The Molly Maker: 5 Questions for PharmAla founder Nick Kadysh
Kadysh discusses PharmAla’s MDMA and the logistics of the international MDMA supply chain.
Once Nick Kadysh got radioactive cocaine approved by the Canadian health authorities, he felt he could do anything. At the time, Kadysh was working in government affairs and public policy at General Electric Healthcare; the approved “radioactive cocaine” was used in diagnostic testing for Parkinson’s disease. Kadysh initially got his start in Canadian politics working as a staffer in the parliament. He went on to work for Red Bull and the vape company Juul. A self-described nerd, Kadysh enjoys reading scientific journal articles in his free time, and after he began reading about psychedelics research, he wanted to get involved.
In 2020, Kadysh founded the psychedelics company PharmAla. Initially, Kadysh’s plans were similar to that of other psychedelic companies: develop promising drug candidates for commercialization. The company is developing several novel drugs, but as Kadysh talked with colleagues and scientists, he found they were less interested in those and instead wanted to know if Kadysh had any MDMA — researchers desperately wanted to find clinical trial-grade MDMA to use in studies.
For decades, the non-profit MAPS was at the center of MDMA research and manufacturing; founder Rick Doblin worked with scientists in the 1980s to produce batches of the drug that were used in MAPS’ Phase 2 MDMA clinical trials. So before jumping into the manufacturing game, Kadysh felt compelled to ask for Doblin’s blessing. Once he secured that, Kadysh and PharmAla invested in the technology to manufacture MDMA suitable for clinical trials. PharmAla is now supplying the drug to researchers conducting roughly two dozen clinical trials, as well as Health Canada and Australia’s Therapeutic Goods Administration, both of which allow the prescription of MDMA on a limited basis. PharmAla manufactures the drug in facilities in both Canada and Australia and produces around 2 kilos – enough for tens of thousands of doses – of MDMA per year.
The Microdose spoke with Kadysh about PharmAla’s MDMA and the logistics of the international MDMA supply chain.
PharmAla is making what’s called GMP MDMA — and you call it LaNeo MDMA. What do GMP and LaNeo mean?
GMP stands for “good manufacturing practices” - for MDMA, it means you’re doing all the front end work to make sure that every single time you make a batch of the product, it’s stable and reproducible. We have to quantify everything to an incredibly granular degree – before even producing our first batch, we had to run our process three times and get results within a very tight margin. At first we were making batches of five grams, and the rules are that you can only scale up by a 10x factor each time - so then you try 50 grams, then 500 grams, and finally you can do 5 kilos. It’s a long and in-depth process and at the end of that, health agencies like the U.S. Food and Drug Administration, Australia’s Therapeutic Goods Administration, or Health Canada can look at the results and say yes, this is acceptable, and you can use this in a clinical trial or with patients.
That especially matters when you start to treat patients in the real world - you want to make sure the drug is safe, and a big part of that is making sure it’s stable. If you don’t do that stability work and it turns out the drug degrades while it’s sitting in storage for a couple years, it might do nothing for the patient – you can’t have that happening. That still matters for a clinical trial, of course, but it might be lower risk since in those studies many patients are just getting a one-time dose, rather than a regimen of treatment.
As for the LaNeo name, that’s a marketing thing. This is just generic MDMA and we are very transparent about that. We’re very proud of the fact that we’ve done this, and that other than Lykos, we are the only ones who have gone through the GMP process.
After Lykos’s FDA application for MDMA failed to be approved by the Food and Drug Administration last summer, PharmAla inherited some of their potential MDMA clients. How did that come about?
I know Amy [Emerson, former Lykos CEO], and I hope she doesn't mind me saying that she called me on her last day and she was like, “Hey, we're going through some changes, and if you don't mind, I’m going to send you some people you might be able to help.” That really shaped the last year of our work, because we had to massively hustle to make sure that researchers could get their MDMA. Some were ready to get started right away, and they were terrified that all this work that they put in was just gonna go up in smoke, but we’re really happy we were able to get them what they needed.
