How MAPS PBC Became Lykos Therapeutics and Raised $100M

Since its founding ten years ago, the MAPS Public Benefit Corporation has been wholly owned by the nonprofit Multidisciplinary Association for Psychedelic Studies, the advocacy organization founded by Rick Doblin to support psychedelic drug research and policy reform. In December, the for-profit MAPS PBC completed Phase 3 clinical trials for MDMA-assisted therapy for PTSD, and became the first company to submit a New Drug Application to the FDA for a psychedelic-assisted therapy. 

MAPS raised $140 million to fund this effort through philanthropy, as well as additional capital through investment vehicles that kept the nonprofit firmly in control. More recently, however, fundraising for this initiative met headwinds which led to a change in strategy. 

Last week MAPS PBC announced that it had completed an oversubscribed Series A private stock sale that raised more than $100 million. The company says it will use the funds to complete the process of seeking FDA approval to sell MDMA for the treatment of PTSD. The total raised includes the conversion of an undisclosed amount of previously issued convertible notes which were introduced last year. 

In a separate statement this week, Doblin, who is the president of MAPS, explained that the company had sold majority interest to mission-aligned and institutional investors. To mark the change in ownership, the company would be rebranding. It’s new name: Lykos Therapeutics.

“MAPS is currently the single largest shareholder in Lykos, with a little less than half the stock,” said Doblin. He noted that MAPS has given up day-to-day control of the company to Lykos management and its Board of Directors.

Amy Emerson, who has been with MAPS PBC since its inception, will continue as Lykos’ CEO. Commenting on the equity sale to Lucid News, she says, “We were a wholly-owned subsidiary, and now we have MAPS as our largest single shareholder, but we’re not wholly-owned anymore. I think that really changes things.”

In his statement, Doblin expressed a sense of “failure and mourning” regarding the transition. “My dream was to develop MDMA-assisted therapy entirely with philanthropic funds” to ensure its public interest mission, he said. “Despite my best-sustained effort for several years, I failed to inspire enough philanthropists to donate the ever-increasing millions of dollars required to both obtain FDA approval and to build the infrastructure needed for patient access, especially since there were many newly created investment opportunities in the psychedelic ecosystem.”

“The decisions to be made at Lykos,” Doblin said, “even though it is a public benefit corporation, will, of necessity, include responsibilities to private stockholders. These decisions will not always be the decisions that the nonprofit MAPS would have made if we had remained the sole owner of MAPS Public Benefit Corporation, responsible only to our donors and to advancing public benefit.”

MAPS ultimately welcomed investors, Doblin said, when the organization realized that failure to get FDA approval for MDMA-assisted therapy due to lack of resources would be the greatest loss of public benefit. 

“MAPS was a victim of our own success,” said Doblin. “Through decades of philanthropy, when there was no government/public funding, and private investments made no financial sense given all the stigma and political obstacles, MAPS donors helped create the cultural context and the psychedelic renaissance that incubated hundreds of for-profit psychedelic companies, many publicly traded. Unintentionally, the rise of for-profit companies made it more difficult to raise additional donations.”

The Deal

In an email to Lucid News, Doblin wrote that “the primary leverage we have to ensure public benefit [at Lykos] was to select investors who maintain a strong focus on social impact and patient access.” 

The Series A financing for Lykos was led by Helena, an organization that supports mission-driven initiatives through non-profit grants and an impact venture capital fund. “Helena exists to try and identify problems in the world, identify solutions to those problems, and then do our best to either implement or enable the implementation of the solutions to those problems,” says Protik Basu, managing partner of the VC fund, Helena Special Investments. 

Other participants in the financing include the Steven & Alexandra Cohen Foundation, Vine Ventures, True Ventures, Eir Therapeutics, Unlikely Collaborators Foundation, The Joe and Sandy Samberg Foundation, Bail Capital, KittyHawk Ventures and Satori Neuro.

