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The Psychedelics Evangelist: A German Financier Wants to Turn Magic Mushrooms into Modern Medicine

Christian Angermayer is an unlikely proselyte of psychedelia: The German financier didn’t drink so much as a sip of beer for the first three decades of his life.

But five years ago, after careful consideration (and the encouragement of a personal physician), Angermayer boarded a yacht with a handful of his closest friends. They sailed into the crystalline, tropical waters of a jurisdiction in which such substances are legal (he is very emphatic on this point), and had his very first psychedelic trip. His entire worldview was changed.

“It was the single most meaningful thing I’ve ever done or experienced in my life,” said Angermayer, 40. “Nothing has ever come close to it.”

The first thing Angermayer did after the experience was call his parents and tell them, with a newfound conviction, that he loved them. Then, being a consummate entrepreneur, he quickly identified a business opportunity: He would commercialize psychedelics.

Today, with a net worth of roughly $400 million accrued through various enterprises, Angermayer is one of the driving forces behind the movement to turn long-shunned psychoactive substances, like the psilocybin derived from so-called magic mushrooms, into approved medications for depression and other mental illnesses. Though he still resolutely won’t touch even a drop of alcohol, he has banded together a team of like-minded entrepreneurs—including Silicon Valley billionaire Peter Thiel—to invest in a handful of startups focused on developing psychedelics. 

Perhaps the most closely watched is Compass Pathways, which has patented a method to develop psilocybin in a laboratory, so it doesn’t need to be extracted from mushrooms. The company has quietly gobbled up intellectual property related to psychedelic manufacturing. And, importantly, it has won Food and Drug Administration approval to run clinical trials testing psilocybin in patients with treatment-resistant depression.

In May, at the Milken Institute Global Conference in Los Angeles, Angermayer stood before an audience of policy wonks, industry leaders, Hollywood types, and the global financial elite to argue that, beyond its therapeutic potential, psilocybin is also poised to be a moneymaker.

Depression alone affects some 300 million people around the globe. 

“Even if it takes just a single dose of psilocybin to treat depression—and I’d be very, very happy if that’s the case—the medical unmet need is huge,” Angermayer said. “The market is growing, for better or for worse.”

Not everyone is convinced. There are ample scientific questions, to say nothing of the regulatory hurdles involved in any drug approval. There are also competing startups developing alternative therapies that could prove more effective or safer or simply easier to administer.

But Angermayer’s associates warn against underestimating him, even if he sometimes comes off as simply an “eager puppy,” as he himself puts it.

“His excitability is the thing that allows him to do his due diligence, and understand how various sectors work very quickly,” said Dr. Jason Camm, the chief medical officer of Thiel Capital Management. “He’s very authentic and very genuine… and very different from your standard institutional investor.”

Once considered a relic of 1960s counterculture, drugs like psilocybin, LSD, peyote, and even more esoteric hallucinogens like ayahuasca and ibogaine are experiencing a renaissance, both in pop culture and in the lab.

They have been helped along the way by the steady emergence of careful, peer-reviewed research from respected institutions like Johns Hopkins University and New York University that have validated the therapeutic potential of psychedelic drugs. 

Scientists have found that psychedelics could be particularly potent for conditions like treatment-resistant depression, post-traumatic stress disorder, and obsessive-compulsive disorder. In 2016, a landmark study from Johns Hopkins found that psilocybin helped patients with terminal cancer manage their depression and anxiety, and eased the psychological stress associated with those conditions. It also helped some of them make peace with their diagnoses; of roughly 50 patients, two out of three ranked their psychedelic trip as one of the five most meaningful experiences of their lives.

Other studies, however, have raised bigger questions about whether some claims surrounding psychedelics are more hopeful than truthful. While proponents, for instance, have argued that psilocybin helps enhance perception, a study last year in the Netherlands found that microdoses of the substance had no noticeable effect on certain forms of intelligence like problem-solving and abstract reasoning. It did, however, seem to improve two forms of thinking that underlie creativity. 

Because psilocybin remains illegal in the U.S., research around it is still limited. In early June, Rep. Alexandria Ocasio-Cortez, the Democratic congresswoman from New York, introduced legislation that would have made it easier for scientists to obtain psychedelic substances for research. The amendment, which Ocasio-Cortez introduced to encourage research into the potential for the drugs to help veterans struggling with post-traumatic stress disorder and other mental illnesses, was rejected by the House.

But it might only be the start of a political push to accelerate access to psychedelics in U.S. labs.

“These drugs show extreme promise in treating PTSD + more,” Ocasio-Cortez said on Twitter. “Let’s keep at it.”

