A financial backer of an effort to legalize the drug MDMA for therapeutic use sees significant potential if it receives approval from the U.S. Food and Drug Administration (FDA), potentially as early as this summer.
MDMA: A Breakthrough Therapy
MDMA, commonly known as molly or ecstasy, has already been granted “breakthrough therapy” status by the FDA.
Last month, the nonprofit organization MAPS Public Benefit Corp. submitted a new-drug application to the FDA. This application aims to establish MDMA’s use alongside psychological intervention in treating post-traumatic stress disorder (PTSD). The next step involves a formal review of Phase III trial data by the FDA, with potential final approval expected in around eight months.
To prevent its recreational use as a club drug available on the illicit market, MDMA will only be administered in a therapeutic setting.
The Backer’s Vision for Growth
Cody Shandraw, managing partner of Ambria Capital, has made an undisclosed donation to support MAPS Public Benefit Corp.’s efforts to legalize MDMA.
Shandraw believes that FDA approval for MDMA could come as early as August. The key to the drug’s growth thereafter lies in the availability of therapy centers and trained therapists. Shandraw draws a parallel to Johnson & Johnson’s Spravato ketamine treatment for depression. In 2019, there were less than 100 clinics administering the treatment in the U.S., but now there are around 2,500, according to Healingmaps.com data cited by Shandraw.
Also read: FDA approves Johnson & Johnson’s ketamine-like drug to treat severe depression
Shandraw envisions that by 2024, up to 100,000 patients could receive MDMA treatment, and this number could rise to as many as 750,000 patients in 2025.
“Realistically, it’ll come down to how fast the clinical infrastructure is able to accommodate or renovate those spaces,” Shandraw said. “It’ll grow exponentially after that.”
Investing in Therapy Centers
In addition to his financial backing, Shandraw is also the president of Healing Realty Trust. The trust has plans to acquire properties and secure leases for therapy facilities offering MDMA treatment, as well as ketamine-and psilocybin-assisted therapy.
MDMA Therapy Receives Approval from FDA
The recent approval from the FDA has paved the way for health-insurance providers to offer coverage for MDMA therapy, bringing hope to millions of Americans suffering from Post-Traumatic Stress Disorder (PTSD). This breakthrough treatment will also be eligible for coverage by the U.S. Department of Veterans Affairs, ensuring support for both current and former military personnel.
According to Veterans Affairs, approximately 13 million Americans were diagnosed with PTSD in 2020. The prevalence of this condition is even higher among police officers, firefighters, soldiers, survivors of domestic violence, as well as African Americans, Latinos, and Native Americans.
While the healthcare industry has undergone significant transformations in recent years, behavioral mental health remains one of the last unconsolidated sectors. Traditional hospital infrastructure has taken a backseat to the growth of outpatient services, urgent-care centers, and dialysis centers. Much like these changes, MDMA therapy is also expected to move towards freestanding clinics as the preferred point of care rather than relying solely on treatment in hospitals.
The FDA’s approval of MDMA therapy has sparked optimism within the psychedelic drug industry. Experts believe that this milestone could serve as “the tip of the spear” for other psychedelic treatments, such as psilocybin-mushroom therapy being developed by Compass Pathways and LSD therapies for anxiety by MindMed.
Ambria Capital, along with other investors, has been actively supporting numerous companies involved in the development of alternative therapies. The growing interest and investment in the space have been substantial. As reported by the Financial Times, the 73 largest psychedelic-drug companies have raised a staggering $3.26 billion in capital, with a majority of the funding allocated towards drug development. However, there remains a need for increased investment in therapy facilities and practitioners, as only a fraction of this capital has been dedicated to clinical infrastructure.
The journey towards MDMA’s legalization and its integration into mainstream therapies, including Phase III trials, has already cost MAPS Public Benefit Corp. over $100 million. This significant investment underscores the importance and potential of MDMA therapy in transforming the lives of individuals suffering from PTSD.
Also read: Why the founder of the shoe brand Toms is pledging $100 million to psychedelic research