“So many Americans suffer from post-traumatic stress disorder and the current treatment approaches are not effective for every case,” said Alex Cohen, president of the Steven & Alexandra Cohen Foundation. “We are proud to support efforts into the safe, equitable, and responsible use of psychedelics for therapeutic purposes with a focus on medically underserved communities.”

According to the terms of the deal, MAPS negotiated a ten-to-one dual-class voting shares structure. Doblin will have a seat on the Lykos Board of Directors as one of six MAPS-appointed members. The two remaining board seats will be filled by CEO Emerson and Basu, who represents the shareholders. While MAPS leadership owns no stock in Lykos, to avoid conflict of interest, Doblin said that the ability to appoint the majority of board members will help ensure that Lykos’ compensation incentives and other decisions include public benefit considerations. MAPS will also have representatives on the Lykos Impact Advisory Committee.

Doblin told Lucid News that investors will “will work with MAPS’ appointees to the Lykos Board of Directors and Impact Advisory Committee to develop meaningful public benefit metrics, transparent accountability to those metrics, and mechanisms to keep public benefit front and center. One of the most effective accountability mechanisms links employee compensation incentives to achievement of those metrics, and I’m heartened that the Lykos Board of Directors supports that policy.”

Positive Impact for Investment

The Lykos funding announcement marks a turning point for companies and researchers in the psychedelic ecosystem as movement towards FDA approval of MDMA-assisted therapy is expected to attract more investors.

While MAPS was not able to raise enough philanthropic funding to retain control of Lykos, its pursuit of MDMA-assisted therapy has seeded a new industry for developers of psychedelic-based treatments. The Wall Street Journal noted that other companies in the space have attracted significant capital investments. Last week, Atai Life Sciences announced that it has invested $50 million in U.K.-based Beckley Psytech. In August, COMPASS Pathways revealed that it had sold up to $285 million in stocks and warrants to TCG Crossover Management and Citadel Advisors to help finance its clinical trials investigating psilocybin to treat depression.

Daniel Goldberg, founder of Palo Santo and Bridge Investments said that the Lykos funding round and the Atai investment into Beckley Psytech were the type of substantive financing announcements that were absent from the psychedelic industry last year. “I know that this announcement by Lykos (formerly MAPS PBC) is already having a very positive impact on how sophisticated life sciences investors – as well as pharmaceutical companies – are viewing the potential of other ‘psychedelic-inspired’ medicines being developed,” says Goldberg. 

“Psychedelic drug development startups were very much taken seriously at the JPM Healthcare Conference this past week, and I think that we’re going to hear some positive news from some of the more under-the-radar psychedelic medicine start-ups in the near future,” Goldberg said.

Helena’s Basu, speaking with Lucid News, noted the significance to the psychedelic sector that the Lykos funding round was oversubscribed. “It’s a brutal investment environment out there, and the space has had such a contraction. Our hope is that the strong raise for the PBC will send signals to the overall market that the space is very much investable for the assets. There’s a broader scaffolding and ecosystem around the psychedelic space that will be in need of capital.”

The Lykos Pharma Strategy

Emerson recalls that when she first heard Doblin speak about the medical potential of MDMA, in 2003, that his intention was “to bring this through the regulatory process as a pharma company.” That approach was in stark contrast to other psychedelic advocacy organizations at the time, which focused on academic research. “It was always our intent to have a pharma company. That’s what we would need to have to do drug development.”

Emerson tells Lucid News that the current raise is sufficient for the company to complete the FDA approval process and initiate the first part of a commercial launch. With that approval on track for later this year, it is likely that Lykos will pursue a new investment round within 12 months. Emerson says that the company will soon determine “what money we need to raise in order to get through the first year of launch.”

Emerson said in November that MAPS PBC filed a Form D, or a Notice of Sale of Securities, with the Securities and Exchange Commission which included a valuation figure of $215 million. She noted, however, that this was a preliminary number and did not represent the total after the Series A. 

