Neo Kuma Sees Early Success on Psychedelic Healthcare Investments

From: Higginson Strategy
Published: Thu Jun 03 2021

The initial investments have proved successful with three of the seven companies going public this year, yielding between +180% and +680% return on initial investment.

Following the launch of its fund in December 2020, Neo Kuma has invested more than £5m across ATAI Life Sciences, Bright Minds Biosciences, Beckley Psytech, Small Pharma, Eleusis, Journey Clinical and Sana Health.
Neo Kuma was set up in 2019 to invest in "the most exciting, high quality and scientifically robust players" in the psychedelics sector.

It is set to complete its fourth close on its fund later this summer having raised in excess of £10m of investment. The fund exceeded its fundraising targets within five months - demonstrating a high level of investor interest.

Among its investments, Neo Kuma has seen a positive return on its investment in UK-based psychedelics company Small Pharma Ltd, a drug discovery firm accelerating the development of effective therapeutic treatments for mental health disorders.

In the UK it has also backed Eleusis Holdings - a life science company targeting the vast anti-inflammatory potential of psychedelic compounds and combinations with existing SSRI treatments.

Neo Kuma has invested in the Series C and D rounds of ATAI Life Sciences - a platform company that has majority stakes in a range of mental healthcare and biotech companies including COMPASS (CMPS:NASDAQ). ATAI, which has the largest valuation in the industry at approximately $2bn, is currently closing a $100m pre-IPO financing.

Further investments include Bright Minds, a biotechnology company dedicated to developing next-generation therapeutics for patients with life-altering brain diseases. Neo Kuma invested in Bright Minds at SEED achieving a 680% return when it listed on the CSE, and again in a private placement after they went public. Bright Minds has one of the only issued patents for novel chemical entities in the sector, along with partnerships with the National Institutes of Health in the US.

Beckley Psytech, a life sciences company developing novel drugs inspired by psychedelic compounds, has also made exciting advancements, having commenced clinical trials.

Neo Kuma also led the pre-SEED investment round into Journey Clinical, which provides an infrastructure solution for independent therapists in the US to deliver Ketamine Assisted Psychotherapy ("KAP"). Neo Kuma has an active role in the company's future growth plans.

The fund's most recent investment was in Sana Health, a subscription pain and mental health service based in California. The company has recently attained breakthrough device designation for the treatment of fibromyalgia (a long-term condition that causes pain all over the body) from the U.S Food and Drug Administration (FDA).

Neo Kuma's fundraising follows increased scientific and public interest in psychedelic medicine for mental health treatment. Recent successes in scientific trials, combined with approval of previously outlawed drugs for medical purposes, is making psychedelics increasingly appealing for traditional investors.

In April, a study by Imperial College London's Centre for Psychedelic Research found that psilocybin, found in magic mushrooms, is as good at reducing symptoms of depression as conventional treatment, and had a more powerful effect when it comes to actively improving people's well-being and ability to feel pleasure.

Neo Kuma Ventures co-founder Clara Burtenshaw said: "The key to our strategy has been backing companies which have pharmaceutical backgrounds, are guided by science, and are passionate about solving problems and improving people's lives. For us at Neo Kuma, the most important thing is to invest in companies that have real potential to move the standard of patient care forwards.

"Scientists, investors and the public are waking up to the extraordinary potential of psychedelics to help treat and manage mental health conditions.

"It is really exciting to see our initial investments reap such early success, and we look forward to backing more innovative and purpose-driven companies in the near future."
Company: Higginson Strategy
Contact Name: Polly Marsh
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