Entheon Biomedical: Inverting the Expectations for Addiction Therapy

Introduction

They tried to make me go to rehab…

In parallel with COVID; substance abuse is a global pandemic that wreaks havoc on the minds, lives, and well-being of every socioeconomic strata of people. Addiction destroys the lives and shatters the families of 21 million Americans. Drug overdose deaths in the United States have more than tripled since 1990, and over 480,000 deaths every year can be attributed to smoking cigarettes [1]. Yet, adequate treatment for substance abuse disorders are in short supply (actually that’s an understatement). There is no supply. Addicts are shipped off to for-profit rehabilitation centers at the behest of psychiatrists, friends and family. These rehab centers are giant scams, luring the downtrodden into their wards with promises of luxury accommodations and a competent staff that will do whatever it takes to help the patient kick their addiction. In reality, rehab centers are designed to keep the addict inside as long as possible to bill their insurance and encourage recidivism to hit the insurance agency with a one-two punch. Their main goal is to keep the patient alive long enough to bleed them (and their insurance) dry, and they do so by prescribing “comfort meds” to make the addict’s withdrawals just tolerable enough to keep them breathing. Clearly, there is an enormous unmet medical need for an effective treatment for substance abuse that obviates these centers and addresses the molecular and psychological basis of addiction. Enter Entheon from stage left.

A personal connection

Timothy Ko, CEO of Entheon Biomedical, has personally experienced the therapeutic power of psychedelic medicines,  having used them to address his own past traumas. Experiencing the limitations of standard talk therapy, Mr. Ko realized that he needed access to the elements of his subconscious that encoded his trauma response and kept him in a state of anxiety and depression. Timothy’s personal narrative is heartbreaking, having recently lost his brother to substance abuse that was inadequately treated over the last 20 years. The standard panel of opiate mimetics, benzodiazepines, antipsychotics, and mood stabilizers were thrown at his brother like darts at a dartboard. This is not a one-off case study, this is the state of psychiatry. Something must be done to create a targeted approach to treating addiction and mental illness that is predicated on an understanding of the molecular mechanisms in the brain that lead to these states of being. Ultimately, addiction is a complex diagnosis with many personal and environmental factors underlying addictive tendencies and behaviors. Timothy believes that he has the answer, and it has existed in nature since the dawn of time.

"DMT allowed me to access the walled off portions of my narrative and emotional composition, and helped me immensely."

- Timothy Ko, CEO, Entheon Biomedical

Dimethyltryptamine: the “Spirit Molecule”

What is DMT?

Dimethyltryptamine (DMT) is a naturally occurring molecule that is synthesized from the amino acid tryptophan. This molecule is produced in many animals and plant species. Perhaps the most well-known psychedelic compound is ayahuasca, a hallucinogenic brew containing two components, an MAOI, such as the Banisteriopsis caapi vine and a DMT containing plant, such as the Psychotria virdis shrub. Indigenous to the Amazon jungle, ayahuasca has been used in ancient shamanic practices for hundreds of years (read our intro article on psychedelics here) to treat and remedy “diseases of despair”. Ayahuasca “trips” are extremely powerful compared to other psychedelic substances such as psilocybin and LSD, and can induce physical discomfort (often referred to as “purging”) and strong mental effects. When used for medicinal purposes, ayahuasca can be a gateway into the subconscious, allowing the “patient” access to past traumas that have yet to be dealt with.

What do we know about DMT?

DMT is an endogenous substance, meaning that it is found naturally in the body. The concentrations of DMT in different tissues has been well-characterized, but we still do not understand how a supra-physiological dose (a dose much higher than the natural levels) elicits a shift in conscious perception. DMT was first synthesized by the Canadian chemist, Richard Manske (1931), but it wasn’t until 1956 that the molecule’s psychedelic properties were discovered. Stephen Szara, a revolutionary Hungarian chemist and psychiatrist, extracted DMT from the Mimosa hostilis plant and injected himself intramuscularly. The effects were noteworthy, to say the least. DMT’s chemical structure is very similar to serotonin and has been shown to compete for serotonin receptors that bind in the brain (and possibly throughout the rest of the body, like the gut), and elicits a change in consciousness through those pathways [2].

