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A millionaire couple is threatening to create a magic mushroom monopoly

Almost 50 years since US president Richard Nixon declared psychedelic mushrooms illegal and “of no medical use,” mounting scientific evidence suggests he was wrong. A small, controversial company is now leading the effort to turn magic mushrooms into a pharmaceutical product, and is stirring up intense criticism from psychedelic experts who believe it’s trying to dominate the market.

Scientific studies of psilocybin, the psychedelic compound in magic mushrooms, have been on the outskirts of serious medicine for decades. But a recent series of small studies has sparked a “psychedelic renaissance”: It seems the same psychedelic trips and loss of ego that made magic mushrooms a feature of ritual spiritual ceremonies for millenia also make them a promising treatment method for mental-health conditions such as addiction and post-traumatic stress disorder. These findings have laid the groundwork for larger, international studies that have the potential to lead to legal medicinal use of the drug.

Compass Pathways has set itself up to be the first legal provider of psilocybin, having recently launched a massive clinical study across Europe and North America to test the drug as a treatment for depression. Last month, Compass’s psilocybin received “breakthrough therapy designation” from the US Food and Drug Administration (FDA) meaning the study will be hastened through the drug-development process. That puts Compass well ahead of other institutions working in this field—and a recently filed patent application could help the company stay ahead.

Prior to founding Compass, George Goldsmith and Ekaterina Malievskaia, a married couple, did not have experience in psilocybin research or working in the pharmaceutical industry. They’ve made headway thanks to tens of millions in dollars from investors including Silicon Valley libertarian Peter Thiel and former Wall Street-executive-turned-cryptocurrency-investor Mike Novogratz, along with the expertise and guidance of many long-standing psilocybin researchers. (Neither Thiel nor Novogratz responded to requests for comment.)

But many of those psilocybin experts now regret having helped the couple. Quartz spoke with 9 psilocybin experts who advised Goldsmith and Malievskaia, but today express concerns about the company’s motives and aims. These experts worked with Compass in different professional capacities: some had individual contracts, some were invited to attend Compass-hosted conferences or trips, and others worked (and some still do) for psychedelic research organizations that collaborate with Compass. All 9 raised questions about Compass’s intentions and professionalism, and worried that the company’s rush to bring the drug to market would create risks for patients. “You build this tower in a rush…and before you know it, it’s on fire and we can’t put it out,” says one academic, who requested anonymity for fear of retribution from Compass. Six had opportunities to work further with Compass but turned them down as a result of their concerns.

These experts are further troubled by the company’s business structure: Having first registered as a charity, Goldsmith and Malievskaia set up a for-profit corporation working towards the same ends just one year later, and closed their non-profit less than two years after that. And all 9 of these critics charge that Compass Pathways has relied on conventional pharmaceutical-industry tactics that could help them dominate the field, including blocking potential rivals’ ability to purchase drugs, filing an application for a manufacturing patent, and requiring contracts that give Compass power over academics’ research and are restrictive even by pharmaceutical-industry standards.

A Compass company spokesperson says both Malievskaia and Goldsmith were unavailable to talk concerning the allegations in this article. The company did not respond to multiple requests for comment about specific incidents and allegations, though did provide two written statements in which Compass disputed all of the critics’ charges. “The allegations you have heard are simply false,” said a spokesperson in one of the statements, which charged (without providing specifics) that the critics that spoke to Quartz were misinformed or “malicious[ly] bias[ed].”

“Patient well-being and safety are at the core of everything we do and every decision we take,” said Malievskaia in the other statement. “Nothing is more important to us. We are setting the highest standards in our clinical trial. Our treatment protocol and training programme has been designed by a group of the world’s leading experts in psilocybin therapy. It is consistent with the highest patient safety standards and has been reviewed and approved by regulators including the FDA.”

Compass says its move from a nonprofit to a for-profit model was driven by its desire to develop psilocybin therapy at scale in a “sustainable manner,” and that the original non-profit “was created, run and closed in compliance with all laws in the UK and the US.” And Compass disputes allegations that its business practices are designed to dominate the psychedelics industry. “We do not control or seek to control the psilocybin market,” the company said in the statement, arguing that its intellectual property practices “enables us to develop a sustainable business model that will help us make psilocybin therapy available to as many patients as possible.” Some in the field agree that Compass is simply ruffling feathers in a field that’s not accustomed to for-profit corporations. “There’s a bit of professional envy, jealousy, whatever you want to call it, related to somebody starting a for-profit corporation,” says David Nichols, professor of pharmacology at Purdue University, and chairman of the Heffter Research Institute, a nonprofit organization focused on promoting psychedelic research.

There is no dispute that the depression medications market—valued at $14.51 billion worldwide in 2014 and predicted to grow to $16.80 billion by 2020—holds the potential of lucrative returns for investors. A company that both gains regulatory approval in North America and Europe for medical use of lab-synthesized version of psilocybin and controls the necessary intellectual property could have the power to determine both the costs of and treatment methods for medical-grade synthetic magic mushrooms.

The story of Compass is a story of what happens when business concerns, driven by the clinical potential of a naturally occurring substance, enter a field unaccustomed to them. The study of psychedelics has long existed on the fringes of medical science. Now that it’s on the verge of legitimacy, one company’s alleged maneuvering to seize any gain is sparking deep feelings of betrayal, and serious questions about the practices that it’s using to get there.

A charitable beginning

Before Goldsmith started Compass, he was involved in work that made him especially well-suited to wrangling with regulatory agencies for the medicinal approval of a formerly illegal drug. In 2002, he founded a company called Tapestry Networks, which creates “leadership networks” in government, financial services, and health care. Drug developers made up a major client group, and paid Tapestry Networks to arrange meetings with medical regulators, including the FDA and European Medicines Agency (EMA), with the goal of accelerating drug approvals, according to Goldsmith’s bio for a 2016 conference. An April 2014 Harvard Business School case study on the company notes that “Tapestry faced lingering questions about the…legitimacy [of all meetings the company set up] and whether they facilitated greater ‘coziness’ between regulators and the regulated.” Goldsmith stepped down as chairman of the company in order to run Compass. Neither he nor Tapestry Networks responded to requests for comment about the legitimacy of Tapestry Networks’ meetings.

Malievskaia, meanwhile, grew up in Russia, where she got a medical degree from St. Petersburg Medical Academy, according to her Compass bio. She later moved to New York, where she received a master’s degree in public health from New York University Medical School in 2000. The health care website Vitals lists her as a doctor specializing in internal medicine and practicing in New York.

Otherwise, not much is known about Goldsmith and Malievskaia’s personal histories, or how they met, say multiple people who worked with them.

When Goldsmith and Malievskaia first started meeting with psilocybin academics and going to conferences about psychedelics in 2013, they talked about using psilocybin to treat end-of-life anxiety for terminally ill patients, rather than depression. In June 2015, they set up C.O.M.P.A.S.S. (“Center Of Mental health Pathways And Support for Self-directed care”), a charity organization based in California, focused on this cause.

While C.O.M.P.A.S.S. operated as a charity, Goldsmith and Malievskaia turned to numerous high-profile psilocybin researchers and psychologists for guidance. The couple asked many of these prominent figures to serve as informal advisors for their nonprofit, and learned from these experts’ years of research while gaining legitimacy from their association with them. According to C.O.M.P.A.S.S.’s 990 tax forms1, the charity owned intellectual property during this time, which Goldsmith and Malievskaia later transferred to personal ownership. Compass did not respond to a request for comment about the nature of this intellectual property.

Read more: QZ.COM

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