“11% of Americans contemplated suicide in the month of June. We need novel solutions and treatment paradigms.”
Sa’ad Shah is the co-founder and managing partner of Noetic, a venture capital firm that seeks to invest in emerging and early-stage psychedelic-based wellness, therapeutic and pharmaceutical companies. JR Rahn is the co-founder and co-CEO of MindMed, a leading psychedelic medicine biotech company that discovers, develops and deploys psychedelic-inspired medicines and therapies to address addiction and mental illness.
Psychedelics in medicine represent an entirely new biotech asset class. Psychedelics still carry with it the stigma of its recreational use in the 60s and 70s, but its application as a therapy is intended help people with mental health and addiction issues. Psychedelic-assisted therapy involves a trained therapist who guides the patient through the experience. “The science has been incredibly compelling. The efficacy rates cannot be ignored.”
The current approach to treating mental illness and addiction continues to fall short. The opioid crisis is going to cost the US $2.5B over the next four years with 300 people per day dying of overdoses. Mental health is likely to decline even further because of the pandemic. “With the lingering effects of COVID-19… the pandemic is going to turn into a mental health epidemic.”
LISTEN AND SUBSCRIBE
SPEAKERS
Sa’ad Shah
Co-Founder & Managing Partner
Noetic
JR Rahn
Chief Economist
Exelon Corporation
EPISODE TRANSCRIPT
John Darsie: (00:11)
Hello, everyone and welcome back to the SALT Talks. My name is John Darcy. I'm the Managing Director of SALT, which is a global Thought Leadership Forum and networking platform at the intersection of finance, technology, and public policy. SALT Talks are a digital interview series with leading investors, creators and thinkers. And our goal on these SALT Talks is the same as our goal and our SALT Conference Series, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to bring you a talk focusing on the future of medicine within the psychedelic space with two fantastic guests.
John Darsie: (00:53)
Our first guest today is JR Rahn, who's the Co-founder and Co-CEO of MindMed, a leading Psychedelic Medicine Biotech Company that discovers, develops, and deploys psychedelic inspired medicines and therapies to address addiction and mental illness. JR, is a former Silicon Valley Tech Executive, who was previously at Uber and attended the prestigious tech accelerator Y Combinator. After his own struggles with mental health and addiction in Silicon Valley, he began looking for a new treatment paradigm with the potential to solve mental health and addiction related issues. JR began personally investing in psychedelic medicine projects and research through his family office run capital, and then went on to found the biotech company MindMed to focus on developing psychedelic medicines, under the federally compliant FDA pathway. MindMed was the first psychedelic medicine biotech to publicly list on a stock exchange, and the company now garners a one billion plus market cap.
John Darsie: (01:51)
The company has filed an up listing application for a potential listing of its shares on the NASDAQ. And our second guest today is Sa'ad Shah, whose firm Noetic is actually an investor in MindMed. But Sa'ad is the Co-founder and managing partner of Noetic, a venture capital firm that seeks to invest in emerging and early stage psychedelic based wellness, therapeutic and pharmaceutical companies around the world. Sa'ad has spent the last 22 years in capital markets and the asset management industry, with a focus on alternative investment strategies. Prior to founding Noetic, Sa'ad was a Managing Director at the Carlyle Group. He's also the Co-founder and managing partner at Grey House Partners, a venture capital, at Alpha Partners, and an affiliate partner at Lindsay Goldberg, and adventure advisor to Learn Capital, LLC. He's also a filmmaker, a scriptwriter, and producer, and a board member of the Necessary Angel Theater in Toronto, and the Council of Advisors for The Windy Museum in Los Angeles.
John Darsie: (02:52)
Hosting today's talk is Anthony Scaramucci, the Founder and Managing Partner of SkyBridge Capital, a global alternative investment firm. Anthony is also the chairman of SALT. And with that, I'll turn it over to Anthony for the interview.
Anthony Scaramucci: (03:05)
Well, guys, thanks so much for coming on. I'm going to start with JR if that's okay. I would like you JR to give our audience a broad overview of the thesis behind psychedelics for medical use, but also take us through your personal journey to how you got to MindMed.
JR Rahn: (03:23)
Oh! Thank you, Mr. Scaramucci. Look, I think psychedelic-
Anthony Scaramucci: (03:27)
You got JR. You got to call me Anthony. Okay, because in a few minutes, John Darcy and I are going to be beating the hell out of each other. Okay. And I have to feel young for that experience, because you got to call me Anthony.
JR Rahn: (03:39)
All right. You got it Anthony. Look, I think, if we take a step back here and look at this space, we're really have created and founded a new asset class. This is a new biotech asset class that is focused on mental health. And while it might be based on substances from the 1960s that have associations, like LSD and psilocybin, really what we're focused on is mental health and how do we heal people. And that's really where the journey for MindMed began, which is the first publicly listed psychedelic biotech company. I was at the height of my career in Silicon Valley, I was working at Uber and then went through the Y Combinator program and was faced with some severe addiction and mental health issues. And to the outside world everything was going fine. I was struggling with my addictions but, working well and getting things accomplished in Silicon Valley, until a friend really told me-
Anthony Scaramucci: (04:47)
If you don't mind me asking because I'm from a family of addictive disorders. So what was your addiction of choice or what was not choice, but what was the thing that you were drawn to right? And I want to stipulate for the purposes of SALT Talk, coming from an addictive families that have addictive disorders, I recognize that it is an illness. It is not a choice. I didn't mean to say it that way. But what was drawing you in JR?