The discovery of an enzyme called indole-N-methyl transferase (INMT) in the rat brain allowed researchers to infer the biochemical synthesis of DMT that is found naturally in the body [3].  Researchers by the name of Juan Saavedra and Julius Axelrod were able to determine that tryptamine is converted to DMT in rat brain tissue by INMT. Interestingly, this INMT enzyme is found in other bodily tissues, implying that DMT synthesis is not solely relegated to the brain [4]. The fact that DMT is a naturally synthesized molecule that plays a role in human physiology suggests that dysregulation of DMT synthesis or signaling (almost certainly through serotonin receptors, but very likely through other signaling pathways as well [5]) may lead to pathologic mental conditions, such as schizophrenia, bipolar, borderline personality disorder, and addictive tendencies. We can come to a better understanding of the role of DMT in the body, and its potential as a therapeutic agent, by examining the pharmacology of exogenous (administered) DMT and identifying the receptors it binds to. This logic is similar to how researchers discovered the body’s pain mechanisms by administering synthetic opiates. In order for DMT to be used as an effective therapy for mental illness and addiction, we must have a better understanding of how the molecule functions in the body and brain and be able to tie this mechanism of action to clinically-relevant changes in the brain.

The psychedelic experience

DMT users report a replacement of the normal conscious experience with an “alternate universe” populated with complex visual and auditory content, including what may be interpreted as sentient “beings.” Sound scary? It can be, but the experience also has the possibility to shift the “normal” state of perception and force the individual to contend with their new reality using a new set of tools. Psychedelics in general increase the user’s sensitivity to all stimuli, from visual and auditory to inner emotional. Within minutes of dosing, the user’s pupils begin to dilate, taking in more light and visualizing the world at higher resolution. Colors become brighter, taste and smell are amplified, and the senses may even cross in a phenomenon known as “synesthesia” (e.g., you may taste the color purple). Psychedelics have been used for centuries as medicine in shamanic practices across the globe, and there is a tremendous wealth of anecdotal experience and clinical research that supports their use to treat depression and other emotional disorders. Long-term ayahuasca use has been shown to produce marked improvement in depressive symptoms for up to 21 days after a single dose [6], and two papers published in 2019 support the use of ayahuasca as a treatment for treatment-resistant depression and addiction [7,8]. Since DMT is the active ingredient in ayahuasca, it stands to reason that clinically administered and precisely dosed DMT could have a tremendous impact on the state of psychiatric care.

Entheon’s Innovation

Entheon Biomedical’s psychedelic therapy and drug discovery platform is expanding into a new dimension in addiction treatment. The core of their technology rests on predictive analytics to indicate an individual’s reaction to psychedelic treatment. Utilizing an artificial intelligence and machine learning platform constructed by analyzing existing data and real time electroencephalogram (EEG) analysis of brain signaling while DMT is administered at precise doses and intervals, Entheon is constructing a “DMT Biomarker Model” to predict acute responses to DMT therapy. This predictive analytics platform will be able to infer neuro-state changes based on EEG data during the uptake of DMT with the purposes of guiding drug dosage levels and delivery during the treatment process. Put simply, Entheon Biomedical is employing a data-driven approach, utilizing the latest advancements in EEG technology, in order to develop an individualized DMT therapy that emphasizes safety and efficacy. In addition, the company has acquired a pre-screening test reliant on genetic markers to screen patients for underlying psychiatric conditions before receiving any treatment. I cannot stress enough how badly the field of psychiatry needs Entheon’s technology. The #1 failure of the entire field of psychiatry is a lack of quantitative, data-driven analysis of what mental illnesses actually are. Psychiatry is barely even medicine, it is a soft science that is not reliant on the same level of rigor as other fields of medicine. If you have ever visited a psychiatrist you know that they will write you a script for Zoloft within five minutes of meeting you with absolutely no tests performed. Contrast that with almost any other field of medicine.

