Article: Intellectual Property Due Diligence in Psychedelics

IP Due Diligence in a Psychedelics Transaction: An Evolving Rulebook

By Jayashree Mitra, Ph.D., Partner, Fox Rothschild LLP


The market for psychedelic substances is projected to grow rapidly, potentially outpacing the legal US cannabis market. But evaluating the promise, and the risk, of a psychedelics IP portfolio is still mired in unknowns.  What should investors be looking for in this nascent industry?

Unlike novel chemical compounds that are synthetically produced in the pharmaceutical industry through drug development programs, psychedelic compounds have a long and established history. Whether derived from the plant or developed in the lab, the bare-naked molecule is unlikely to be eligible for patent protection. For example, compounds such as psilocybin, mescaline, ibogaine, and LSD are being evaluated in clinical trials, but the compounds themselves are unpatentable because their existence is well documented in the prior art.

However, that does not mean that the path to patents is closed off. Companies seeking to build IP portfolios have adopted several strategies. If the molecule itself cannot be patented, can a novel form be patented? Compass Pathways has put it to the test by obtaining patents on crystalline forms of psilocybin. While some of their patents are currently being challenged, the question remains an open one. Other strategies include filing patents on synthetic pathways, extraction protocols, novel formulations, methods of use, and methods of treatment in various disease conditions. As we see more data emerge from clinical trials, we are likely to see patent applications covering stability, pharmacokinetic, and pharmacodynamic data. Given that the compounds are Schedule I substances, there is also a keen interest in innovative packaging and drug delivery devices.

Originally Published At Microdose

Intellectual Property Due Diligence in Psychedelics

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