Silo Pharma: A Capital Efficient Strategy Targeting Psychedelics
February 23rd, 2021
Psychedelics, Top News
Psychedelics have the potential to revolutionize mental health disorders that have been woefully underserved by conventional therapies. According to Data Bridge Market Research, psychedelic drug sales will grow from just over $2 billion in 2019 to over $6.8 billion by 2027, which represents a 16.3% compound annual growth rate.
Investors have many different options for exposure to the nascent industry with over 30 publicly traded companies in the space. These companies are doing everything from running psychedelic retreats to operating ketamine clinics to advancing psychedelic drugs through the FDA’s clinical trial process to bring mainstream therapies to market.
Silo Pharma Inc. (OTCQB: SILO) is a biopharmaceutical company focused on merging traditional therapeutics with psychedelic research to help those suffering from depression, post-traumatic stress disorder, Parkinson’s disease and other rare neurological disorders. With capital in hand, the company is actively acquiring intellectual property and partnering for research.
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Many psychedelic companies aim to advance psilocybin and other psychedelics through time-consuming and expensive FDA clinical trials. According to a study of over 60 clinical trials between 2014 and 2018, the mean cost to develop and bring a new drug to market—accounting for the cost of failed clinical trials—amounted to $1.3 billion.
Silo Pharma’s strategy is focused on acquiring intellectual property and partnering with world-class medical research organizations. With a focus on Breakthrough Therapy, Orphan Drug and Fast Track statuses, the company aims to partner with large pharmaceutical companies to license the vetted IP and undergo trials.
The company’s goal is to acquire and conduct initial studies on promising psychedelic compounds, identify clinical pathways and then partner with third parties to undergo actual trials. If these therapeutics are commercialized, the company aims to generate high-margin recurring revenue from royalties on sales that could unlock significant shareholder value.
Silo Pharma began executing on these plans in late-2020 when it signed an option agreement with the University of Maryland Baltimore for its central nervous system homing peptides. These pathology-specific peptides could be essential in helping psilocybin-based therapies target diseased tissue and treat Multiple Sclerosis and other neuroinflammatory diseases. In February, the company finalized the license by signing a Master License Agreement with the University of Maryland, paving the way for its unique commercialization strategy.
The company also filed new provisional patent applications pertaining to the CNS-delivery of unique anti-inflammatory therapeutics coupled with psilocybin. This intellectual property adds to the company’s existing portfolio of provisional or pending patents, including cancer-related ones, that the team continues to build out over time.
Earlier this year, the company licensed its IP covering psilocybin for cancer to Alkido Pharma Inc. (NASDAQ: AIKI) in exchange for a one-time $500,000 cash payment and $500,000 in convertible preferred stock. The company is also entitled to potential 2% royalty payment on net sales in the event that the licensed property is commercially developed.
More recently, the two companies signed a letter of intent to grant Alkido a worldwide exclusive sublicense for use of its peptide therapy, combined with psilocybin, in the therapeutic treatment of neuroinflammatory disease in cancer patients. The specific terms of the agreement have yet to be negotiated but the deal furthers their collaboration.
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Silo Pharma recently raised $4.275 million from existing accredited and institutional investors that it plans to use for the continued development of its therapeutic pipeline. With the new capital in hand, the company is well positioned to continue executing on plans similar to the University of Maryland and Alkido Pharma deal to bring therapeutics to market.
For more information, visit the company’s website or download the investor presentation.
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