"Suboxone, methadone, antidepressants, anxiolytics, antipsychotics, mood stabilizers, as well as every therapeutic modality, 12 step, etc.. None of it was able to access and address the core traumas that underpinned his addiction, but rather managed and treated symptoms, often adding layers of obscurity over the core issues."

- Timothy Ko, CEO, Entheon Biomedical

Entheon Biomedical is developing a platform to characterize mental illnesses on a biological and genetic level and then determine the appropriate course of treatment using hard data driving predictive analytics. Their approach is exactly what is needed to upend the entire space and introduce a completely new addiction treatment paradigm.

The Entheon Advantage

Partnerships

One of Entheon’s strengths is the number of partnerships that they have formed in the sector. On January 4, 2021, Entheon announced an investment and business arrangement with Heading Health, a psychiatric clinic platform focused on psychedelic-assisted therapy. The investment in Heading Health will provide Entheon with data pertaining to  ketamine therapy (another psycho-therapeutic compound), and the opportunity to incorporate this information into their expanding bio-marker platform to improve patient outcomes to psychedelic therapy. In December of 2020, Entheon made a strategic investment in Wonder Scientific, a manufacturer of custom psychedelic agents. This investment not only provides Entheon with exposure to other verticals in the psychedelic therapy space, but access to psychoactive ingredients and additional research “manpower” as the company expands its drug discovery platform. Both of these plays indicate that Entheon expects to grow beyond DMT therapy alone and has plans to integrate fully into the sector by gaining first-hand experience in psychedelic manufacturing and drug development.

Exposure

Entheon has marketed their company by engaging Star Finance GmBh to provide investor relations services in Europe. Star Finance has 15 years of experience assisting Canadian public companies with introductions to investors and publicly disseminating information about early-stage investment opportunities via their website, newsletters, and social media channels. In early 2021, Entheon engaged the world-renowned media personality “DJ Skee” as their media advisor, building the company’s brand and establishing itself in the merging fields of psychedelic medicine and addiction treatment. It is clear that Entheon’s management understands how important media exposure is in supporting a public stock. The company has many upcoming catalysts in 2021 that need to be widely publicized for early investors to get the credit they deserve for believing in the company’s core technology and values.