JR Rahn: (05:17)
Well, I think you do have the choice to do something about it right? I think, definitely isn't an illness, but it takes-
Anthony Scaramucci: (05:23)
Definitely we have a choice to do something about it. But I do think that once you're caught up in it, it's a hard cycle to break because of the biochemistry in your body. Would that be fair to say?
JR Rahn: (05:35)
Totally. So, my drugs of choice were cocaine and alcohol. And I really struggled with this, basically from the beginning of college, right? And even in high school, I think that goes back to your struggles with ADHD and mental health being put on stimulant based medicines from the age of 13, you really start to develop patterns. And you're right, it is a brain illness, and it is a mental illness. And those patterns start early as a kid. And so they know that really culminated in Silicon Valley, for me. And I had a friend turn to me at one point and say, "Look, you're going to put yourself into a grave. I had other friends die. These are folks that were working, at large tech companies die of overdoses, die of these are really serious diseases." And so I decided that I wanted to make a change, right? It was I was either going to die, or I was going to solve the problem. And so I didn't really see the traditional routes of addiction treatment and how we treat mental health in America as really effective ways of dealing with these problems.
Anthony Scaramucci: (06:58)
Okay, so let me interrupt again, if you don't mind, just talk a little bit of that for our viewers. So the traditional treatments are a 12 Step Program. And you see Alcohol Anonymous Manual is going to a rehab center, perhaps for 28 days. There's some psychotherapeutic treatment to that. And then there's also the conditioning process of attending meetings, either a Nar-Anon meeting, or an Alcohol Anonymous meeting, where you're laying out your story, and you're sharing. And so one of the things that we have found with these diseases, by making it communal, and bridging a gap and having people help each other creating that matrix, it sustains people's ability to stay off of the, addiction. And so your therapeutic idea is what JR?
JR Rahn: (07:49)
Well, look, I just want to call out that I think that Alcoholics Anonymous and NNA are important pieces to solving addiction.
Anthony Scaramucci: (07:58)
Yes.
JR Rahn: (07:59)
I think there are, actually, what people forget, is that the 13th Step of the AA was actually supposed to be an LSD trip. But that was what it was originally thought up to be by the founder. That never happened because of the 1960s. But I think it's important to point that out. Our paradigm really is looking at how do we create catalysts for change in your behavior, that when you're dealing with addiction, and ruminating thoughts about anxiety or depression, you really need that catalyst. And some people can do it without a psychedelic. But what I found was that psychedelic medicine is not going to be a panacea to solve all our problems in society. However, they can be catalysts for us to change our behavior, and there's still a lot of work that needs to go in and after-
Anthony Scaramucci: (08:50)
Before we get to Sa'ad, and we are going to get to him in a second, I want to push you a little bit on psychedelics. So because there's a stigma of psychedelics, right? We had that the mushroom, the LSD, and the hippie. It's gets created this 50 year stigma of psychedelics, but yet, there are people that attributed psychedelics to giving them major breakthroughs in life, and major transformation in the way they think about Planet Earth. So step back for people that don't know a lot about psychedelics. Tell us a little bit about the origin and side, forgive me for one sec, we're going to get to you in a moment. But I want you to give this introduction to people that are not familiar with psychedelics and don't need to be afraid of psychedelics, they need to be informed about them. So go ahead JR.
JR Rahn: (09:37)
Yeah, so I mean, modern psychedelics, the things that we talked about, like LSD were really invented inside pharmaceutical companies. They were invented at Sandoz Laboratories, which is now part of the pharmaceutical group Novartis. Many folks might have heard of something called Bicycle Day, which is the infamous day that LSD was actually discovered by Dr. Albert Hoffman, who's a chemist at Sandoz. He was riding home and he liked to test the molecules that he was working on. And after getting home, he realized that there was something very powerful in the experience that he had with LSD. And I think the reason that they've been stigmatized is simply due to headlines that happened in the 1960s, it probably wasn't a, great idea to give everybody a bunch of LSD and ask them to go off and fight a war in Vietnam at the time.
JR Rahn: (10:30)
And so, I think what we're still dealing with as an industry is psychedelics do have this stigma, but in many ways, they can be deeply therapeutic. And we talk about psychedelics. But really what it is, is psychedelic assisted therapy, there's a therapy component to it, you will take a psychedelic, you will sit with a therapist or psychiatrist, and they're guiding you through an experience to realize why you're having some of these underlying causes, to your addiction, to your anxiety, to your depression, to your PTSD. And ultimately, this is the new paradigm to use a drug in combination with therapy, ultimately, is what we are pushing forward as an industry.
Anthony Scaramucci: (11:19)
So, Sa'ad you have this prolific career in institutional investing, you've been at some of the more premier places. Why do you? Why are you excited about the psychedelic space as it relates to an investment outlook in psychedelics?
