Often in the world of psychedelics, what’s old becomes new again. In a 1938 article in the journal American Anthropologist titled “The Appeal of Peyote as a Medicine,” the legendary ethnobotanist Richard Evans Schultes wrote that Native Americans were using low doses of peyote, the button-shaped cactus whose active ingredient is mescaline, to treat a variety of illnesses.
“Some of the ills listed as responding to peyote were tuberculosis, pneumonia, scarlet fever, intestinal ills, diabetes, rheumatic pains, colds, grippe, fevers and venereal diseases,” Schultes wrote. It is used “as a white man uses aspirin,” a member of the Shawnee tribe told him.
Peyote is, of course, best known as a hallucinogen. But while high doses of psychedelics can create visions and give rise to new ways of thinking and feeling, smaller doses turn out to be anti-inflammatory, much like aspirin. They have the potential to reduce chronic, low-grade inflammation, which is associated with coronary artery disease, arthritis, asthma and Alzheimer’s disease.
The anti-inflammatory capabilities of psychedelics are a major focus for Eleusis Holdings, a venture capital-backed biotech company founded in 2013 by Shlomi Raz, a former managing director at investment bank Goldman Sachs.
According to Raz, Eleusis was one of the first startups to work with psychedelics. He says it remains one of the few to explore the possibility that psychedelics medicines can promote physical as well as mental health. Eleusis is currently developing a new chemical compound, ELE-02, that resembles a long-lasting psychedelic called DOI – 2,5-Dimethoxy-4-iodoamphetamine. Eleusis hopes to deliver this DOI analog in the form of eye drops to treat diseases of the retina.
“One of the first psychedelic drugs that may be approved by the FDA, if we move forward quickly, could be within ophthalmology,” Raz says. ”That’s where we’re focused right now, with the longer term ambition to move into neurodegeneration and Alzheimer’s disease.” Eleusis has not yet begun clinical trials of ELE-02.
Compounds For Mental Health Treatments
While Eleusis is developing psychedelic analogs to treat physical ailments, it is also developing drugs for mental health treatments. The company is investigating a new chemical entity known as ELE-Psilo, which is designed to efficiently deliver psilocin, the active ingredient of psilocybin, for the treatment of major depressive disorder. The drug would be administered intravenously to rapidly enter the brain and provide an intense trip estimated to last no more than 20 to 30 minutes. Eleusis scientists say this delivery system could enable faster and lower cost treatments than those using conventional psilocybin.
“What we need to prove is that this type of short but intense drug effect is going to have the same type of antidepressant efficacy (as longer lasting trips on psilocycibin),” Raz said at the Benzing Psychedelics Capital Conference in April. “If we demonstrate that, this becomes the de facto solution, we believe, for psychedelic drug therapy.”
The goal of Eleusis, says Raz, is to make the administration of a psychedelic medicine “more like a dentist appointment and less like a surgery, not just from a commitment of time but from a cost perspective.”
As if that were not enough, Eleusis owns a ketamine clinic called Andala in San Antonio, Texas, which the company says has helped it to better understand how the delivery of care works for patients. Eleusis also aspires to develop a technology platform that will enable existing providers of health care to deliver psychedelic treatments.
How the company will finance all this research and development is the pivotal question facing Eleusis. Eleusis recently canceled plans to go public by combining with a shell company called Silver Spike, which would have provided the company with $288 million to bankroll its operations.
Eleusis has so far raised about $31 million from individual and institutional investors, including Ambria Capital, Neo Kuma Ventures, Noetic Fund and Palo Santo. Like many privately-held startups, Eleusis will not disclose how much cash it is holding but Raz says the company has enough funding to carry it through 2022.
From Goldman to Grad School
Raz spent a decade on Wall Street, first at JP Morgan Chase, then at Goldman, before deciding to quit. “Moving money from one pocket to the other just wasn’t doing it for me,” he says. He entered graduate school at New York University to pursue a lifelong interest in psychology and train to become a psychotherapist.
Two scientific papers helped derail those plans and laid the foundation for his founding of Eleusis. The first was the landmark 2006 study by Roland Griffiths and his team at Johns Hopkins University that found that psilocybin can bring about “mystical-type experiences having substantial and sustained personal meaning and significance.” That led Raz to dig into the scientific literature on psychedelics and mental health. “I became very curious,” says Raz, who wrote his masters thesis on psychedelics and major depressive disorder.
The second paper, submitted by researchers at Louisiana State University Health Sciences Center, had a dry title – “Serotonin 5-Hydroxytryptamine2A Receptor Activation Suppresses Tumor Necrosis Factor-α-Induced Inflammation with Extraordinary Potency” – but, for Raz, it proved more startling. The LSUHSC researchers discovered that low doses of the psychedelic DOI activated serotonin 5-HT2A receptors in the muscle cells of rat heart aortas and rapidly inhibited inflammation. According to the researchers, this finding had profound implications.