All-Star team

• ‍Timothy Ko, Chief Executive Officer - Timothy Ko has a background of leading private ventures in the Service Sector, Investor Relations, Retail and Technology. Timothy’s passion for the psychedelic space is shaped by firsthand knowledge of the shortcomings of the current mental health system, and through his exposure to psychedelics which he credits with saving his life.
• ‍Andrew Hegle, Ph.D. , Director of Operations - Dr. Andrew Hegle has been an adjunct professor of Pharmacology at the University of British Columbia since 2015. He has a background in molecular biology and biochemistry and has published research investigating the role of membrane receptor proteins in physiology, behavior and disease. Dr. Hegle’s main professional focus has been in the creation and management of laboratory operations. To that end, he has held executive and operational management positions at several biotechnology companies, and was a cofounder of both Cannevert Therapeutics and Canalytic Laboratories in Vancouver. ‍
• Christopher Gondi, Ph.D., Board of Directors - Dr. Christopher Gondi is a Research Assistant Professor - Departments of Medicine, Surgery and Pathology at the University of Illinois, College of Medicine, Peoria. He is a professor of cancer biology and has extensive experience dealing with brain tumors and pancreatic cancer, for which the survival rates are very low. Knowing firsthand the difficulty many face as they approach the end of their lives, Dr. Gondi seeks to explore the therapeutic benefits of psychedelics in helping patients reconcile their views and prepare for whatever exists beyond life. He also sees the transformative potential of these drugs in positively affecting the lives of those suffering from substance use disorders.‍
• Jonna Birgans, Vice President, Digital Experiences   A seasoned media professional who has worked both as a Producer and an Executive for over two decades, Mrs. Birgans has created programming strategies and produced exclusive content for fortune 500 companies like Walmart, Best Buy, Taco Bell as well as major US airports. For Television Mrs. Birgans has created original programming as well as interactive digital content for powerhouse entertainment brands such as The Game Show Network, Studios USA, MTV/ Viacom, Animal Planet and Billboard Music. Mrs. Birgans has also Produced numerous music videos for record labels like Warner Music Group, SONY, Universal Music Group and So So Def. In gaming, Jonna spearheaded FANDOM SPORTS, now FANDOM ESPORTS, a Canadian Public Company, as President, Chief Content Officer and Director, naming and launching the interactive sports app. ‍
• Yaron Eshel, Project Manager - Yaron Eshel has 15 years of experience in Life Sciences innovation. Having led efforts in product development, regulatory compliance, and operations, Mr. Eshel has worked within start-ups as well as having consulted for them. He has navigated the US, European, Israeli and Australian regulatory agencies including the registration of manufacturing facilities in the US, Central America, Israel and Australia to Good Manufacturing Practice levels. Mr. Eshel has led clinical trials in the US, Europe and Israel as well as worked with CRO's all over the world.‍
• Ruth Chun, M.A., J.D., independent director and member of the audit committee. - A corporate commercial lawyer focused on advising regulated businesses in the cannabis, psychedelics and technology industries, prior to founding Chun Law Professional Corporation, Ms. Chun was the general counsel and corporate secretary for Newstrike Brands Ltd. / Up Cannabis Inc., and senior legal counsel at HEXO Corp. through its acquisition of Newstrike in an all share deal valued at $346 million. Ms. Chun joined Newstrike in February 2017 and was involved in all significant corporate activity including a successful TSXV listing, debt and equity financings (exceeding $140 million), M&A, regulatory matters and government relations. She is regularly called upon as a speaker, industry expert and guest lecturer at various colleges and universities. Ms. Chun currently serves on several boards and is the chairperson of SAVIS of Halton. She served as the first female executive at a leading insurer in southern Africa as the head of legal and compliance and was a partner at Africa’s largest law firm. Previously, she chaired Rio Tinto’s pension fund for Rössing Uranium Mine and was a trustee of the Alexander Forbes umbrella group of funds. She received an Hon BA (Trinity College), MA from the University of Toronto and Juris Doctor from Queens University. She is called to the bar in Ontario, New York and Namibia. ‍
• DuMoulin Black, Corporate Finance / M&As - Founded in 1966, DuMoulin Black has counselled hundreds of companies on the successful structuring and coordination of their corporate finance requirements and M&A needs. Having a strong relationship with investors, regulators, stock exchanges, underwriters and various industry professionals, DuMoulin Black is a trusted and effective legal partner with the track record and reputation required to navigate the modern day legal and corporate environment.
• Zuber Lawler, Patents & IP - Zuber Lawler is one of the most selective law firms in the United States, with 40-plus attorneys representing clients throughout the world from offices in Chicago, Los Angeles, New York, and Silicon Valley. Our clients include more than 15 Fortune 500 clients, as well as funds and government entities. Primary practice areas include IP, regulatory work, class actions and M&A, both domestically and across languages and borders throughout the world. Zuber Lawler has attorneys trained in both common and civil law systems.

Key opinion leaders in psychedelic medicine and therapy

A key determinant of a research/clinical-stage biotech company’s probability of commercializing their research is the breadth and depth of their advisory board. Scientific advisors and regulatory consultants play a heavy role in designing and executing clinical trials. Entheon has done a superb job of curating a robust advisory board and suite of consultants.