Sa'ad Shah: (11:40)
Sure. So first of all, Anthony and John, thank you for having me here. Quite frankly, I really missed the old SALT conferences, the live conferences that were incredibly informative, insightful, and-
Anthony Scaramucci: (11:52)
We're going to be doing LSD trips at the next one, so I may or may not be two hours away, oh! LSD boutique over there. But go ahead Sa'ad. Tell us why.
Sa'ad Shah: (12:01)
So it's a mix, really. It's a mix of a personal journey for me. And an investment sector that makes a hell of a lot of sense for many reasons. So from an investment perspective, Anthony, in a previous life, we ran a fund of funds that focused a great deal on Esoteric Strategies. They were very new in their life cycles, we actually sought them out. And in many cases, we seeded many of them. Strategies like reinsurance and whether derivatives in commercial litigation, finance and music, royalty, business, pharmaceutical royalty business, that's one that dovetails very well with what's going on here. But a key aspect of that was that these strategies were quite new in their lifecycle, and a lot of the capital initially stayed away, because they found it complex. So what we did was, we put these strategies together in a portfolio for investors, predominantly institutional investors, and said, "We will manage the complexity for you."
Sa'ad Shah: (13:03)
But there's definite and distinct Alpha, it may be fleeting, but the Alpha is there, the ability to generate returns greater than what the markets are delivering. But the best part of it was that these strategies were very uncorrelated to the market. So in years 2008 2011 they did well. When we've been following what's happening in psychedelics for a long time, and what's been driving us to the psychedelics apart from the personal, journey, which I'll get into, is the fact that the science has been incredibly compelling, the efficacy rates here just cannot be ignored. And ultimately, we bet on the fact that everything will follow the science, the money will follow the science, capital will follow the science, institutional investors will follow the science.
Sa'ad Shah: (13:48)
And it's utterly compelling, right? There have been on three occasions now that the FDA has designated psychedelics as breakthrough designation BTD, you can go onto the FDA website and take a look at every instance, they've designated anything as BTD. So it's a big deal, which really means that they're saying that, okay, well, this has over 70 75% efficacy rate, to treat that particular ailment, give it the green light, let it go to phase one, let it get, let the process start. And, there was 2017, 2018 and 2019, twice with psilocybin or magic mushrooms, and once for MDMA. So, but the complexity comes in, and when you've got the DEA at the same time saying,"Well hold on a sec, this is a schedule and abuse list." And these are harmful, so they need to stay on that list.
Sa'ad Shah: (14:42)
But as these things get through their, clinical trials, which are fast approaching, they're going to get off the DEA list. So for us, this is a prime example of a strategy that early this life cycle complex, it's mispriced as a result it's under priced, right? And, the efficacy rates will start to be quite readily apparent to, the public to the markets. And these things are going to be priced accordingly. So for us, this is, it's also disruptive, massively disruptive. It makes sense. And, it there's a seven year history behind it that people tend to forget that thing. It's just something new. This has been going on for a long time.
Anthony Scaramucci: (15:26)
So you have but you have this interesting intersection of activity, right? So let me read you some of these statistics, a 40 million Americans suffering from anxiety annually, only 37% are seeking treatment. You've got 11% of the American adults reported seriously considering suicide in June, at the height of the pandemic, you have the potential reality of 800 million people being out of work as a result of automation coming. And you've got addictive disorders, the opioid crisis costs two and a half trillion dollars to America, at least that's the projection over the next four years. How can this help? Tell me let me ask you, I'm a person has anxiety, I've contemplated suicide, what would be the therapy JR? What am I doing? I come to MindMed and then what happens?
JR Rahn: (16:25)
So MindMed still developing drugs, right? We're going through an FDA federally regulated process, and I hope that we can eventually help folks that have considered suicide and also have anxiety. So we're our project, Lucy, which is LSD assisted therapy, went to the FDA in December for a Pre-IND meeting. And we sat down with them and said, "Look, we think that our LSD assisted therapy can be used with folks that are having generalized anxiety disorder or anxiety. And we want to conduct some clinical trials around that." And so they gave us a very, it was a very successful meeting, we had a very open dialogue, we didn't originally anticipate that it was going to be so open because LSD has a stigma. But I think what's interesting at the FDA, is they're very open to conducting these clinical trials, because the FDA focuses on two things.
JR Rahn: (17:26)
It doesn't focus on politics. Focuses on is something safe and is something effective. And that's really important because the mental health dilemma and situation of America right now is far worse than the political divide we currently have. I mean, 11% of Americans considered suicide in the month of June, that's up double from what it was a year ago, before COVID started. This is, we need novel solutions and treatment paradigms. And so eventually, what we want is for you to come to a clinic or in the comfort of your own home, and be having a psychedelic experience using LSD assisted therapy, with either a transit psychiatrist or therapist that will, guide you through this experience.
