Reunion secures $100M+ for improved psychedelic drug development

Reunion Neuroscience, a company focused on developing psychedelic drugs for mental health treatment, recently raised significant funds to advance its research. Leading the Series A funding round were MPM Capital, the biotech investment firm that privatized Reunion last year, and Novo Holdings, parent company of pharmaceutical giant Novo Nordisk. Additional participants included Arkin Bio Ventures, Mitsui & Co. Global Investment, Plaisance Capital, FemHealth Ventures, and Palo Santo, collectively contributing $103 million.

This new funding aims to support a mid-stage clinical trial for Reunion’s foremost experimental drug, RE104, targeted at postpartum depression in women. The company plans to begin participant enrollment by the end of June and anticipates obtaining results by the second quarter of the next year.

Reunion’s RE104 is essentially a synthetic version of psilocin, a compound found in psychedelic mushrooms. The field of psychedelic drugs has been progressing, overcoming previous legal, scientific, and regulatory hurdles, which has drawn increasing investment from biotechnology firms. For instance, in 2020, Compass Pathways raised nearly $150 million through an IPO to further their research on psilocybin, another compound found in mushrooms, for treating conditions like PTSD and depression. Similarly, Incannex Healthcare saw a rise in their stock value following a study showing psilocybin’s efficacy in treating generalized anxiety disorder. Cybin, another company in this domain, secured $150 million in March by selling stock to selected investors.

The pharmaceutical industry is not new to psychedelics; however, to build profitable ventures, companies are modifying these compounds or creating synthetic versions that can be patented. RE104 is designed to induce a shorter psychedelic experience, which could be beneficial in terms of time and resources required for treatment, aligning with recent draft guidelines from the FDA. The FDA highlighted the need for safety monitoring during psychedelic sessions, noting that patients can remain in a vulnerable state for up to 12 hours, necessitating the presence of two healthcare providers during treatment.

Reunion highlights that RE104 requires only about half a day in the clinic, a notably shorter duration compared to other psychedelics like psilocybin and MDMA. In early-stage studies, RE104 demonstrated a psychedelic effect comparable in intensity to psilocybin but lasted only three to four hours, roughly half the time required for psilocybin.

RE104, like other drugs in Reunion’s portfolio, targets a protein known as the serotonin 2A receptor, which is linked to learning, memory, and various mental disorders. This receptor is also the site where psychedelic drugs exert their hallucinogenic effects. Natalie Sacks, a venture partner at Novo Holdings, expressed optimism about RE104’s potential, emphasizing its promise in improving outcomes for patients with limited treatment options.

Beyond postpartum depression, Reunion is also exploring the potential of RE104 in treating other neuropsychiatric conditions, such as adjustment disorder in cancer patients. This disorder is defined by a maladaptive response to a cancer diagnosis lasting over two weeks and being disproportionate to the stressor’s magnitude. According to Reunion, about 40% of cancer patients develop mood disorders.

The recent financing marks a significant turnaround for Reunion, which was on the brink of violating Nasdaq’s minimum share price requirements two years ago. Initially operating as Field Trip Health, the company split in April 2022, with drug discovery activities rebranded as Reunion and its healthcare business continuing as Field Trip Health and Wellness. Following the split, Reunion consolidated its shares on a 5:1 basis to comply with Nasdaq regulations. However, by May 2023, Reunion agreed to sell to MPM in an all-cash deal valued at just over $13 million.