• Professor Matthew W. Johnson, Ph.D. (Scientific Advisor) - Professor of Psychiatry and Behavioral Sciences at Johns Hopkins, and an expert on psychoactive drugs and addiction; Working with psychedelics for 16 years, he published psychedelic safety guidelines in 2008, helping to resurrect psychedelic research.
• Robin Carhart-Harris, Ph.D. (Scientific Advisor) - Dr. Carhart-Harris heads the Psychedelic Research Group within the Centre for Psychiatry at Imperial College, London, where he has designed a number of functional brain imaging studies with psilocybin (magic mushrooms), LSD, MDMA (ecstasy) and DMT (ayahuasca), plus a clinical trial of psilocybin targeting treatment resistant depression; over 50 published papers.
• Dennis McKenna, MD (Scientific Advisor) - Ethnopharmacologist, research pharmacognosist, lecturer and author. He is the brother of well-known psychedelics proponent Terence McKenna and is a founding board member and the director of ethnopharmacology at the Heffter Research Institute. As advisor to Entheon, he brings with him decades of research and insight.
• Christopher Timmermann, PhD Candidate (Scientific Advisor) - Psychologist educated at the Catholic University of Chile with a Masters in Neuroscience and Neuropsychological Therapy from the University of Bologna. His research focuses on the effects of DMT in the human brain.
• Kenneth W. Tupper, PhD (Advisor of Ethics) - Adjunct Professor in the School of Population and Public Health at the University of British Columbia, and active in the field of psychedelic studies for more than fourteen years; M.A. thesis and Ph.D. dissertation that developed the concept of "entheogenic education," a theoretical frame for understanding the kinds of learning that can be realized through the circumspect uses of psychedelics as cognitive tools.
• Michael Walker, MD (Scientific Advisor) – Received pharmacology training at the University of London, which included a period of drug discovery training at Pfizer Ltd., (UK); Over the past 25 years, Dr. Walker was the founder or co-founder of eight different drug discovery companies, both public and private, including Cardiome Pharma (TSX:COM) in Canada and Verona Pharma Ltd. in London.

MedicalGold’s Analysis

Investment analytic framework

When researching an investment opportunity in early-stage biotech, we look for:

• A stock that is flying under the radar at a suppressed valuation
• A well-defined trajectory and clear catalysts over the next 6 to 12 months
• A tight share structure and ownership by insiders/management (skin in the game is crucial regardless of market sector)
• Seasoned management with a track record of success in raising capital, preclinical and clinical-stage research, and corporate development in the biopharma space
• A defensible patent portfolio and other barriers to duplication
• Ability to disrupt a growing market segment with state-of-the-art innovation

Upcoming catalysts

Market and innovation

Psychedelics are finally being revisited after facing social stigma and government pushback. In 2020, Oregon became the first state to decriminalize psychedelics and legalize psilocybin therapy. Washington, DC, California, and New Jersey are ready to follow suit. Canada’s Health Minister granted exemptions to allow access to psilocybin-assisted psychotherapy.

Advanced research in the field has already resulted in a psilocybin therapy aimed at treating depression and a MDMA treatment for PTSD receiving the FDA’s Breakthrough Therapy designations. Clearly there is an opportunity for the first DMT-based therapy to do the same.

There are also a number of significant upcoming clinical trial milestones in the space (read more about ongoing psychedelic studies).

Significant clinical trial milestones are on the horizon; The Multidisciplinary Association for Psychedelic Studies (MAPS) is posed to complete the first MDMA study for PTSD this year. MAPS recently raised $30M to advance through FDA clinical trials [9]. Two other trials for psilocybin as a treatment for depression are in Phase 2. In December of 2020, UK Regulators allowed the World’s first DMT treatment for depression clinical trial. A number of DMT and ayahuasca trials are ongoing in the USA and UK. The clinical applications of DMT are vast and there is great opportunity for multiple psychedelic companies to create DMT-assisted therapies for a variety of mental health disorders.

