Meet the man making natural psychedelics in bioreactors

Itay Hecht is the CEO & Co-Founder of PsyRx, an Israeli pharmaceutical producer of natural psychedelics – ibogaine and psilocybin specifically. As there will be a need for natural – but GMP grade – psychedelics, PsyRx is filling that gap.

Our founder, Floris Wolswijk, spoke with Itay Hecht to learn more about their unique approach and market strategy for making natural psychedelics.

What was your motivation for starting PsyRx, and what is the market need that you’re fulfilling?

First of all, I urge myself to break the rules. Five years ago, I tried to raise money for a cannabis company in Tel Aviv, and it was challenging. I said to myself, “if you don’t want to give money in a normal way, I’ll go to the stock exchange.” I ended up doing a reverse merger into a shell in Tel Aviv and overnight turned into a public company that raised $10 million, something that was surprisingly easy.

After this, others wanted to get in on the hype. We had prime ministers as chairmen of cannabis companies, military generals, and many people involved in high-level security. Because of this, I quickly realised that I must have it in me to bring psychedelics mainstream.

My water and soil engineer background has given me some of the skills needed, particularly concerning public culture and development. I did a lot of exciting research here at one of the universities in Israel, and I used what I had learned about the technologies in my field to create bioreactors for growing mushrooms. The idea behind this is to supply sustainable psilocybin to the pharma industry with a reproducible method that is GMP compliant.

The psychedelic industry is considered a hippie industry, and hippies will prefer anything organic. Almost all the compounds that have been used in psychedelic research have been synthetic because of regulations. I wanted to change this by working with natural botanically sourced compounds. Because of this, I think we will have a lot of customers for our product.

It’s a big market, and there will be a lot of competitors that produce psilocybin through various routes, including natural, but I think that all of us will have space to work. Ultimately, this is why I began working with psychedelics in this way.

Why did you choose psilocybin and ibogaine specifically?

Well, psilocybin because of what I liked to call “plant regulation.” What I mean by this doesn’t have to do with government regulation but more so with how plants grow, like a vegetable or a fruit; once you have the experience growing them, the process can be straightforward to control. The lab we work with has a lot of experience growing mushrooms, so given their history and experience, we thought it would be an excellent choice to work with psilocybin.

With ibogaine, people seem to be more hesitant to work with it after hearing stories of people passing away from using it. When I first heard about ibogaine, this is what got me interested because I knew many people wouldn’t want to deal with it. I also saw it as a bit of a challenge, which I’m fond of.

After spending a while studying the history and botanical side of ibogaine in the beginning, we found that for iboga to grow, the seeds must be digested by an elephant. Once digested, the stomach acid helps the seeds flower once excreted. We thought this would make the agricultural side of things a bit challenging but also very interesting to work with and develop a technology to replicate these methods. Secondly, after reading about how ibogaine affects the brain, I understood it works pretty similar to conventional antidepressants such as SSRIs.

Can you tell me more about SSRIs and ibogaine? Are you looking into doing a combined therapy with the two?

We know the benefits of ibogaine, how it works, and the side effects – the side effects of ibogaine help decrease the side effects of SSRIs. For example, ibogaine in low doses acts as a stimulant, increasing libido and reducing appetite. So if you are using SSRIs and two of the most common side effects your experiencing are obesity, and the other is a lack of sexual drive; while the SSRI might be helping, the side effects can start to make people feel worse.

We began to ask ourselves, “how can we keep the antidepressant effects of an SSRI but limit the side effects?” and that’s how we got to ibogaine. We’re not looking into a high dose of ibogaine to get these effects. Instead, we’re looking for a dose even smaller than a microdose. 

Ibogaine has been around for a long time, but there is not that much information on it, and most studies using ibogaine are observational, making it all the more challenging. We’re not looking into a high dose of ibogaine to get these effects. 

We’re not thinking of doing any assisted therapy with this treatment. Instead, the person treating you will be in charge of the therapy side of things. We’re focusing on our treatment, a combination drug, an antidepressant drug that has ibogaine inside and other molecules.

From a commercial perspective, if you set up a company, take money from investors, and want to conduct research, you need to have IP. Trying to get IP for a botanical molecule alone is quite complicated. We have seen some of the challenges faced by other companies in the field trying to get IP around, say psilocybin. By combining ibogaine with an SSRI, we can protect it with IP and attract investors.

Someone needs to prescribe your drug, but it’s not an active psychedelic-assisted therapy session where someone is in an altered state of consciousness? Why chose this route?

Exactly. Any physician who can prescribe you Prozac will have the ability to give you our drug. Over the past 30 years or so, there has been no new family of antidepressants, with the most recent being SSRIs. We are not creating a new family of drugs but creating a unique combination.