There’s this regulatory issue with Lykos that I don’t think is very well understood yet. So if you’re a company, like Lykos, and you have a corporate IND with the FDA, then everything under that IND is referred back to you. [Reporter’s note: IND stands for “Investigational New Drug.” When the FDA grants this status to a company they can transport and distribute a drug that has not yet been approved by the FDA. Lykos has this for MDMA, and Compass has an IND for psilocybin.] Say I’m Lykos and I give the clinical-grade MDMA under my IND to you to run your clinical trial, and you get some crazy adverse event, like somebody grows horns. That would reflect on them, and they might face regulatory risk in putting forward their material.
For our LaNeo MDMA, we don’t have that risk, because we’re not trying to get MDMA approved in the U.S.; we’re leaving that to Lykos. In many ways, it's complementary because it allows us to take slightly more risk. We provided MDMA to UCLA for their schizophrenia trial. I think that's good scientific research; we don't know if it's going to work, but that’s the purpose of experimentation. But they were very concerned that if schizophrenia patients reacted badly in the study, then that could reflect poorly on Lykos.
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How is business going?
In total, we’re contracted to support about 25 clinical trials, and are in discussions with another ten. We’re doing pretty well — last year we did about a million dollars in sales, and we’ve been growing by around 100% a year for the last two years. We’ll continue to grow, but we’re definitely not making enough money to run a full clinical research organization; the amount you need to actually do Phase 2 or 3 clinical trials is monumental, and you typically need at least a couple commercial drugs to do that. We try not to charge researchers a crazy amount of money because we don’t want to bankrupt them. Right now, we have a deal with a research organization in Israel where we’re actually charging them nothing, but they’re licensing their data back to us.
Ultimately the goal is not to keep charging researchers, but to treat patients. In general I am shocked by how little people on the drug discovery side talk about patients; it’s easy to get lost in the science, but for us being a supplier to actual people keeps us grounded.
PharmAla is based in Canada, but between supplying MDMA to patients in Australia and to researchers across the world, you’ve got an international footprint. What are the logistics of shipping MDMA worldwide like that?
In a word: brutal. We now manufacture in both Canada and Australia so we can play some regulatory arbitrage; maybe there's a tariff on Canada but there's not in Australia. We're dancing around this stuff. The general process for shipping controlled substances sounds very simple: the country you're importing to must get an import permit from regulators, and then they send that to us. We go to Health Canada or Australia’s TGA and say, “Hey, we have this import permit - please give us an export permit.” Once you have both of those, you can ship the MDMA.
But the practice can often be more complicated. Here’s an example: We recently shipped some product to Yale for a trial and the product was enclosed in gelatin capsules. It had never been a problem before but this time, someone at the U.S. Department of Agriculture wanted us to get a certificate showing that the cow herd from which the gelatin came from — gelatin is made of cow bones — did not have bovine spongiform encephalopathy. That’s Mad Cow Disease.
So then we went on this journey to find out where the original cattle were from. Turns out that’s Colombia. Then we had to find a veterinarian in Colombia who could vouch for this and sign the paperwork. That held up that delivery for a month.
Another example: Mount Sinai is a client of ours and we learned halfway through the process that the New York Department of Narcotics Enforcement requires you to have a separate license for importing to New York state. We reached out to the relevant person at that agency and they were just like, “Thanks very much for your email. I'm retiring. Somebody will get back to you when you have assigned the job to someone else.” There are often just layers and layers of bureaucracy that gums up the system.
Hopes were high last summer for Lykos’s MDMA application, and after its rejection, the outlook seems a bit murkier. What do you see as the future of MDMA?
The U.S. has 50% of all the biotech dollars in the world, and the rest of the world is the other 50%, so people often take the view that the U.S. is the only country that matters. Maybe it’s because I’m Canadian, but I don't agree. Lykos can do the work to get FDA approval, but the FDA is not the be all, end all of the world. You have a lot of movement in other countries.
That said, I was part of a listening tour that the FDA commissioner did and it seems that they've thought about this issue quite a bit, and I think they are moving in a good direction. But honestly I can't imagine a situation where you have these two first-world nations — Australia and Canada — that have made this available to patients without other countries following suit eventually. You can't put that genie back in the bottle. It may not be moving as fast as those of us in the industry would like it to, but it’s moving forward.
This interview has been edited and condensed for clarity and length.
