Reunion Neuroscience, a drug company developing psychedelics for the treatment of mental health conditions, has raised tens of millions of dollars to support its research efforts.
MPM Capital, the biotechnology investment firm that took Reunion private last year, co-led the Series A financing alongside Novo Holdings, the parent company of pharmaceutical giant Novo Nordisk. Arkin Bio Ventures, Mitsui & Co. Global Investment, Plaisance Capital, FemHealth Ventures and Palo Santo also participated in the round, which totaled $103 million.
Reunion says the fresh funding will help pay for a mid-stage clinical trial testing its most advanced experimental medicine, code-named RE104, in women with postpartum depression. The company expects to start enrolling participants before the end of June and get results sometime in the second quarter of next year.
Reunion’s medicine is, essentially, a synthetic version of psilocin, one of the compounds found in psychedelic mushrooms. Over the last several years, psychedelic drugmakers have made inroads on some of the legal, scientific and regulatory challenges that historically held back this area of research. The progress has, in turn, attracted more money from biotech investors.
In 2020, for example, an initial public offering provided Compass Pathways with nearly $150 million to continue its work testing a different compound found in many mushroom species, psilocybin, against conditions like PTSD and depression.
More recently, shares of the Australian-based biotech Incannex Healthcare spiked after a small study found psilocybin helped people with generalized anxiety disorder. Another company in the space, Cybin, in March raised $150 million by selling stock to select investors.
Psychedelics aren’t new. So to build businesses around them, drugmakers are modifying these compounds or engineering synthetic alternatives that can be patentable. In Reunion’s case, RE104 is a proprietary medicine designed to induce a much shorter psychedelic experience.
Such a feature could save patients and caregivers considerable time and resources, especially in light of recent draft guidance issued by the Food and Drug Administration.
Last year, the agency laid out some of its concerns with psychedelic drug development and offered suggestions for clinical testing. According to the agency, patients receiving these drugs “remain in a vulnerable state for as long as 12 hours.” Therefore, when monitoring for safety, there should be two healthcare providers observing the patient for the duration of the treatment session.
Reunion notes how its therapy requires “only about half a day in-clinic, a significantly shorter time commitment than required for longer duration psychedelics, like psilocybin and MDMA.” The company also said that, in an early-stage study, RE104 produced a psychedelic effect “similar in intensity and quality” to psilocybin, but lasting only about half the time, or three to four hours.
Like the rest of Reunion’s drugs, RE104 acts on a protein well-known to neuroscientists. Research indicates this protein, called serotonin 2A receptor, is tied to learning, memory as well as a range of mental disorders. It’s also what psychedelic drugs interact with to cause hallucinogenic effects.
“We see a significant opportunity for RE104 to become a best-in-class therapy and are deeply encouraged by its potential to improve outcomes for patients facing limited treatment alternatives,” said Natalie Sacks, a venture partner in the venture investments group at Novo Holdings’ U.S. division, in a statement.
Aside from postpartum depression, Reunion is investigating whether RE104 can treat other neuropsychiatric diseases. One of interest is “adjustment disorder” in cancer, which the company defines as a “maladaptive response” to a cancer diagnosis that persists longer than two weeks and is “disproportionate to the magnitude of the stressor.” An estimated 40% of cancer patients develop a mood disorder, according to Reunion.
The financing disclosed Wednesday furthers a sort of turnaround story for Reunion, which two years ago was at risk of violating the Nasdaq stock exchange’s minimum share price requirements.
At the time, Reunion was operating as Field Trip Health. But in April 2022, the company announced it would split in two. Its drug discovery activities would become Reunion, while its healthcare business would be renamed Field Trip Health and Wellness.
Once the split finalized, Reunion consolidated its shares on a 5:1 basis to stay compliant with Nasdaq’s rules.
The company didn’t stay on the public markets for much longer, though. By May 2023, it had agreed to sell to MPM in an all-cash deal valued at just over $13 million.