Highlights

• Entheon is trading at $0.87 CAD as of market close on Tuesday Feb 9, 2021. The company’s market cap is $45M CAD. We believe that Entheon is on the verge of shifting the conversation in the medical psychedelic sector from naturally derived psilocybin to chemically synthesized DMT as a potent treatment for all types of mental disorders. The stock could easily double by the end of 2021 once their Phase 1 clinical trial completes with positive safety data. Given the historical use of DMT for thousands of years, there is a strong likelihood that Entheon’s data-driven dosing strategy will result in no adverse effects in patients.
• Entheon’s milestones are well-delineated and achievable within the next 12 months. See Upcoming Milestones & Catalysts section below.
• Entheon has a relatively tight share structure with ~52 million shares issued and outstanding, which equates to a C$45 million market cap at a C$.87 share price. Entheon also has C$5.6 million in cash.
• Entheon’s management team and advisory board could not be more impressive. The C-suite brings a wealth of experience running Small Pharma companies and their advisors round-out the team with their expert knowledge of the biochemistry of psychedelics. Importantly, the advisory board has experienced regulatory consultants who have designed and executed human clinical trials.
• Entheon is in the process of building their patent portfolio which will be predicated on the data acquired in their Phase 1 trial.
• Medical psychedelics as an industry are posed to completely revolutionize mental health treatment. The first approved DMT treatment for addiction, depression, bipolar, and other emotional disorders will be a multi-billion dollar product. The standard of care is absolutely abysmal. SSRIs (e.g., Zoloft) are not effective in many patients and are the most widely prescribed drugs for the last 40 years. It’s about time that mental health treatments are revisited and flipped upside down.

References

[1] https://www.addictioncenter.com/addiction/addiction-statistics/

[2] Keiser, M. J., Setola, V., Irwin, J. J.,Laggner, C., Abbas, A. I., Hufeisen, S. J., et al. (2009). Predicting newmolecular targets for known drugs. Nature 462, 175–181. doi:10.1038/nature08506

[3] Axelrod, J. (1961). Enzymatic formationof psychotomimetic metabolites from normally occurring compounds. Science 134,343–344.

[4] Cozzi, N. V., Gopalakrishnan, A.,Anderson, L. L., Feih, J. T., Shulgin, A. T., Daley, P. F., et al. (2009).Dimethyltryptamine and other hallucinogenic tryptamines exhibit substratebehavior at the serotonin uptake transporter and the vesicle monoaminetransporter. J Neural. Transm. 116, 1591–1599.

[5] Ray, T. S. (2010). Psychedelics and the humanreceptorome. PLoS ONE 5:e9019. doi: 10.1371/journal.pone.0009019

[6] Osório, F., Sanches, R., Macedo, L., dosSantos, R., Maia-de-Oliveira, J., Wichert-Ana, L., et al. (2015).Antidepressant effects of a single dose of ayahuasca in patients with recurrentdepression: a preliminary report. Rev. Bras. Psiquiatr. 37, 13–20.

[7] Palhano-Fontes, Fernanda et al. “Rapidantidepressant effects of the psychedelic ayahuasca in treatment-resistantdepression: a randomized placebo-controlled trial.” Psychological medicine vol.49,4 (2019): 655-663. doi:10.1017/S0033291718001356

[8] Argento, E., Capler, R., Thomas, G., Lucas, P.and Tupper, K.W. (2019), Exploring ayahuasca‐assisted therapy for addiction: Aqualitative analysis of preliminary findings among an Indigenous community inCanada. Drug Alcohol Rev., 38: 781-789. https://doi.org/10.1111/dar.12985

[9] https://maps.org/news/media/8276-press-release-psychedelic-research-fundraising-campaign-attracts-$30-million-in-donations-in-6-months,-prepares-mdma-assisted-psychotherapy-for-fda-approval

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Disclosure

Author owns Entheon Biomedical shares at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing services by Entheon Biomedical.