While it’s nice to be in the psychedelic sector, with so many people talking about it and, of course, the hype, I think the biggest mistake most are making is focusing on psychedelics only instead of focusing on the mental health problems themselves. In our case, we’re aiming to become a typical pharmaceutical company that will develop an antidepressant brand with IP that is FDA approved and aims to reach the global mental health market much bigger than the psychedelic global market.

That’s why we chose two projects in the company. One project will have the ability to show revenue fast. Companies in the biomedical sector tend to start pretty well but end very bad unless you can deliver revenue, sales or improvement in your research. If you can’t do these things, you will kill yourself financially.

Are there any hurdles you’re facing? If so, how do you plan on overcoming them?

We face some regulatory hurdles in our company and our drug, but we have a plan to overcome them. With the FDA, there are several ways to register a drug, and this can cost billions and take over ten years, but there are also other ways to go about things.

For example, the FDA has a drug combination registration path called 505 (b) (2). If you take two known drugs approved by the FDA and combine them to make a third, it can be much cheaper and faster because all the necessary tests, like toxicity, have been done, and the FDA has all the files with this data.

We received a waiver from the Israeli Ministry of Health to start our research on human subjects immediately after we tested the safety of our combination in smaller animals. This is very exciting for us as we thought we would be in the same position for two years or more. We aim to start our human studies in Israel in about nine months (Q1 2023). 

Next to that is our drug development and our bioreactor. We have finished with our psilocybin bioreactor, and now we have commercialised it and are moving it to a facility that can do this for us. In six to nine months, I think we’ll be able to start showing revenue if everything goes to plan, which will help us progress even further.

Can we take a step back and talk about your choice for botanically sourced production? What are the benefits and drawbacks compared to other methods?

Let me give use my experience in the cannabis industry as an example. In this industry, 15 years ago, regulators asked you to use synthetic compounds if you wanted to conduct a study. We had all these synthetic cannabinoids, but most studies showed they did not have desirable effects. Many things could be wrong with the synthetic version used in the study. Then, if the compound fails, it is likely that it doesn’t act similarly to naturally sourced cannabis.

In terms of psychedelics, creating psychedelic compounds in the lab is relatively easy, but the real question relates to the bioavailability of such a compound. It’s all about evolution when we think of psychedelics like psilocybin and the 5-HT receptor. We evolve with the mushrooms. Because of this, we believe that if you were to synthesise psilocybin, it wouldn’t be the same as the botanical source, and you won’t get the same effects. It’s almost like a lock; if the key doesn’t exactly fit, the lock won’t open. So as opposed to creating a new drug, we are repurposing one that already exists – cutting a new key, not replacing the lock.

Another example is the drug thalidomide. Women were given this drug to help them with nausea while pregnant, but there were severe side effects for the baby. They killed this drug immediately, but today they use it to treat certain cancers. So they take the same molecule that seriously affected many people and now use it for something else. Because of this, I think the geometric shape of the molecule is critical. 

In terms of costs, I believe that it will be much cheaper to synthesise these compounds compared to the botanical route. Take buying a gram of MDMA on the street as an example. You’ll pay a maximum of $50 in some places, but if you want to buy one gram of GMP MDMA for a clinical study, it will cost you $8,000. In a home lab and a GMP facility, the method will be more or less the same, using similar equipment and the same chemicals. The big difference is one has regulations, and at present, more regulations mean more money. 

However, once the regulations are eased and the costs go down, I believe that people will switch from synthetically sourced psychedelics to the natural route. We saw this in the cannabis industry; the moment you were permitted to use a botanical source, everyone switched to that.

What does the future hold for PsyRx?

We have another project in our pipeline that we hope to start soon. We want to explore the effects of psilocybin on diseases like irritable bowel disease (IBD) and chronic colitis and investigate how psilocybin acts as a probiotic and interacts with particular steroids, something we have applied to patent. Additionally, we have a study in the pipeline at the university in Jerusalem to test our theory in animal models.

IP is an essential aspect of our business model. For example, five years ago, if you looked on the market for a kilo of CBD, it would cost around $150,000. Today, it would cost about $900. I’m assuming this will be the same for psychedelic compounds. Unless you have an IP for development, nobody cares.

Importantly, we’re not looking to become an API manufacturer; we are developing technologies. My goal is to make a product, sell it to a few companies and get all the necessary approvals for the system. Once it’s licensed, I’d sell the system to a different company. We are not manufacturers; instead, we develop the technique. Our idea is to generate innovation and revenues through sublicensing and selling the product.

In terms of funding, we founded the company in October 2019 and had the first seed round in January 2021. We carried the company ourselves for the first year and a half until raising $1.6 million at a $4.5 million evaluation. Our burn rate is very low, and we are doing our gap round as an R&D company. In Israel, you can go public when you’re an R&D company which makes it much easier concerning regulation and funding. 

We will take roughly $1 million to help us start our in-human study and then move through an IPO in Tel Aviv, hopefully raising between $6 and $12 million. I’m looking forward to getting this study underway and going public.