JR Rahn: (18:14)
We also are working on some interesting tech that if the experience, one of the major things Anthony that people ask me is, well, what if the trip is too much for me? I have anxiety and I have considered suicide. But what is this experience that you're suggesting to me as a medicine, it's just too much? How do you stop the trip? So one of the things that we're working on is an LSD trip stopper. And it will effectively allow a therapist or psychiatrist, if the experience is getting out of hand, if you as a patient aren't feeling comfortable, we can actually stop it. It's not our preference to, but we feel that in order to get mass adoption by both psychiatrists and potentially-
Anthony Scaramucci: (18:57)
You're giving somebody a kill switch if they need it. But so, and I was mentioning this to Sa'ad before we started our SALT Talk. There's a fabulous new biography on Cary Grant. Scott Ehrman just wrote it, new information. He was using LSD, he was suffering from anxiety, suffering from depression. And he was using LSD with the help of a psychotherapist back in the 30s, and 40s. And it was revelatory for him, and it helped him break the cycle of anxiety and depression. And so, how does it do that? For either of you? How does it break that cycle? What happens to the mind with a psychedelic that would cause that breakage?
JR Rahn: (19:44)
So I think there's two things and I'll let Sa'ad also answer but I think that the two main components that one should really look at here is around neural plasticity of the brain, actually breaking the patterns that have rumination. For example, on anxiety or depression, those things that are making you anxious, actually looking at it and talking through the underlying causes of why they are creating anxiety for me. I discovered an LSD experience that the reason I was consuming lots of cocaine and alcohol was really to numb myself from the death of my mother when I was an eight year old child. And those are things that you think about every day. And it certainly wasn't something that I thought about. And so what we talked about is another term called ego dissolution, which we find, we just did a phase one study in Switzerland, with our collaboration with University Hospital Basel, that really looked at what is the ideal dose of LSD, to actually achieve something called ego dissolution? Which is, allows you really to self reflect and think outside of, your day to day ego.
Anthony Scaramucci: (20:50)
And I'm going to stop you JR if you are okay. So when you say ego dissolution, means that we have this ego, which is this fortified layer, it's a husk around our brains, personality that protects us from the outside world, they know it's our self talk, it's our self confidence, it's our layer of protection. When you create ego dissolution now, you're able to observe yourself in your most natural state, in terms of the way you came in to the world through nature, as opposed to these environmental behavioral protections that you've developed. Is that fair to say?
JR Rahn: (21:30)
Yeah, I think it helps break down that Kevlar. I mean, I think what I realized my experiences, was that we're just all children wrapped in Kevlar, we get more and more expensive Kevlar as life goes on. But really what that experience is doing is exactly what you say breaking down that husk and I think that's something that people rarely ever do the self reflection.
Anthony Scaramucci: (21:53)
I mean, that was one of the more scary revelations for me that when you become an adult, you're just an overgrown child. Okay. And so then you think, Oh, God! Some of these overgrown children have the nuclear codes and then you start really well.
JR Rahn: (22:06)
So you started it not me.
Anthony Scaramucci: (22:08)
But Sa'ad, have you ever done LSD?
Sa'ad Shah: (22:11)
I have. Yes.
Anthony Scaramucci: (22:13)
So what was your experience with it?
Sa'ad Shah: (22:16)
Was very much as JR suggested it was, a melting into the entire cosmos or with the entire cosmos and an overwhelming feeling of oneness. So, my journey Anthony started in college, but not in the way that you think. I did my undergrad in economics and finance and political science, but I spent all my life studying esoteric philosophy. So I was passionate about the Kabbalah as it pertained to Judaism, and Sufism, and pertain to Islam and Gnosticism and Rosicrucianism, Hermeticism, Good Gurdjieff, Blavatsky, so on. And then that somehow led me to want to learn the whole science behind energy, frequency and vibration. So I studied quantum physics. And what I found particularly interesting in quantum physics, is that you need to have an observer consciousness present, in order to determine whether the electron is going to behave as a particle or a wave, or both. So my question was, what if you altered that state of consciousness? And that's exactly what psychedelics do. They alter the state of consciousness. But if you alter the state of consciousness, theoretically, should your entire reality change? And according to the math, there's a strong case for that, of course, that reality actually changes. So-
Anthony Scaramucci: (23:32)
Well does it always change for the better? Or could your reality change?
Sa'ad Shah: (23:36)
No, I think what psychedelics do really, is that they amplify the unconscious. That's what really happens, right? You, it shuts off the default mode network, right? In our brain. So that's where ego is, that's where memories are. That's where our sense of who we are and our role.
Anthony Scaramucci: (23:58)
But Sa'ad, does meditation also do that. Is meditation a way to get there as well?
Sa'ad Shah: (24:01)
Yes. Think of it like a pyramid. So meditation can get you there, you can start anywhere at the bottom of the pyramid. But when you get to the top, you're all getting to the same point. So meditation can do that. Beating getting beaten almost to death can do that. Some major, massive stress can do that, spending 40 days and 40 nights in the desert can do that, right? You see where I'm going with this. So there's, a lot of other factors that can play that can get you into an altered state of consciousness. Psychedelics do that as well. But the key thing with psychedelics is that they really amplify the unconscious. I'm going to go back to something that JR mentioned earlier on, which is this whole notion that psychedelics are not dependency, they're not the, it's not the Holy Grail. They are simply a catalyst.
Sa'ad Shah: (24:49)
They are the key that opened the door, but you still got to open the door and walk through it. But if you're walking through the door, and you're in a room with an 800 pound gorilla, that's pretty scary. So what psychedelics do is that they reduce the size of that problem down to a bite size, which is much more manageable. And it allows you to deal with that issue, whatever that issue may be your own personal traumas, it could be ancestral trauma, it could be whatever. And now you're in a position to deal with it. And that's what has been profound. And that's where the research has really come in to show that.