Lykos’ future capital needs are likely to be considerable. The Wall Street Journal notes that analysts believe that bringing a new drug or therapy to full commercialization costs between $500 million to $1 billion.

Emerson said that the main vehicle for protecting the current investments in Lykos is the period of data exclusivity that the company will have over the sale of MDMA. She noted, however, that they are considering other strategies. “We’re looking at all the traditional ways, but right now the thing that we’re counting on is a new molecular entity, which is the five year data exclusivity. And then we’ll have more information, probably at the beginning of next year, about other ways that we’re looking at. How do we protect this?”

“Patenting is definitely on the table,” said Emerson. “But it would be within our impact goals. How do you do something that still creates open science and doesn’t block research, but also protects the investment that we’re making?”

While the Lykos protocol for MDMA-assisted therapy requires therapist hours as an intrinsic element, Basu says that the company “is not aiming to make any money off of therapy. The main revenue for [Lykos] will be coming from sales of the drug.”

According to Lykos, the FDA has 60 days to determine whether the NDA, that MAPS PBC announced on December 13, will be accepted for review –  and whether it will be a priority or standard review, which would take place over six or ten months respectively. If the FDA approves a priority review, Lykos says the decision regarding approval could take place around August 2024. Rescheduling by the DEA must take place 90 days after approval followed by state rescheduling. 

Enter Helena

Helena’s Protik Basu first became interested in the therapeutic potential of psychedelics two years ago, in his role as chair of the advisory board of the Johns Hopkins Bloomberg School of Public Health. He says the data coming from Hopkins and other research centers left an impression. “As a health guy, I was blown away by the data’s statistical significance. You never see physical significance like this in anything, let alone in mental health,” says Basu.

Then in May 2022 came a call from Austin Hearst and Jeff Walker, who Basu knew from global health initiatives in Africa. Also on the call was Joe Green, co-founder and president of the nonprofit Psychedelic Science Funders Collaborative. “They said that we feel the space is at a tipping point and that the klieg lights are about to turn on,” remembers Basu.

The callers compared that present moment in psychedelics to the early days of treating malaria in Africa. That comparison resonated for Basu. “When I started working on malaria control, it was a $50 million a year industry with 1.2 million kids dying per annum. Over the course of a decade, the enterprise is now close to $2 billion per annum, and it’s down to 225,000 kids dying from malaria. Over 10 million children’s lives saved. I saw what happens on the front lines, when the machine turns on. Financing, political will, operations – that stuff starts to happen and the entire system starts to move.”   

During the call, Basu was invited to the next meeting of PSFC, a community of philanthropists which funds organizations in psychedelic medicine and policy reform, including MAPS. Those on the call expressed concern that increased attention on the promise of psychedelic therapies would attract players whose interests are not aligned with public health. “The incentives fundamentally change when you pull the decimal point over this many digits. It just happens,” says Basu.

He agreed to attend the meeting as a fly on the wall and offer advice. By the end of the day, he was hooked. “Once I saw the entire field represented, I became fascinated by the space,” he says.

During the PSFC meeting, Basu says he also learned about MAPS. A few months later, MAPS approached Helena about a potential investment.

“I said to MAPS, you know, we run a pretty institutional process,” Basu recalls. “It’s long and technically diligent. This is serious LP money. Are you sure you’re ready?” Helena makes only two or three investments a year, according to Basu, and each on average has taken 11 months to complete due diligence. He describes their VC fund as having typical expectations for a market rate level of returns. “And they said, we’re ready. And if we’re not, we need to be if we’re going to grow.”

As part of the diligence process, Basu turned to advisors within the Helena network. Among them was Rachel Yehuda, director of the Center for Psychedelic Psychotherapy and Trauma Research at Icahn School of Medicine at Mount Sinai. Yehuda has collaborated with MAPS on investigating the effects of MDMA-assisted psychotherapy on veterans with PTSD. Another was former FDA commissioner Mark McClellan. They helped Helena understand the opportunity.

