Tryp Therapeuatics (TRYPF) Coverage Report

The venture capital industry has been accelerating its interest in psychedelic companies over the past three years. From <$100M invested in 2018 and 2019, each, to ~$350M in 2020 and almost that much by April 2021 (CB Insights). And after a series of late-stage private rounds, Atai (ATAI; $16.48; NR) IPO’d June 18, 2021, raising more cash (~$225M more) and valued at ~$2.3 billion. Overall, we find the psychedelic industry to be one of biotech’s most interesting and investable spaces, as we look begin to turn the corner towards more mid-to-late-stage clinical readouts over the next year or two. With continued success, we view psychedelics to be the most disruptive category in mental health since SSRI’s were introduced more than a generation ago. 5. The models for legalization of psychedelics are being addressed. Like any disruptive technology, there will be challenges and changes to current protocols resulting from the introduction of psychedelics. In our view, we see several key changes, including regulatory, healthcare practitioners, societal, patients and patient care.  Regulatory. In terms of regulatory, we view the FDA’s August 2017 designation of MDMA-assisted psychotherapy as a breakthrough therapy as an important step toward acceptance of hallucinogens as mainstream mental health treatments. Also, the March 2019 approval of Spravato (esketamine) for refractory depressive disorders is supportive as well. As has occurred with other medical conditions such as 5q- syndrome and opioid addiction, the strong relationships between academics and the FDA can impact the approval of novel technologies regardless of the risk/benefit of novel technologies and the degree of unmet needs of patients. Here, we find the increasing support of leading academic centers as supportive for the regulatory discussions required of novel treatment approaches.  Clinical study designs; real world clinical settings. On a related note, we find the clinical settings for psychedelic-assisted psychotherapy sessions to be an important element for the FDA, which is likely to rely on REMS programs to ensure proper training and delivery of a psychedelic in a controlled setting and to follow the clinical settings in the NDA filings. As has occurred in the treatment of opioid addiction, ~106,000 healthcare practitioners have earned a DATA-2000 waiver to treat opioid addicts seeking treatment (www.samha.gov), which includes retention of buprenorphine (Schedule III) in their offices for dosing during counseling sessions. We expect a similar program will be developed for psychedelic-assisted psychotherapy sessions. In fact, training of psychedelic counselors is already a well-established practice for companies like Fluence. On August 24, 2021, Tryp announced it is partnered with Fluence, which just completed training for the counselors at the University of Florida to conduct Tryp’s Phase 2a binge eating trial (www.fluencetraining.com/) . We believe all of Tryp’s upcoming Phase 2a designs will include weekly sessions similar to or the same as the following: o Week 1: Two preparatory psychotherapy sessions o Week 2: Dosing session #1 and two integration sessions o Week 4: Dosing session #2 and two integration sessions o Weeks 5-7: Two final integration sessions, ~two-to-four weeks after dosing session #2  Third-party payers. In terms of reimbursement, as evidenced by Sage’s reported discussions with payers over its depression treatments, we expect psychedelics’ reimbursement to be based on an annual basis rather than on chronic, monthly dosing. So, durability of effect will be important for psychedelics. Michael Higgins 212.409.2074 Tryp Therapeutics, Inc. (TRYPF) Page 8