“With the exception of a few natural toxins, no current drugs or small molecule therapeutics demonstrate a comparable potency,” they wrote. The scientists suggested that DOI, a synthetic drug related to mescaline, could become an “extraordinarily potent, potential therapeutic avenue for the treatment of disorders” including “atherosclerosis, rheumatoid arthritis, psoriasis, type II diabetes, depression, schizophrenia, and Alzheimer’s disease.”
Two Generations Continue DOI Research
The lead author of the DOI study comes from a well-known family of psychedelic researchers : Charles Nichols, a professor of pharmacology at LSUHSC, who is the son of David Nichols. The senior Nichols is the founding president of the Heffter Research Institute and devoted his career to studying psychedelics as a professor of pharmacology at Purdue University.
“I never thought I’d get into the field of psychedelics,” says Charles Nichols, whose PhD thesis examined the genetics of fruit fly eye development. “Once I found my way there, it was home.”
Raz was impressed. “What Charles Nichols discovered in 2008 blew my mind,” he said. Raz came to think of psychedelics as a “distressed asset” – that is, an asset that had fallen out of favor with most investors because of the stigma surrounding the drugs.
Many investors were then also put off by the fact that psychedelics were then and still are classified as Schedule 1 drugs, which means they have no currently acceptable medical use and a high potential for abuse. DOI is an exception, but the DEA has very recently moved to add it to Schedule 1. On Wall Street, distressed assets are often seen as investment opportunities.
Once Raz raised the money to launch Eleusis, drawing on his personal savings as well as investments from friends in the financial industry, Charles Nichols was named the “scientific founder” of Eleusis. The company became a sponsor of his research at LSU. His father, David, became its director of molecular pharmacology in 2021, and made DOI for Eleusis research. Together and separately, father and son began to methodically study the anti-inflammatory properties of DOI.
Each study built on previous work. In a 2013 study, they first injected mice with DOI, then injected the mice with an inflammatory agent. Subsequently, blood and tissue samples showed that DOI prevented inflammation in some organs, but not in others. A 2015 study focused on mice who received drugs that triggered asthma. The researchers found that activating the serotonin 5-HT2A receptor with DOI helped prevent allergic inflammation in the lungs, and got the breathing of the mice back to normal. In a 2019 study focusing on coronary artery disease, they found that low doses of DOI lowered cholesterol and improved glucose tolerance in mice fed a high-fat diet, in addition to reducing vascular inflammation.
The scientists say they made significant progress in understanding the interactions between psychedelics, the serotonin system, and inflammation. Speaking about the heart disease study, Charles Nichols told Endpoints News, “Translated into the clinic in humans, it would be as if someone was obese, had diabetes, had high cholesterol, and was able to take a low dose of this drug at a sub-behavioral level and really treat several different aspects of the complications of being obese.”
Research Expands and Continues
While investigating DOI, Eleusis also conducted in 2015 a double-blind, randomized control trial of LSD with healthy volunteers, aged 55 to 75, to establish the viability of low dose LSD therapy as a possible treatment for Alzheimer’s disease. According to the researchers, these investigations “yielded reassuring data regarding the safety of low dose LSD in an older healthy population.”
Eleusis’ unpublished research into retinal disease, using the analog of DOI developed by Charles Nichols, also delivered promising results, the company says. “The early studies show that it protects against inflammation at the back of the eye,” he says.
Eleusis has now patented several analogs of psilocybin and DOI, and licensed its lead anti-inflammatory drug from LSUHSC. “Arguably, our IP foundation is one of the strongest in the industry,” asserts Raz.
So far, however, neither the research findings nor the patents have enticed the investors the company needs to move forward. The plan to treat Alzheimers with LSD has been put on hold because the company says it will be costly and take years to research. According to Raz, this will allow Eleusis to focus on advancing its psychiatric and ophthalmology drug candidates into early clinical trials.
The future of Eleusis could depend on a Phase I trial of Eleusis ELE-Psilo, the company’s fast-acting psilocin drug candidate, which is scheduled to begin this summer. If all goes well, Eleusis is “poised to have a massive inflection in valuation,” he said at the Benzinga conference. “The company has access to funding to ensure its successful completion,” Raz told Lucid News.
For the DOI ophthalmology investigations, the company will begin its Phase I study late in 2023, Raz says.
The challenge for Eleusis, as well as for many other psychedelic startups, is that the pace of scientific progress may not be fast enough to satisfy even patient investors. The nonprofit Multidisciplinary Association for Psychedelic Studies (MAPS) ran its first clinical trial of MDMA-assisted psychotherapy in 2004 and is still seeking FDA approval for its protocol. Of course, as a pioneer, MAPS had to overcome many more hurdles than the present group of psychedelic startups. Venture funds typically have about ten years in which to deploy all of their capital and return profits to their investors. The current climate, in which funding for start-ups is falling, adds to the uncertainty around Eleusis.
Raz is undeterred. He says the company expects to announce additional funding in the near future. “We are optimistic about our path forward.”