Jupiter enters psychedelics space with $100M deal for PharmAla's MDMA drug

Jupiter Neurosciences will pay $3.3 million upfront to Canada's PharmAla Biotech for the U.S. rights to an MDMA drug to treat neuropsychiatric disorders. The drug, dubbed ALA-002, is a patented, non-racemic MDMA formulation developed by PharmAla for treatment-resistant post-traumatic stress disorder (PTSD), anxiety and other neuropsychiatric conditions. PharmAla's MDMA supply is already being used in U.S. government-sponsored Veterans Affairs and Defense Health Agency clinical trials, according to a July 21 release. In neuropsychiatric disorders such as PTSD, the brain’s alarm center, called the amygdala, is overactive, leading to fear and anxiety. MDMA is a psychoactive drug that, when taken, can lead to an increase in neurotransmitters such as serotonin and dopamine, otherwise considered ‘happy’ neurotransmitters, which can decrease the hyperactivity of the amygdala. As well as the upfront payment, Toronto-based PharmAla is eligible to receive milestone payments and ongoing royalties that could bring the deal's total value up to $100 million. This includes a $3.3 million payment if ALA-002 makes it into a phase 3 trial, and a $20 million payday if ALA-002 bags FDA approval. “This agreement significantly expands our CNS strategy by adding a differentiated clinical-stage asset that complements our Parkinson's disease program,” Jupiter CEO Christer Rosén said in the release. “We believe ALA-002 addresses a large unmet medical need and provides Jupiter with a second independent development opportunity.” The asset seems a good fit for Jupiter, which is focused on finding ways to treat neurological disorders by getting drugs to the brain. The company's lead asset is jotrol, a pill that uses nano-sized structures to deliver resveratrol—a type of natural phenol found in certain plants—to the brain at therapeutic levels without gastrointestinal side effects. Jotrol is currently in phase 2 study for Parkinson’s disease. MDMA-focused biotechs suffered a setback in 2024 when the FDA rejected Lykos Therapeutics’ treatment for PTSD. But the broader psychedelics space has been gaining momentum since then, thanks to encouragement from the Trump administration as well as last week's $2.8 million buyout of AtaiBeckley by Eli Lilly.