Start-up that aims to ‘rewire the brain’ raises $70m in IPO

Delix Therapeutics, a Boston-based company that is researching compounds similar to psychedelic drugs such as LSD but without their hallucinogenic effects, raised $70m in an initial funding round, according to CEO Mark Rus.

The company, which has yet to do clinical trials, focuses on mental-health treatments and has a stated mission of “rewiring the brain to heal the mind.” It has patents for more than 1,000 novel compounds that help the brain’s ability to adapt, and is homing in on two in particular, Rus said in a phone interview. He said these have shown in preclinical work to match or exceed the properties of ketamine, a mind-altering drug that is effective in treating depression, pain and other conditions. 

“These are unlike any other treatments currently available for mental health,” he said.

While psychedelic drugs may work for some people, he said, they come with abuse risks and cardiac risks, as well as time and financial commitments due to the fact that many involve “trips” that can take hours, during which patients need to be monitored. 

The series A round was led by Artis Ventures and RA Capital Management. Other investors include Apeiron Investment Group, which is the family office of Christian Angermayer, a prominent investor in psychedelics and mental healthcare. 

Delix joins a number of companies that are homing in on psychedelics as treatments, many of which have recently gone public. Once stigmatised, substances such as psilocybin, MDMA and ketamine have in recent years gained interest as potential treatments for depression and other conditions.

The compounds that Delix is studying help promote neuroplasticity, or the brain’s ability to adapt. Compounds that achieve this without producing hallucinogenic effects are seen as less risky than the classic psychedelic drugs, and could therefore address a much wider market, Rus said.

“When one-fifth of people suffer from a mental illness, you need medications that can be taken at home if you want to make a dent in this problem,” co-founder and chief innovation officer David Olson said in the same interview. 

The company has grown from three employees to 20 in 2021. It plans to use the funding to hire more still and to apply to the US Food and Drug Administration for permission to investigate its two leading drug candidates and complete trials on them. 

Delix was cofounded by Nic Haft, an MD of venture capital firm OMX Ventures, which helped finance the company from inception, and Olson, whose research on the ability to reverse cortical atrophy, the root cause of many brain disorders, has been published in peer-reviewed journals.  

Bloomberg News. More stories like this are available on bloomberg.com