Compass Pathways’s clinical trial protocol requires that psilocybin be administered in the presence of a psychotherapist trained to guide patients through the experience. Patients are led to a serene, spa-like environment, given the drug, and for several hours are accompanied by a professional who can help them face past traumas or personal insights gleaned from the experience. The therapist can also steer them away from the notorious “bad trips” sometimes associated with magic mushrooms.

Scientists still don’t fully understand how psychedelics work on the brain. But, despite their differing chemical structures, most seem to work by binding to receptors for the neurotransmitter serotonin.

Brain imaging studies indicate that psychedelics lift the neurochemical dampers typically in place in our brains that allow us to maintain a certain level of control. With the brakes off, so to speak, the user might have an expanded sense of perception. The drugs also help connect neuronal networks, leading to a kaleidoscope of complex emotions, a higher state of consciousness, and deeper observations about the nature of reality and of the self. 

Not all hallucinogens have the same effects on the brain. And not all are seen as having therapeutic potential. Developing medications that are enhanced versions of, say, LSD, or a compound that combines the qualities of several psychoactive drugs, would be quite time-consuming and costly.

But a handful of drugs that are considered “classic” psychedelics—lysergic acid, which is derived from the ergot fungus; dimethyltriptamine, the active ingredient in ayahuasca; psilocybin, found in magic mushrooms; and mescaline, found in the peyote cactus—are seen as possible treatments.

With those, “there’s no dose with observable organ damage or neurotoxicity. That’s pretty freakish,” said Matthew Johnson, an associate professor of psychiatry and behavioral sciences at Johns Hopkins University who studies psychedelics. “You’d be hard-pressed to find anything sold over-the-counter that you could say this about—including caffeine and aspirin.” 

There are caveats, of course: Drugs like psilocybin have the potential to exacerbate psychiatric illnesses like schizophrenia in a small percentage of the population. The belief, according to Johnson, is that this subset of individuals would likely have developed some form of psychosis even had they not taken a drug like LSD or psilocybin. Psychedelics may just speed up the inevitable. The research is still early in terms of figuring out who would be a poor candidate for psychedelic therapy.

Angermayer is adamant that psychedelic drugs will never be for everyone. And, unlike, say, marijuana or alcohol, they should not be taken casually or for recreational use, in his view. But in some cases, he believes, psychedelic drugs can help certain individuals gain perspective and a kind of wholeness.

He also knows that his beliefs are just beliefs. And what he and Compass need now is science.

“We have a lot of anecdotal evidence, and a lot of basic research on psychedelics—but unfortunately, these various drugs haven’t been brought through the FDA or the [European Medical Agency] approval process,” Angermayer said. “So I was like, ‘OK, let’s do this.’” 

Angermayer, whose unlined face and boyish good looks belie his 40 years, is fervent about guarding the sanctity of his body and his brain. But teetotalism made him a “weird kid” in the small Bavarian town where he grew up.

“I was super worried that my brain cells would die,” he said, grinning. “So I didn’t drink, never smoked a joint or a cigarette, nothing.”

Instead, he studied. The only child of a mild-mannered engineer and secretary, he went to University of Bayreuth in Germany on a full scholarship. He pursued economics as part of a multidisciplinary education that led him to work with two biotechnology professors: Stefan Limmer and Roland Kreutzer. They were working on Nobel Prize-winning RNA interference technology, and Angermayer quickly saw commercial promise.

He helped his professors form a company, Ribopharma, with a sizable stake in the company himself, and brokered an all-stock deal in 2004 to sell the company to Alnylam, a Cambridge biotech that was buying up intellectual property related to RNAi science. (The country’s first RNAi-based drug, developed by Alynyam, was approved last year.) By age 20, Angermayer had made his first millions.

Being wealthy allowed Angermayer to pursue… well, whatever he wanted. He didn’t complete university. Instead, he looked into other sectors that he found intriguing. Along with his work in the life sciences, Angermayer has produced several Hollywood films, become something of a banking magnate in sub-Saharan Africa, and helped launch EOS, one of the top five cryptocurrencies in the world. Science, particularly science on the fringe, has been a persistent interest.

“But he has a good instinct for this stuff, and won’t invest in anything unless it has serious potential for profit,” said Ben Lipps, CEO of MagForce, an Angermayer investment that uses magnets to home in on difficult-to-treat tumor sites.