Anthony Scaramucci: (25:23)
When was the last time you did cocaine JR?
JR Rahn: (25:27)
Last time I did cocaine would have been two years ago, after I really embarked on being going through a few different psychedelic experiences, and realizing that I had a beautiful daughter, had a great life. And there's absolutely no reason to put this stuff up my nose.
Anthony Scaramucci: (25:47)
And so the psychedelic experience of, so you, said, "Okay, I've got to get off of cocaine, this is ruining my life." And so the psychedelic experience, I'm going to tie both of you in here in a second. So what Sa'ad is saying is this ego dissolution, you're in that state where your subconscious is, raised up, and you're starting to recognize all the great things that you have in your life. And so is that enough to overcome the biochemical or the mental addiction to the cocaine?
JR Rahn: (26:21)
Well, I think there's two, I think you're dealing with two things, right? I think there's a need for an experiential therapy like, LSD, which gets you to the point or a few that gets to the point of understanding what is the underlying cause of my addiction? For me, it was the death of my mother, right? I need to go through that experience. Now, there is a lot of science, if you look at Nora Volkow's work at the National Institute on Drug Abuse that looks at dopamine, and how dopamine is a huge driver of addiction. And so another thing that we're working on is called 18-MC. It's derived from a psychedelic called Ibogaine. And what we're trying to do is create the antibiotic of addiction. As an addict, when you do a line of cocaine, you get that great sense of euphoria, that's actually a spike in dopamine in your brain. And over time, if you do that too many times, you're depleting the amount of overall available dopamine in your brain. And so your baseline dopamine level that makes you feel good and normal, actually goes down. And so as an addict, you are no longer doing a line of cocaine in my case, to get high. I could do an eight ball of cocaine and feel just normal. I wasn't I didn't feel high. And-
Anthony Scaramucci: (27:42)
So for people on here, that eight ball is eight grams of cocaine, that's a very large amount of cocaine. And, somebody new to cocaine wouldn't be able to do that right away, they wouldn't have enough resistance to your point, their dopamine levels wouldn't be lower enough even right?
JR Rahn: (28:00)
Correct. Yeah. I mean, it wasn't doing that in one sitting. But I think it makes a point that you're really depleting that dopamine in your brain. And somehow we need to bring that level back up and an addict. And eventually, we want to get a person to a point where, they can have a glass of wine, maybe one glass of wine, if you are an addict and still have a normal life. I think that's-
Anthony Scaramucci: (28:27)
Right, because that one glass of wine can trigger you. So the Alcoholic Anonymous people talk about abstinence, because they're afraid you're going to get triggered the glass of wine lowers your inhibition, you're like, okay, let me go to the code.
JR Rahn: (28:40)
Yeah, but there's no solution right now for cocaine on the market zero. For opioids, you have methadone, which is just a little bit less harmful narcotic. We're not moving the needle, no pun intended there. To get people better, you're just putting them on something that is a little bit less addictive, or sorry, more addictive, but less harmful to their bodies. And so I think this is a, huge issue we got to deal with as a country as well, the opioid crisis is going to cost this country two and a half trillion dollars over the next four years. I mean, these are not small problems.
Sa'ad Shah: (29:17)
If I can just add to that, Anthony, obviously, the opioid crisis and mental health is the real epidemic here. And that's the biggest problem and it's getting worse and worse. There are 300 people in the US dying a day now of just drug overdose. And it's never been this bad ever. Suicide rates among men between the age of 45 and 55 is going up. Teenage suicide rates are going up and everything that's out there in the market that we just talked about SSRIs, SNRIs. They're all trying to treat the symptoms but nothing out there is going after the root cause there's been very little innovation in any of these, other SSRIs SNRIs since it came out In the 80s, with Prozac. So no innovation, these drugs are off their patent cliff, there's not much of an interest from Big Pharma as a result to take a look at these, they're focused more on oncology.
Sa'ad Shah: (30:11)
And that's why there's this vacuum created. But quite frankly, because of the political initiatives that underwent in the 70s, that really derailed this process, we're finally coming back with a hell of a lot of information, and a lot of actual cases of individuals that have overcome their addiction. Gabor Mate was a doctor up in Vancouver, who has been helping heroin addicts his entire career. Talks about, he says, "What does it really mean, for a heroin addict to be on heroin?" And as the first time ever heard, something that really put it in perspective, he said, "For heroin addicts, it's like, when the heroin, when they're on heroin," sorry, "Their mother's given them a warm blanket. And, really nurturing them, giving them a hot bowl of chicken corn soup, or chicken noodle soup, and just, being there with them." That's what they feel.
Sa'ad Shah: (31:10)
So what's happening in the brain is if you can substitute heroin, for something that makes you feel just as satiated, and just as nurtured and loved, that the promise there has been what psychedelics and particular plant medicine have been able to offer.
Anthony Scaramucci: (31:26)
So-
Sa'ad Shah: (31:27)
What? Yeah, sorry, go ahead.
