Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF)’s wholly-owned, Canadian-based psychedelics company Halucenex Life Sciences Inc has started stability testing initiatives for its Good Manufacturing Practice (GMP) grade psilocybin.
This marks a critical component for the company’s planned phase II clinical trial and future drug development initiatives, which have been buoyed by a recently released report from the Therapeutics Goods Administration (TGA).
The report concerned evaluating the therapeutic value, benefit and risks associated with the use of psilocybin and MDMA for the treatment of mental health conditions. This report may result in the rescheduling of psychedelic treatments from schedule 9 (prohibited drug) to schedule 8 (controlled).
Investors have shown their support for Creso’s next stage of testing and the TGA report findings, prompting a 15% increase in shares to an intraday high of A$0.115
Potential Australian opportunities
The TGA report marks a shift in attitudes toward psychedelic treatments in Australia which Creso Pharma plans to leverage for local expansion initiatives in the near term.
“The recently published report from the TGA highlights the ongoing shift and acceptance towards the use of psychedelic substances as alternative treatment routes and coincides with a pivotal step in the company’s USP 61 and USP 62 testing initiatives,” CPH non-executive chairman Adam Blumenthal said.
“The report highlights that both psilocybin and MDMA have potential therapeutic benefits when used in the correct setting. We are confident that the data generated through our planned phase II clinical trial will also echo this claim.
“The management team has been exploring potential opportunities in the Australian market for some time and the TGA’s recent announcement validates the potential opportunity that Creso Pharma has at its disposal in Australia.
"We look forward to its final decision and leveraging this to progress a number of domestic opportunities which have the benefit to unlock considerable value for shareholders.”
Validation of GMP grade psilocybin
Stability testing carried out by Halucenex – with the aid of leading R&D partner Nucro-Technics – will determine if the quality of a substance or drug is altered over time by various environmental factors including light, temperature and humidity.
Testing will take three weeks, representing an important step in drug development. Halucenex will test a range of samples over a seven and 14-day period to ensure its psilocybin product is fit for human consumption.
The data generated from the trial will allow Halucenex to progress its Clinical Trial Authorisation (CTA) with Health Canada, allowing the commencement of the company’s planned phase II clinical trial into the efficacy of psilocybin when used for treatment-resistant Post Traumatic Stress Disorder.
“Stability testing is an important part of our USP 61 and USP 62 protocol work, as well as future drug development and one of the final steps that need to be undertaken to finalise our documentation for Clinical Trial Authorisation,” Halucenex founder and CEO Bill Fleming said.
“Given the excellent quality of our psilocybin, we anticipate that the company will witness positive results from the rigorous testing protocols, and we expect that the data generated will assist in a number of future initiatives.
“Halucenex continues to make pleasing operational progress, while simultaneously exploring additional opportunities to drive growth. We look forward to providing additional updates on results and as other developments materialise.”
The data captured from the initiative will also be crucial for future drug and product development initiatives containing Halucenex’s GMP grade psilocybin.
The company expects to update the market in the coming weeks, upon completion of the testing protocols and subsequent results.
Aims to capture material market share
The TGA report highlights the potential therapeutic uses of psilocybin in a closely supervised clinical setting with intensive professional support to treat treatment-resistant mental illnesses, especially Post Traumatic Stress Disorder, major depressive disorder and generalised anxiety disorder.
This report will be reviewed by the Advisory Committee on Medicines in a potential move to down-schedule psilocybin and MDMA from schedule 9 to schedule 8. The Committee will assess the therapeutic value, risks and benefits to public health outcomes for these substances before it makes its decision, which is expected in December 2021.
The report involved a systemic literature review undertaken by an independent panel of experts to review the treatment of mental health conditions and highlights the shifting attitudes toward evolutionary therapies. Medicinal cannabis was down-scheduled to schedule 8 (controlled substance) in 2016 following a similar review.
Creso is already exploring a number of Australian-based R&D and clinical trial initiatives, which it will pursue based on a favourable shift in legislation.
The company aims to capture a material share of the Australian market as a first-mover by leveraging its already large body of evidence for the use of psilocybin as an alternate treatment to create opportunities locally. If successful, the company has the potential to unlock considerable value for shareholders in the local market.