Psychedelics and mental health therapeutics make up about 15% of his current holdings, and he expects that figure to grow. He last year launched a company, ATAI Life Sciences, which owns about a quarter of the psilocybin-producing Compass Pathways, along with another startup that’s developing a depression drug that’s similar to ketamine, a common street drug. He’s on the verge of closing two more deals in that space—one of which aimed at providing an alternative therapy for the opioid epidemic. Angermayer said he is also interested in acquiring mental health clinics and other ancillary support services that might help buoy this psychotherapy-based model of psychedelics use.

Angermayer has a close-knit web of influential individuals whom he leans on heavily to make business decisions. And he doesn’t make a business decision until it has been vetted by someone he trusts.

“If one of my trusted friends recommends a person or a deal, I know this is ‘pre-screened’—so every interesting person I meet, and every great deal I made—is made from my network,” Angermayer said. 

The infectiously affable businessman counts among his closest friends Thiel, billionaire ex-hedge fund manager Mike Novogratz, and Rwandan president Paul Kagame—former commander of the rebel force that ended the country’s genocide. In 2007, Angermayer met Kagame when the latter was on a state visit to Germany—and the two immediately gelled. Kagame invited Angermayer to visit Rwanda, and he obliged. 

“When I was in Rwanda for the first time, I realized the enormous opportunity Africa provides, and realized at the same time how back then the West had misjudged the economic potential of the continent,” Angermayer said. He privatized a bank there, which he sold to former Barclays CEO Bob Diamond. 

Angermayer is plugged in to the German political scene, and is on good terms with German Chancellor Angela Merkel. He hops the globe, making new friends and business partners—though he does remain unmarried. 

“Christian is endlessly interested in other people and relentlessly curious about new ideas,” Thiel said in a statement. “That combination makes him a perceptive investor.”

Angermayer’s aggressive acquisition strategy and patent provisions have sparked fears of a mushroom monopoly in the industry.

Compass was initially launched as a charity in 2015. At the time, it was in discussions about a possible development partnership with the Usona Institute, a Wisconsin-based nonprofit that conducts its own pre-clinical and clinical research into psilocybin.

But after about a year, Compass was converted into a for-profit entity. It began recruiting scientists to develop and patent the psilocybin-synthesizing technology—and was accused of refusing to sell its product to Usona, hampering its own testing.

“The worry has been that Compass was leaping ahead, using data developed by nonprofit organizations,” said Rick Doblin, founder and executive director of the Multidisciplinary Association for Psychedelic Studies, a nonprofit focused on research and education around the substances. “But my perspective is: For-profits are supposed to do that. The nonprofit produces data for the world, and if people pick it up—that’s a sign of success.”

“I think the big concern is that Compass will try to block competitors from getting into the psychedelics business,” Doblin said.

Competitive issues aside, there are questions about Compass’s business model.

“Compass’s protocol for administering psychedelics is quite laborious, in terms of the amount of psychotherapist time necessary,” said Ronan Levy, founder of Field Trip Ventures, a Canadian venture firm focused exclusively on developing psychedelic-based therapies. “That creates both operational issues as well as an economic issue for people who want to experience or use this approach to medicine.”

Others argue the psilocybin production patent held by Compass is likely too broad, and could potentially be contested in the patent office. 

“There are a whole bunch of different active molecules in magic mushrooms,” said Andrew Chadeayne, CEO of CaamTech, another startup in the psychedelics space who has been working on the “entourage effect” of mushrooms—learning about the chemical variability that might make different psychedelic mushroom varieties have different psychedelic effects. He’s patenting them, too.

Angermayer, interested in expanding his web of psychedelics holdings, recently asked Doblin this spring if he might invest in his nonprofit, MAPS—particularly its efforts to legalize therapeutic use of MDMA, commonly known as ecstasy. Doblin demurred. MAPS is purely donation-based, and unlike Compass, intends to stay that way.

But their talk shifted to one of the highest priority projects at the nonprofit: An exploration of psychedelics in conflict remediation. 

Along with researchers at Imperial College London, MAPS plans on bringing Israelis and Palestinians together to take ayahuasca and, working with negotiation experts, sift through their respective traumas. The idea is that finding common ground in their spiritual and mystical experiences might help coax political reconciliation between the warring factions. 

“This is a project that’ll never be monetized,” Doblin said. Angermayer nevertheless wanted to fund the unconventional geopolitical study—so right then and there, he pledged about $250,000 to cover two years of the three-year effort to explore whether Israelis and Palestinians might, indeed, come to some kind of understanding.

“I’m not all about money,” Angermayer told Doblin. “I’m about peace, too.”

Republished with permission from STAT. This article originally appeared on July 1 2019

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