By the end of its due diligence, Helena concluded that MAPS PBC was not only a viable investment. It was also playing a critical role in establishing psychedelics as a medicine.

“If MAPS does not succeed,” says Basu, “if MAPS is not capitalized properly, if the FDA process is not successful, if the commercialization process is not successful, one could argue that the setback for the broader field of psychedelics will be quite significant. So if you decide that our mental health care system is broken, and if you also decide and agree that psychedelics will be a core part of the solution, then you quickly work backward from, ‘What is the critical pathway for that needing to happen?’ That critical pathway begins with MAPS, in our view.”

Basu Meets Doblin

A key moment in the emerging partnership came when Basu had his initial meeting with Doblin.

Over the first of several long dinners, they discovered that both are students of liberation theology, an approach to addressing poverty and social injustice that emerged out of the Latin American Catholic Church in the 1960s. Doblin also resonated with Basu’s work in public health, as a board member of the nonprofit Partners in Health, which was founded by Basu’s mentor, the late Paul Farmer.

“After dinner,” Basu recalls, “Rick said, ‘I never thought I’d be having a two-and-a-half-hour conversation about liberation theology with my lead investor!’ I don’t think we talked about the investment at all.”

Basu acknowledges the distance in priorities and culture between a nonprofit advocacy organization like MAPS, and a for-profit pharmaceutical company required to deliver market rate returns. Was the culture difference a cause for concern?

“We wouldn’t be here if it weren’t for the dot org and all the work that Rick and the team have led for years,” says Basu. “They’re stewards of the movement, more broadly, and certainly of MAPS specifically. We obviously had to get comfortable on the financials, on the execution, on the team. We had to diligence PBC for what it was, as an emerging biotech and pharma company that is spinning out from a not-for-profit. It was important to us, given the mission of Helena, to be aligned with MAPS.”

He adds that the personal connection was an essential component of the deal. “It was really important to me to have that mission alignment with MAPS and with Rick. We had a number of long walks, long dinners, about the legacy and his hopes and dreams for the future.”  

In his statement, Doblin describes the involvement of Helena as “a major reason to celebrate” the investment round. “I’ve come to trust Helena and Protik’s sincere commitment to balancing return to shareholders with public benefit, and to supporting nonprofit MAPS’ work to globalize MDMA-assisted therapy for PTSD for humanitarian purposes in high-trauma, low-resourced parts of the world,” he says.

MAPS PBC Becomes Lykos

The name change from MAPS PBC to Lykos Therapeutics has special significance for Doblin, who approved the shift. Lykos is the Greek word for wolf. The word resonates with Doblin, who in his early twenties raised a male Alaskan Timber Wolf, which Doblin named Phaedrus.  

Phaedrus wrestled with Doblin and accompanied him off-leash on runs through the woods. Doblin attributes much of MAPS’ success to lessons he learned from Phaedrus, including confidence and courage. Doblin also notes that, “Wolves, like psychedelics, are often feared and hunted with cultural anxieties projected onto them, but when treated respectfully, are full of love, joy, and acceptance.”

When the forest Phaedrus and Doblin ran in began to get developed and a spot opened up in a wolf sanctuary where a female wolf needed a mate, Doblin gave Phaedrus up. In Doblin’s telling of the story, his visit to Phaedrus two years later turned bittersweet when Phaedrus challenged him for dominance and Doblin realized he could no longer safely be with him. When he called his parents to tell them what had happened, Doblin said his father replied, “What’s the problem? You did it to me.” 

As a guiding metaphor for trust, and the challenges of evolving partnership, the future chapters of MAPS and the wolf it raised are yet to be written. 

CORRECTION

The article has been updated with the correct year that Amy Emerson first met Rick Doblin and started volunteering for MAPS. It was 2003, not 2014.