Eleusis Therapeutics US, Inc.

When it comes to drug formulations, pills are generally preferred to injections and infusions. They’re more convenient for patients since dosing doesn’t require a visit to a clinical site. But in depression, pill versions of the psychedelic compound psilocybin can have less than optimal outcomes. In a turnabout from the push for more oral depression drugs, Eleusis is developing an infused formulation of psilocybin that the company says could overcome limitations of oral psilocybin. As the biotech prepares for the first test of its drug in humans, it has signed a merger deal that infuses it with $288 million. Eleusis, which maintains operations in London and New York, announced Thursday that it has entered into an agreement to combine with publicly traded Silver Spike Acquisition Corp. II, a special purpose acquisition company, or SPAC. The boards of directors of both companies have already approved the transaction, which is expected to close in the second or third quarter of this year. Psilocybin is a psychoactive chemical found in certain mushrooms. Industry and academic research has shown that drugs containing psilocybin as the active ingredient can have an effect on depression. However, Eleusis said in an investor presentation that these studies have also shown variability in how the drug is absorbed and metabolized by the body—even when given to patients in identical doses. This variability may require higher dosing, which in turn can lead to unpredictability in how the drug is absorbed and processed. Also, these drugs require a lengthy treatment and patients taking these drugs must be observed for as long as six hours. Eleusis contends that these features of oral psilocybin make the drug impractical for broad use, even if such drugs win FDA approval. Eleusis’s lead drug candidate, ELE-Psilo, is formulated to deliver the active ingredient in psilocybin via an intravenous infusion. The company said in the presentation that as an infusion, the drug offers the potential for a more consistent therapeutic effect and a shorter treatment time. The infusion will take 10 to 30 minutes, followed by two hours or less of monitoring in the clinic. Furthermore, Eleusis said its formulation can be personalized to the patient by altering the infusion rate to adjust the intensity of the treatment. Though infusions are less convenient than a pill that can be taken anytime and anywhere, Eleusis aims to make infusions more accessible through Andala, a subsidiary of the company that operates drug therapy clinics. These clinics already manage the dosing of mental health medications, including Johnson & Johnson depression drug Spravato. That drug, approved in 2019, is a nasal spray formulation of ketamine, a compound that can produce dissociative effects. If ELE-Psilo reaches the market, the Andala clinics would provide patients a way to access to the treatment. Eleusis said it expects to sell its stake in Andala, in whole or in part, before potential FDA approval of ELE-Psilo or any other drug candidate from the biotech. In an investor presentation, Eleusis said it plans to begin a Phase 1 study evaluating ELE-Psilo in the second quarter of this year. The study would first test the drug in healthy volunteers, then in patients with major depressive disorder. Study results are expected in the second half of this year. Eleusis was founded in 2013. Speaking on a corporate video, Shlomi Raz, the biotech’s CEO and founder, said that the company’s intellectual property was developed as part of a broader drug discovery effort underway since 2017. David Weiner, Eleusis’ vice president of drug discovery, said on the video that the primary receptor for psychedelics is found throughout the body, offering the potential to expand psychedelic drugs beyond psychiatry. The company’s research has already yielded a topical drug candidate, ELE-102, in preclinical development for eye diseases. Weiner said that potential applications of the drug include glaucoma, tear production, allergic conjunctivitis, and uveitis, which is a form of eye inflammation. The merger of Eleusis with Silver Spike will give the biotech access to as much as $287.5 million from the SPAC’s accounts to finance its drug development plans. The Eleusis shares held by its existing stockholders will become equity in the combined company and will be subject to a one-year lockup period. When deal closes, those Eleusis shareholders will own about 49% of the combined company. Silver Spike’s shareholders and the SPAC’s sponsor will own 51% of the combined company, as long as those shareholders do not sell their shares. Eleusis isn’t the only biotech trying to develop better psychedelic drugs. Last September, Boston-based Delix Therapeutics unveiled a $70 million Series A financing to support development of oral psychedelic drugs that don’t cause hallucinations and other side effects. The company said it expected to begin clinical testing in 2022. London-based Compass Pathways is developing an oral psilocybin drug for depression. In November, the company reported results from a mid-stage study designed to find the right dose to advance to Phase 3 testing.