Latest psilocybin patent highlights the swirling battle over psychedelics intellectual property

One of the leading companies racing to develop psychedelics as legal medicines was granted a patent last week for a formulation of psilocybin — the hallucinogenic compound found in magic mushrooms — a decision that highlights the increasingly intense battle around intellectual property for potential medicines in this rapidly growing sector.

This is Compass Pathways’ fourth U.S. patent, but its first for a form of psilocybin the company isn’t using in its clinical trials on treatment-resistant depression. The patent works to “expand their intellectual property kingdom,” said Mason Marks, senior fellow and project lead on the Project on Psychedelics Law and Regulation at Harvard Law School: “Like a landlord would want to expand and buy more properties, they’re trying to lock up as much IP as they can to solidify their position in the market.”

The patent, which covers a form of synthetic psilocybin known as “Form A hydrate” and methods of producing it, is useful to Compass as a way to restrict competitors who may be working with a different form of psilocybin. If another company creates psilocybin using that particular structure, then Compass will now have grounds to block them.


“I have no doubts the reasons behind this are to protect a competitive position around psilocybin,” said Graham Pechenik, patent attorney and founder of Calyx Law. The latest patent decision is likely to be challenged by those who believe that Form A hydrate is not new, and so cannot be patented.

Compass defended its decision to seek a patent for its formulation. “As always we’re expecting challenges,” said Compass’s co-founder and president Lars Christian Wilde. “We believe what we’ve found is novel and inventive. … We’re confident in our IP strategy.”


Research and investment in psychedelics has accelerated in recent years. The U.S. Food and Drug Administration has granted breakthrough therapy designation to psilocybin and MDMA (also known as molly or ecstasy), for treatment of depression and PTSD, respectively, a sign that the agency is open to approval if the drugs are shown to be effective and safe in trials. The potential market is huge and extremely lucrative, predicted to be valued at $7 billion by 2027, according to an analysis from Data Bridge Market Research.

Psychedelic drugs, though, both exist in nature and have been studied for decades — MDMA was first synthesized in 1912 and psilocybin in 1938. This makes it challenging for pharmaceutical companies to follow traditional approaches of patenting newly discovered drugs to protect their investments and fend off competitors. Instead, companies are creating more niche patents, such as Compass’s IP on various forms of psilocybin: “They need to figure out how to protect this naturally occurring substance,” said Citi analyst Neena Bitritto-Garg. (Citigroup has received compensation from atai life sciences, which owns more than 20% of Compass, for investment banking and other services.)

There is also considerable debate and competition within the industry about whether and how these drugs should be patented. Compass is due to publish results from a Phase 2b trial with 233 patients for psilocybin therapy for treatment-resistant depression before the end of this year. Meanwhile, the non-profit Usona Institute, which is anti-patent, is running a Phase 2b psilocybin trial for people with major depressive disorder.

Carey Turnbull, a philanthropist who is a board member of several psychedelic non-profits including Usona Institute, created another non-profit, Freedom to Operate, to fight patents that infringe on existing knowledge. He believes Compass’s latest patent should not stand.

“From FTO’s ongoing research, we understand that it is nearly impossible to crystallize psilocybin and not obtain this hydrate,” Turnbull wrote to STAT. “There are several examples of it in the prior art.” He declined to give details of the existing examples while still putting together a report.

Usona itself is not worried about psilocybin patents affecting its work, said president Bill Linton: The non-profit is using a version of the drug that has been in the public domain since 1958.

Psychedelic patents are currently so turbulent, with waves of applications and challenges, in part because many patent examiners are unfamiliar with the space and the existing research, said Marks. The Usona Institute is currently building out a library of existing research, Porta Sophia Psychedelic Prior Art Library, to help prevent patents being awarded on pre-existing knowledge. Psilocybin was first synthesized in the 1930s and, given the large numbers of laboratories, Marks said he’s doubtful there are truly novel formulations left to be patented.

Even among psychedelic patents that meet the technical definition of novelty, the rush to protect formulations simply to block competition, rather than patenting an innovation that’s useful to patients, is contrary to the spirit of IP law, said Marks. U.S. patent law technically requires utility, but this is rarely applied in practice: “Effectively it doesn’t exist.” Other countries, such as India, are far more strict about creating patents that are useful for patients, making IP grabs more difficult, as Marks outlines in a forthcoming Harvard Law Review Forum on psychedelic patents.

“It could be a patent on something that’s useless,” said Marks on the Compass’s latest patent. “I would not make any assumption that it makes any real benefit.”

Different formulations of psilocybin could have varying levels of effectiveness, and Wilde of Compass said the company is exploring whether the latest form could be particularly beneficial under certain conditions.

In his view, all patents are beneficial. IP allows companies to protect innovation, and therefore finance research and bring drugs to patients, he said: “Any patent therefore is in the interest of patients and more broadly in the interest of the field.”

Those pushing back argue that a small number of companies owning the rights to these drugs will make any treatments that are approved more expensive. If the FDA approves psilocybin following Compass Pathways’ research, for example, only the patented synthetic version of the drug would be legal medicine, rather than the naturally occurring substance. “It will affect the barriers to entry for scientific research and the cost to accessing these therapies,” said Marks.

For investors, the crucial question is whether patents are approved and withstand challenges. Ethical questions are less of a concern, said Citi’s Bitritto-Gard: “Investors are profit-seeking.”

So as psilocybin slowly edges toward approval as a medicine, fights over every line of intellectual property are likely to grow fiercer. The eventual patent decisions will determine who controls the supply of psilocybin, and who profits off this hallucinogenic drug.

Source: STAT