Anthony Scaramucci: (31:29)
No, I mean, I was going to thread both of you together. I'm going to turn it over to John in a second, because I know he has a series of questions from our audience. But what you're basically saying is we have in front of us something that could help our addiction disorders? It got derailed due to politics and the sociology around psychedelics in the 60s. But had we just progressed, the scientific research, we could have gotten to the point where we are now where this could be a therapeutic, that could solve a lot of these problems abate some of the two and a half trillion dollars that you're suggesting, on the opioid crisis and things like that.
Anthony Scaramucci: (32:13)
And there's a market opportunity for this side, right? Fair enough this would be a very profitable line of pharmacology, if you will, because it's obviously solving great societal problems. And you guys are at the forefront of this. Okay, so with that, I'm going to turn it over to John, because we got to get ratings. Okay, so for some reason, the two of you are all fogies, apparently now, I'm an old fogy, which, I find revolting, and he's a millennial, okay? So for some reason, he gets ratings and so forth. So we have to bring them into the conversation at this point. Otherwise, we probably won't get the ratings that we want. So go ahead, Darcy. You I know you have questions for these guys.
John Darsie: (32:52)
Yes, Sa'ad. I want to build on what Anthony was just talking about in terms of the social stigma attached to psychedelics today. And we had a long conversation when we were first planning out this SALT Talks about your personal experiences with psychedelics and how it transformed your state of consciousness. But in general, in terms of how society looks at psychedelics, you made it very clear and JR made it very clear that you're not looking to be cannabis 2.0. This is not a movement about legalizing LSD or other psychedelics for recreational use. This is specifically about the medical use and supervised use of clinical psychedelic treatments. Can you talk about where we are in the regulatory and social acceptance of psychedelics, and how you strive to be different from the cannabis movement?
Sa'ad Shah: (33:40)
Sure, so first and foremost, when folks talk about cannabis and psychedelics, I quite frankly, don't really get it. And, they're completely two different paradigms altogether. Cannabis is all about a recreation play. It's been a movement that's been going on for a while. There, it's linked to so many other political issues, recidivism, the incarceration rates, and so on. But, it's a recreational play, right? That's where the real revenue is. What's happening in psychedelics is a form of play. This is about biotechnology, it's about creating an entirely new ecosystem, as well around it, because it's not just a take this pill and it will solve your problem.
Sa'ad Shah: (34:28)
It's about creating the therapy around it. It's about the set and the setting the intentions, and it's about post session, integrative science, which is what now I've had my psychedelic experience, how do I make sense of everything that I've just, experienced, and I've seen and I've just sensed and, how do I now take that and live my day to day life with, this, issue that I'm carrying and, they need help with that. So, that's what wonderful about this about what's happening in this Renaissance movement.
Sa'ad Shah: (35:03)
Because it's there's a whole infrastructure that's going to be born out of it. There's a therapist, there's a supply chain, there's the upstream, the midstream and the downstream side of the equation is the whole supply chain endeavor. So that's, this is going to be a multi-billion dollar industry, which is going to go into trillions of dollars, I have no doubt about it in due course, over the next, 7-10 years, for sure. Now, the one we-
John Darsie: (35:31)
[inaudible 00:35:31] experience Sa'ad, before we go any further, what really, resonated with me when we began when we were planning this, SALT Talk about your personal experience we heard from JR, about how in his personal life, how psychedelics have been able to heal some of these issues that were latent in his consciousness, but tell us about your experience with Ayahuasca.
Sa'ad Shah: (35:51)
Right, so my first experience with psychedelics is at the age of 38. I was one of those just nerdy, geeky guys, I was reading a whole lot about altered states of consciousness, because that's where that, esoteric strength studies and quantum physics led me to. And I read one of the authors, his name is Graham Hancock, who wrote a profound book called Supernatural and all he was trying to do was trying to explain why is it that cave art, which is 50,000 years old, found in South America, found in Australia and in Europe, vast distances from each other, resemble and have the same features? And his conclusion was, through great research was that these were done by individuals that had had some form of a psychedelic experience. And then they drew this.
Sa'ad Shah: (36:35)
And so there were distinct patterns that were recognizable throughout, regardless of your ethnic background, your upbringing, ethnicity, so that was fascinating. I contacted Graham, and we became good friends. And he invited me down to Brazil. So I went down to Brazil in 2009. Like I said, I was 38 years of age, never had any psychedelics before. And spend two weeks down there trying to understand the Shipibo traditions and their ways. And there were a bunch of other professors and anthropologists there, and a few individuals that were suffering from stage four cancer, stage three cancer and other mental health issues. What I saw there was profound not only in terms of the journey that I went through, and what I saw on, through Ayahuasca, but in particular, the stage four cancer, ovarian cancer patient is still living, the stage three cancer, pancreatic cancer patient is still in remission. And, there was a suicidal ideation case there, that individual is still living.
Sa'ad Shah: (37:32)
So I knew that there was something to do here. But I didn't know as an investment management professional, what the hell I could do, there wasn't an industry, then there was not much to do in terms of investing in this space. Until we saw what happened in 2017 2018. With what, Compass and MindMed. MindMed, just for the record was our first ever investment we've made 19 investments in this space, seen over 250 different opportunities been very selective. And, now, this is an industry that you've got, well over 30 publicly traded companies in this space. There are 400 private companies that are in this space working on various molecules or aspects of this industry. So it's, now become an industry that can invite a lot of capital. And that's what we've seen. So that's the personal journey that got me to the point where I just didn't know what to do about that experience. But I knew that it was profound at so many different levels. For me, personally, I can just say, and obviously, this is very subjective.
