Big Pharma’s $1.2 Billion Psychedelics Acquisition is Just the Beginning
Four more opportunities to profit from Big Pharma’s Psychedelics Buying Spree
Last week, there was much excitement about the historic achievement in the epic of Gilgamesh Pharma, and indeed for the psychedelic mental health ecosystem as a whole.
True to its namesake, the team at Gilgamesh has accomplished a series of astounding achievements culminating in the recently announced acquisition of its lead program - the novel psychedelic Bretisilocin - for US$1.2B by big pharma and recognized CNS leader AbbVie (NYSE: ABBV). This moment is hard to overstate and has been decades in the making.
While there has been promising market validation in the psychedelic sector before - for instance, Otsuka’s (OTCBB: OTSKY) $58 million acquisition of MindSet - the blockbuster big pharma M&A, the hallmark of success in biotech, remained elusive. Until now.
AbbVie’s billion-dollar commitment is the formal recognition by the best of big pharma, and by extension the medical establishment, of the potential for psychedelic medicine as a bonafide treatment for mental health. Moreover, it is the recognition of a new paradigm in medical treatment, first validated by Johnson & Johnson’s (NYSE: JNJ) Spravato and its more than $1 billion in sales. And it’s only the beginning, because the story doesn’t end with this recent $1.2 billion deal with AbbVie.
You see, in addition to that deal, which has AbbVie taking the lead asset, the rest of Gilgamesh now spins into a newco with the team, the cash runway, and the remaining programs intact. That creates a rare “second bite” on a proven platform for investors who missed out on the AbbVie acquisition.
** By the way, if you are interested in getting some of this “second bite,” you can complete this form to see if you qualify to take part. **
Now the new SpinCo’s pipeline is no slouch, as it represents some of the most innovative drug development in the world for massive underserved metal health markets. And each category has the potential for its own blockbuster-level takeout.
Blixeprodil (GM-1020): NMDAR Antagonist and Spravato-Killer.
Despite a slow start and suboptimal properties, Spravato achieved blockbuster status with over US$1B in revenue in 2024. Like Spravato, Blixeprodil is a rapid acting antidepressant but is also everything Spravato wished it was: Orally bioavailable, clean long-lasting IP, and low dissociation, making it potentially suitable for at-home use. Expect an even bigger price tag than Bretisilocin due to its plug-and-play interoperability with the Spravato ecosystem, and double it for take-home use. This one is right behind Bretisilocin in the clinic, Phase II, and poised for a near-term transaction.
Non-hallucinogenic Neuroplastogens.
Significant near term milestones under the previously negotiated US$2B deal with AbbVie are still on the horizon and rapidly moving towards the clinic. These compounds, delivering strong clinical efficacy without hallucinations fit the traditional pharma distribution paradigm and demand the highest acquisition prices. The $2B deal may be on the low end: recall the $14B J&J paid for Intracellular, the $8.7B AbbVie paid for Cerevel and the $14B Bristol Myers Squibb (NYSE: BMY) paid for Karuna.
GM-3009: Safer Ibogaine Analog.
Substance use, and in general addiction, is a leading killer of our time - and nothing seems to work as well to treat these conditions as the traditional psychedelic, Ibogaine. Unfortunately it suffers from low clinical viability due to its strong cardiotoxicity and long, strenuous psychedelic trip. Now enter the drug development expertise at Gilgamesh. Similar to the enhanced design of psilocybin with Bretisilocin, the Gilgamesh team is removing the cardiotoxicity and improving the drug properties of ibogaine in its GM-3009. This program is nearing the clinic and should it prove effective, would be one of the largest most ground-breaking developments in psychiatry - ever.
M1/M4 agonist: Schizophrenia.
Just announced, Gilgamesh has another trick up its sleeve. Following on the success of Karuna KarXT (recall the US$14B deal with BMY) and ML-007 by Maplight (which just closed a recent $372.5 million Series D financing), the M1/M4 dual targets for schizophrenia are garnering increasing attention. Here again Gilgamesh leads the way with a single agent oral molecule with reduced peripheral side effects.
Indeed, the recent $1.2 billion deal struck with AbbVie is just the beginning for Gilgamesh. And of course, we will continue to report on any new developments on Gilgamesh. If you’d like to learn more about why we initially invested in Gilgamesh, and how we see the company’s future playing out, feel free to contact us at info@jls.fund.