Is MagicMed Industries Inc. the first patent troll to enter the psychedelic space? Or has MagicMed come up with a brilliant plan that will benefit the entire psychedelics industry by providing access to new psychedelic compounds? The short answer is that only time will tell. We’ve provided a short discussion below. Please feel free to offer your thoughts by commenting below.
MagicMed is Clearly Focused on Developing Patents for New Psychedelic Compounds.
On July 9, 2020 MagicMed Industries Inc. (“MagicMed”) announced that it filed a provisional patent application with the United States Patent and Trademark Office (USPTO) covering composition of matter, drug formulation and process of preparation claims for novel psilocybin derivatives. MagicMed characterized that patent filing as the first in a series of applications that together will protect the Company’s broad portfolio of novel psilocybin molecular derivatives, the PsybraryTM.
On August 24th, 2020, MagicMed issued a press release confirming the company’s intention to file patent applications. According to the press release, “MagicMed Industries intends to file numerous patents to stake broad claims over the new derivative molecules contained in the Psybrary™, from which the company’s partners can gain a significant competitive edge in new product development using molecules that are fully patent protected.”
According to MagicMed, “[t]he initial focus of the Psybrary™ is on psilocybin, and is expected to expand to other psychedelics, including MDMA, ketamine, ibogaine, mescaline and ayahuasca.”
What is MagicMed’s Psybrary?
Based on MagicMed’s press releases, the term “Psybrary” refers to a library of different psychedelic molecules, “derivative molecules,” presumably because they are based on known psychedelics like psilocybin. MagicMed defines term “Psybrary” in their August 24th, 2020 press release as a “collection of novel psychedelic derivatives we are amassing through an industry leading combination of synthetic biology and medicinal chemistry.” This approach is interesting. Instead of synthesizing the compounds via synthetic chemistry, MagicMed is using synthetic biology (bioengineering) and medicinal chemistry (usually reserved for studying the properties of compounds as opposed to making the compounds themselves).
What is MagicMed’s Strategy?
MagicMed is synthesizing new psychedelic compounds with the intention of selling or licensing them to others in the industry. (“MagicMed is employing a diversified partnership model. What that means is we see ourselves as enablers of the entire sector.”)
MagicMed does not have aspirations of conducting clinical trials but rather intends limit their focus to developing new psychedelic compounds. (“We are really good at creating new drug candidate psychedelic derivatives, but don’t aspire to get into clinical trials ourselves.”)
What Value is MagicMed Creating?
Patents. Plain and simple. MagicMed is clear about this point. They are synthesizing psychedelic compounds and patenting them. “We anticipate filing many patents and synthesizing many new molecules, which our partner companies can screen to find their ideal drug candidate to select and advance into further development.”
“The Psybrary we anticipate will be a highly valuable resource for our partners, as it will contain many new molecules to screen, increasing their chances of finding an ideal drug candidate, and each molecule will come with a commercially-friendly manufacturing method and have its composition patent protected. We expect this will be a big asset for our partners, and could be a big hurdle for those who don’t partner with us.”
In other words, MagicMed’s “partners” can use the compounds in their Psybrary without getting sued for patent infringement. And MagicMed’s patent portfolio can be view as a moat (aka “big hurdle”) around those compounds “for those who don’t partner with us.”
Is MagicMed the First Psychedelic Patent Troll?
Good question. The term “patent troll” best describes a non-practicing entity that seeks to extract royalties from other practicing entities by leveraging its patent portfolio. Whether or not MagicMed qualifies as a patent troll probably depends on what R&D MagicMed contributes to the industry.
On the one hand, MagicMed is candid about their lack of interest in clinically developing their compounds in favor of “partnering” with others interested in doing that work. This feels like trolling because the patent owner is holding downstream research hostage in order to extract a profit by enforcing patents on technology that the patent owner has no intention of using itself.
On the other hand, MagicMed appears focussed on filling a longstanding unmet need for making psychedelic compounds. The industry wouldn’t have the ability to work with these compounds at all without MagicMed’s efforts in synthesizing them. Arguably, their patent portfolio will enable them to enjoy some form of compensation for making those compounds available to the rest of the world. Additionally, some have pointed to a lack of IP in the psychedelic space as a major limitation to attracting meaningful investment capital. Creating patent assets solves this problem, allowing for growth in the space.