Israeli startup bets on psychedelic mushrooms for mental health treatment
MSICS Pharma, which has raised $3.6 million, is advancing clinical trials for PTSD, depression, and OCD.
MSICS Pharma, a company developing medical-grade technology to grow and produce psilocybin, the active compound in psychedelic mushrooms, announced on Sunday that it has raised $3.6 million.
The company was founded by brothers Roei Zerahia, CEO, and Omer Zerahia, CBO. The two previously led Canndoc, a medical cannabis company, which, much like psychedelic mushrooms, experienced a historic regulatory renaissance. Today, Canndoc is traded on Nasdaq and generates over 250 million NIS in annual revenue.
Investors in the round include Fusion VC, led by Guy Katsovich; GlenRock (Leon Recanati’s private investment company), Gooday Investments, Eyal Gura, Shani Investments (Shaul Shani private investment company), David Katzin, SGL Acquisitions, Yaniv Rivlin, Calmy investment company, Sagi Ashkevitz, Ariel Leizgold and L&Co.
MSICS is the sole company in Israel and Europe to hold an official license from the Ministry of Health for GMP manufacturing of psilocybin for medical purposes.
The company's flagship GMP product, MSX-06, is integrated and administered as part of medical protocols for treating complex clinical indications, primarily Post-Traumatic Stress Disorder (PTSD), Treatment-Resistant Depression (TRD), and Obsessive-Compulsive Disorder (OCD).
“We come from the cannabis world. In 2018, we took the company public, and in 2020, after completing our roles, we decided to focus on psilocybin,” Omer Zerahia told Calcalist. “We are currently working with several hospitals in Israel and are awaiting approval to begin treating post-traumatic stress disorder in 100 patients, a condition that has become increasingly prominent since October 7.
“Based on our trials, psilocybin shows strong potential in treating depression, obsessive-compulsive disorder, and other conditions that currently lack effective solutions. In depression, most of our studies have demonstrated very strong results, with up to 70% full remission. We also plan to address eating disorders such as anorexia. Psilocybin works differently from conventional drugs, it affects the brain in a way that allows therapists to treat a range of mental health conditions.”
MSICS's funding round comes on the heels of the historic Executive Order signed by U.S. President Donald Trump. The order directs the FDA to grant "Fast Track" status to psychedelic therapies and expands the "Right to Try" act for veterans and trauma survivors. This move effectively paves the way for the clinical use of psychedelics across various indications prior to final marketing approval, causing the stock of leading public companies in the space - such as Compass Pathways, ATAI Life Sciences, and Definium Therapeutics - to surge by tens of percent on Wall Street.
Operating in Israel, which serves as a global "beta-site" for advanced clinical research, MSICS is already conducting Phase II clinical trials for Treatment-Resistant Depression (TRD) and Obsessive-Compulsive Disorder (OCD), combining its standardized GMP product with proven psychotherapeutic protocols. The company is set to shortly begin a large-scale, multi-center clinical trial for Post-Traumatic Stress Disorder (PTSD) in collaboration with four leading Israeli hospitals.
The company employs approximately 12 people in Israel. It plans to utilize the capital to expand its production capacity, accelerate its clinical trial pipeline, and prepare for commercial registration and supply to global markets that are now rapidly opening up.
