GHRS - GH Research: But Toad Venom Is A Controlled Substance

2023-06-16 11:06:16 ET

Summary

• GH Research PLC is developing mebufotenin, developed from toad venom, as an antidepressant.
• They have some early positive data.
• However, toad venom is a controlled substance and will face approval difficulties.

GH Research PLC ( GHRS ) is developing mebufotenin for depression and other CNS diseases. Mebufotenin is a formulation of bufotenin, a toxin found in certain species of toads, mushrooms and some plant seeds. Indeed, bufotenin gets its name from Bufo, which is part of the scientific name of certain toads native to the Sonoran Desert.

Bufotenin is a Schedule I controlled substance in the U.S. and various other countries, thus its possession, use and sales are illegal. For centuries, bufotenin’s psychedelic effects have been recognized among ancient tribes. A number of companies are now working to develop mebufotenin as an antidepressant. Some of these could include Beckley Psytech, COMPASS Pathways, Cybin, Entheon, Mindmed, Small Pharma and Viridia Life Sciences. GHRS is one of these companies.

The GHRS pipeline looks like this:

Lead asset GH001 is a Mebufotenin (5-MeO-DMT) formulation for inhalation. It is in a phase 2b trial for treatment resistant depression, and in a phase 2a trial for bipolar II disorder and postpartum depression. GH001 completed two Phase 1 trials in healthy volunteers and a Phase 1/2 trial in TRD patients. So I checked out our new tool - which will soon be made available to TPT members - for past trial data, and this is what it shows:

On querying the tool, here’s the efficacy data I am getting:

In the Phase 2 part of the Phase 1/2 clinical trial of GH001 in patients with treatment-resistant depression (TRD), the primary endpoint was met with 7 of 8 patients (87.5%) in remission (Montgomery–Åsberg Depression Rating Scale ((MADRS)) ?10) at day 7 after dosing (p<0.0001). The mean change from baseline in MADRS at day 7 after dosing was -24.4 points (-76%) (p<0.0001). The trial used a proprietary GH001 individualized dosing regimen administered on a single day with up to three increasing doses of GH001 (6 mg, 12 mg and 18 mg). The second and third doses were only administered in the event that the patient did not achieve a peak experience1 (( PE )) at the previously administered dose. Based on this trial design, 6 patients received 6 mg and 12 mg doses of GH001 and 2 patients received 6 mg, 12 mg and 18 mg doses of GH001. 7 patients were able to achieve a PE at their final dose, and at this final dose the mean PE total score was 90.4.

The source for the above data is here . Eventually, the tool is going to let you compare this data with data from similar trials.

So anyway, coming back to GHRS, the mean change from baseline in MADRS at day 7 was -24.4 points, and earlier trials show a clinically meaningful change to be at least 6 to 9 points. Thus, GH001, on this metric and ignoring a host of other cross-trial factors, did very well.

One interesting thing that we have seen in various use cases of bufotenin is that it is a rapidly acting molecule. In TRD, slow onset of clinical activity has been a persistent issue. Average time to remission, according to data from the company, is 6 weeks, which leads to a remission rate of less than 15%. Key elements of the GH001 value add which can significantly address current lacunae within the TRD market:

• Psychoactive effects with ultra-rapid onset (within seconds) and short duration (5 to 30 min)

• High propensity to induce peak experiences ((PE)), which may be a surrogate marker for therapeutic effects

• Intraday individualized dosing regimen ((IDR)) for maximization of ultra-rapid and durable remissions

• Single visit initial treatment, with no structured psychotherapy

• Potential for convenient and infrequent retreatment

The rapid onset of GH001 has been tested over decades of research. The company just needs to prove that in a properly designed clinical trial. However, the biggest challenge faced by GHRS is that Mebufotenin is a Schedule I controlled substance, a class of drugs that has never been approved by the FDA. Even if the FDA approves it, it needs to be rescheduled by the DEA before it can be sold to patients. Moreover, the company has only filed for an “aerosol” composition of matter patent for GH001, which is obvious given that Mebufotenin is a naturally occurring substance and cannot be easily patented. This may cause another difficulty for the company down the line.

Financials

GHRS has a market cap of $626mn and a cash balance of $246mn. R&D expenses were $7.3 million for the quarter ended March 31, 2023, while G&A expenses were $3.1 million. At that rate, they have a cash runway of some 20 quarters - which, of course, does not provide a real picture, because later stage trials will quickly increase expenses. The only conclusion we need to draw is that, currently, the company’s finances are quite well-controlled.

Bottomline

GH Research PLC is doing interesting work. However, the controlled substance risk is a major obstacle to investing in it. Things may change; there’s hope that MDMA, a Schedule I substance, may be FDA-approved - see this Nature article.

However, don’t expect MDMA approval to become a cascade of psychedelics and other controlled substances being sold at retail street corner pharmacies. These things have always been sold at street corners, but certainly not by pharmacies. I would like to see a lot more data and some designations from the FDA, telling me that they look benignly upon the program, before I will take a call on GH Research PLC stock.

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