Could Pittsburgh become a leading city for psychedelic biotech innovations? One startup is making that bet.
Pittsburgh-based preclinical biotech startup Mindstate Design Labs announced yesterday that it had raised an $11.5 million seed round to advance its mission of creating psychedelic-inspired therapeutics, including its current lead MDMA-based product for treatment of post-traumatic stress disorder, which the startup hopes to launch clinical trials for by mid-2023.
Founded last year, Mindstate’s founders were selected for the spring 2021 batch of startups through the prestigious Y Combinator accelerator. The biotech startup was also named as a Technical.ly RealLIST Startup last month in the inaugural list for Pittsburgh.
Leading the seed round was Initialized Capital, followed by Metaplanet Holdings, Negev Capital, Day One Ventures, K50 Ventures and Page One Ventures. Additional angel investors of note on the round included Neuralink cofounder Max Hodak, former AngelList CEO Naval Ravikant, Paradigm cofounder Fred Ehrsam and Instacart founder Apoorva Mehta. Mindstate shared that the funding will go toward growing the team, further development of its software platforms and the advancement of its drug candidates into clinical trials.
Cofounder and CEO Dillan DiNardo shared on Twitter that the funding would enable Mindstate to develop new therapeutics to treat the 1 billion people worldwide living with mental health disorders. That work centers on the startup’s AI-powered Osmanthus platform, which allows prediction of phenomenological side effects of psychedelics, according to Mindstate’s company website. Being able to better understand those interactions based on a huge cache of data in the platform means that Mindstate can precision engineer its treatments, making them as effective as mental health therapeutics depending on each individual’s need, the company says.
— Dillan DiNardo (@DillanDiNardo) February 10, 2022
A longtime Pittsburgh resident, DiNardo previously worked as the senior manager for UPMC Enterprises, where he executed and managed investments to more than 50 life sciences companies from the seed stage level to publicly traded ones, according to his LinkedIn. He was also an economic development fellow at Idea Foundry and has experience in consulting for firms like Deloitte and PricewaterhouseCoopers. His cofounder, Tom Ray, has experience as faculty and researcher in the life sciences for the University of Oklahoma, the Santa Fe Institute and the Advanced Telecommunications Research Institute International.
DiNardo shared with Business Insider that the majority of the investments supporting this seed round came after the one-minute pitch he and Ray presented for Y Combinator’s Demo Day. The interest coincides with an increasing amount of interest in new medical uses for psychedelics from longstanding biotech institutions and tech investors alike. DiNardo added in his interview with Business Insider that the timing of the startup’s final pitch for the accelerator coincided perfectly with this rising potential for support of the psychedelic therapeutics industry. Only last year, the Multidisciplinary Association for Psychedelic Studies shared strong Phase 3 clinical trial results for MDMA-based treatments of PTSD.
“The most important thing to understand is that the existing psychedelic states that we’re familiar with, the effects that are possible with drugs that already exist, are likely only a small fraction of the altered states of consciousness that are possible,” DiNardo told Business Insider. And based on the investor profiles for this first funding round, it seems that the mainstream tech world is starting to agree.
If successful, DiNardo and his team could be exactly what’s needed to jumpstart Pittsburgh’s growing life sciences hub, which currently includes a few other fast-growing startups like CytoAgents and Peptilogics, in addition to larger firms that went public last year, like Cognition Therapeutics and Cernostics. DiNardo told Business Insider that he has hopes of both taking a product to full FDA approval through the clinical trial pipeline and licensing or partnering with other biotech firms for other compounds, which each have the potential to bring massive returns to Pittsburgh.
However, Mindstate could not be immediately reached for an interview, so it remains unclear whether the company will grow its Pittsburgh presence or move elsewhere as it further develops its lead MDMA-derived product and others in the future.
Regardless of Mindstate’s future in Pittsburgh, that it attracted such a large seed round in a sector that’s still growing for the city is both impressive and promising. The raise follows a string of recent venture capital deals for the city in the new year, including a $25 million Series A round for Metafy that was announced only last week. This activity follows a relatively dismal 2021 for Pittsburgh in terms of VC deals, and brings hope that maybe the new year will be on track to keep up with the record-breaking national deal volumes seen across the country last year.
Sophie Burkholder is a 2021-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.-30-