Sa'ad Shah: (38:43)
My tolerance levels went up, I became a better father, I became a better husband, I became a better son, a better co-worker, my fears went away. My fear of death, my whole relationship with death and understanding of death went away, a lot of my inhibitions went away. So it made me a lot more grounded. It made me a lot more in touch with everything, and just a healthier individual, what I call a, much wealthier individuals. So that's my personal journey there.
John Darsie: (39:17)
Thanks for sharing that Sa'ad. JR I want to move to you. Sa'ad talked about the size of this psychedelics movement. And, MindMed is not the only player in the space, you're one of the larger players, but could you talk about just the growth of the psychedelics market institutions that have started to come on board and exciting growth prospects that you're seeing within the psychedelics industry?
JR Rahn: (39:40)
Well, look, I think, really 2020 was the start of, the publicly listed component of the space and you saw, both ourselves and Compass go public that the in 2020. All both achieving unicorn status in terms of evaluation along with a tie. So there's really a clear pack in front when it comes to ourselves and, other more upstarts in the space. But what I think, when we talk about psychedelic medicines as a new asset class in biotech. It's also in many ways a new paradigm for how we're treating mental health. And we're doing a really bad job of treating mental health in America.
JR Rahn: (40:31)
It's the bastard child of the American healthcare system. 60% of US counties don't have a psychiatrist. 80% of our SSRI or anti depression medications that are prescribed, which aren't really, helping people in many instances are prescribed by doctors, just normal GPs, that or your family doctor, they have no specialization in psychiatry. And so what I think the overall Blue Sky opportunity here in psychedelics is not just the drug trials that are undergoing here, I think it is that they will be catalysts for building out further infrastructure to retool how we treat mental health in America. And, I think we, spend just under $300 billion a year on behavioral health in America, we're going to need far more than that spending wise, to treat some of the issues that are coming out of here.
JR Rahn: (41:31)
40% of Americans, have some form of a mental health issue or an addiction during COVID. These problems aren't going away. If you look just even at Rat Park models, which are, where they took two sets of rats, and they put one set in isolation the other to lay around to run around in a little city, the consumption of addictive substances went up 18 fold we just had the largest Rat Park model in human history just happened to us with all these lockdowns. The lingering effects of COVID-19 on our mental health, as a society and globally. To me, the pandemic is going to turn into a mental health epidemic. And it's good that companies like us exist, and that we're rethinking how we treat mental health in this country and globally.
John Darsie: (42:25)
So Sa'ad building on what JR just said, why did you go out and start Noetic to tackle these issues that you're seeing in society as well?
Sa'ad Shah: (42:34)
Thanks, John. Sure. So Noetic was a very organic endeavor, really, it was three partners coming together. Realizing that this is a space that we wanted to get involved in, we saw what was happening with Compass, with ATI Live, SAGE Therapeutics, Perception, Life Sciences, and we wanted to invest. So we pooled our own capital together. Of course, investment, as I mentioned, was MindMed. And we just started to grow the portfolio. And slowly we started to attract family members and friends. And they said, "Well, what are you doing?" And we're like, "Well, we're very excited about this space, but not for everybody. But, but we think it's going to be huge." And, that just, it really just grew from there.
Sa'ad Shah: (43:16)
We've got a fund now that has assets under management about 40 million, we've made 19 investments, we've had a few realizations as well as generated 189% return profile. So it's an exciting area for sure, but it's really moving at breakneck speed. There are five companies in our portfolio that are public, we only invest in private, right? That have gone public there about four or five more that are slated to go public. So this market is moving fast. Obviously, the public markets are responding very favorably to psychedelics as well, because it's actually getting to the root cause of the issues and solving the problem, as opposed to just treating the symptoms. And everybody following up on the science.
Sa'ad Shah: (43:58)
Now, what's particularly pertinent, is that when you get CNN, 60 Minutes, New York Times, Washington Post, Wall Street Journal, Bloomberg all start to report on psychedelics in a very favorable light, that this is beyond just a fad or a trend or movement. This has really, taken off and so, ours was an organic endeavor, which, we've closed our first fund, we're going to be launching a second fund, which is more for institutional investors. And that's why I feel that platforms such as this are very, important. We need to this industry needs to get the institutional investors involved here. And they are taking note, there's a first ETF that just went up horizons ETF on psychedelics, they're going to be more that are going to follow. So certainly institutions are working up to this, but institutions really need to pay attention to what's going on, pay attention to the science and play a meaningful role going forward. And that's what we want to try and help and support.
John Darsie: (45:01)
JR we have a couple minutes left. I want to finish with you talking about the regulatory side. So where are we? Are you more optimistic now with a new administration coming in that might be a little more open mind to these treatments and in specific states? What type of measures and progress have we seen adopted, that gives you hope about the future regulatory environment for psychedelic treatments?
