system, a substance affects the person’s mental functioning. In other words, a substance causes a psychoactive effect in a person if it produces temporary changes in perception, mood and cognitive processes which affect all the senses. The psychedelic that is most often referred to is psilocybin, which is the active ingredient in (so-called) “magic mushrooms”. However, that is by no means the only psychedelic. Other examples include LSD, mescaline, ayahuasca, MDMA (the “ecstasy” drug), and a derivative of ketamine. Psilocybin can also be synthesised: that is, produced in a laboratory.