JR Rahn: (45:23)
Well, I think, with the incoming Biden administration, and, let's see how that goes. But, the Blue Wave that, could be undergoing here, I think, is positive for the psychedelic space. I think there's going to be more spending on behavioral health and mental health. I think the opioid crisis was attacked by the Trump administration right? They came out and they declared war on it. We have more opioid deaths this year than we did when the outgoing administration started. So still very big problems to solve. But what I think is interesting is that the space is becoming far more institutional. When I first started fundraising for MindMed, nobody really took me seriously in Silicon Valley, they just didn't think that this space was going to be possible. There were early folks like Sa'ad's Noetic Fund and, others that took some big bets on us and were rewarded handsomely as we went public this year. We're starting to see, lots of the Hedge Fund Community from New York come into this space in a very, big way.
JR Rahn: (46:39)
Their characters that are in the in billions, the series that are, going on Ayahuasca sessions, all the real life, folks that, are the basis for those characters are investing in companies like ourselves. And, I think that's just an overall destigmatization, but also a wake up from Wall Street, that mental health and addiction can be a very big industry. And unfortunately, it's probably going to be a boom industry because of what's transpired here in lockdown and COVID. But coming back to your question around on the regulatory framework that we work under and what's ongoing in the United States, currently, everything that we do needs to be federally compliant, our institutional investors require it. We have taken investments from some very big institutions that manage academic institutions money. And so, anything that we do needs to be federally compliant as a promise I made to one of our first seed investors, Kevin O'Leary, he had no involvement in the cannabis space, because they weren't going and approaching their space in a federally compliant manner. So everything we do is at the through an FDA pathway.
JR Rahn: (47:54)
Or if we do a drug trial overseas, it's through a nationally registered health regulator. But there is movements, there are movements. For example, in Oregon, you saw Measure 109 pass, I think the reason that this Measure pass and just to clarify what that is, and it basically, we got, legalized the use of psilocybin therapy in the state of Oregon, it has a two year hiatus before it can come into effect. We think there's a positive step in the right direction. But our ambition as a company is to make medicines for all Americans that are scalable, and institutional grade business. And so we need everything to be federally compliant. And we find that the FDA pathway is going to be the most efficient pathway to achieve that for both our shareholders and our patients. We don't want a scenario where it's legal in one state, but it's not legal, in the other.
JR Rahn: (48:55)
And, that doesn't really build a big business or help a lot of people. Our objective is to heal people. So I think those are positive movements. But I think what people and investors should really be looking at are not the political process that are behind psychedelics, they should be looking at the data and the science, the safety and the efficacy, because that's what the FDA cares about. And we think that's the most efficient pathway and the FDA is very receptive to what we are working on here. And they should be because these are, very large problems in society that we need to solve over the next few years. After, this pandemic closes up.
John Darsie: (49:36)
And another piece that resonated with me when we were talking before we did this session was SSRIs, which are a common prescription for people that are suffering from a variety of different ailments, whether it be addiction, anxiety, depression, the efficacy rates of those drugs are, very low, I think somewhere between 10 and 30%. So this provides another alternative that really gets to the root causes, as opposed to the type of experimentation you see with SSRIs?
JR Rahn: (50:03)
Yeah, thanks so much.
John Darsie: (50:04)
Yeah. Go ahead, JR. Just comment on that briefly.
JR Rahn: (50:07)
Yeah, SSRIs are also highly addictive. They're not easy things to get off of. And so it's something to consider, these are the substances that we're working on if you look at the toxicity, and we still have a lot of preclinical work that we need to do across different psychedelic molecules, but these are relatively non-toxic substances that we're dealing with, and relatively easy to get drug trials up and running in the phase one and phase two.
Sa'ad Shah: (50:40)
Yeah. And just too important note without any physiologically addictive properties. That's a very important feature. Right, that-
John Darsie: (50:49)
Right.
Sa'ad Shah: (50:49)
So...
John Darsie: (50:51)
Well, JR Rahn, and Sa'ad Shah, thank you so much for joining us today on SALT Talks. These are type of topics we'd love to dive into. It's an emerging asset class from an investment perspective. And it's something with huge potential returns not just on investment capital, but of human capital and the ability for us to finally start addressing this epidemic as JR referred to mental health issues that has only been exacerbated by the COVID-19 pandemic. So thank you so much for joining us. We look forward to reprising this conversation, either in the future on SALT Talks, or like you mentioned Sa'ad earlier one of our in person conferences, potentially later this year. So looking forward to that, and thank you so much for joining us.
Sa'ad Shah: (51:27)
Thank you, John. Thank you, Anthony. Thank you, JR.
Anthony Scaramucci: (51:31)
Nice.
John Darsie: (51:32)
Thank you, everybody who tuned in to today's SALT Talk on psychedelics. It's definitely an interesting topic that we're looking forward to exposing more people on. If you missed any of this episode, you can always access our archive of SALT Talks on our YouTube channel, or on our website@salt.org\talks\archive. And you can also sign up for all of our future talks@salt.org\talks. Please tell your friends about SALT Talks. We love growing our community. If you found this conversation interesting. Please refer people to our website salt.org where they can participate both in our conferences and in the SALT Talks. And please follow us on social media. We're on Twitter, Facebook, LinkedIn and Instagram. On behalf of the entire SALT team. This is John Darcy signing off for today. We'll see you back here again tomorrow on SALT Talks.