Terran’s End Game
To our knowledge, Terran—in its sixth year of operation—is yet to advance a single psychedelic drug candidate through clinical trials, nor has it publicly committed to a specific clinical development pursuit in the psychedelic space.
As such, one might assume that Terran is primarily interested in striking licensing agreements for its psychedelic compounds, either voluntarily from those interested in developing certain compounds or through compelling existing developers with assets in development to licence Terran’s competing and blocking IP.
Companies that find the compounds in their development programs captured by any of Terran’s patents might now be at a crossroads: with Terran’s tollbooth set up in one direction, while the other road might be characterised by freedom to operate uncertainty.
One way forward for companies looking to maintain clear freedom to operate is to pivot to a new form of the drug that’s clear of Terran’s tollbooth. But pursuing this avenue might mean completing requisite bridging studies in order to demonstrate that the alternative candidate is pharmaceutically and biologically equivalent. Bridging to an alternative form might also entail redoing Chemistry, Manufacturing, and Controls (CMC).
Not only would this solution require a developer to commit additional financial resources to their development program, it would also delay an already lengthy drug development process; in turn, chewing away at any existing patent life and diminishing future revenues.
Terran, meanwhile, might stand ready to negotiate a licensing agreement with such a company that would allow for continued development without the need for backtracking. While the terms of such an agreement could cost a company a considerable sum, it may be the case that, over the life of the product, licensing makes the most commercial sense.
Licensing agreements might not only come from companies who have found themselves outmanoeuvred by Terran, though. In light of the company’s apparent efforts to patent competitors’ compounds, any granted IP might be attractive to companies looking to bring common molecules to market as competitive alternatives to those already in development.
One such example might be salt form alternatives to COMPASS’s crystalline polymorphic psilocybin. By developing patentable salt preparations of psilocybin that can be approved as independent APIs, Terran has potentially patented a portfolio of competitive alternatives to the crystalline psilocybin API that may one day be approved. Whether they decide to develop these in-house or out-licence is yet to be seen.
In cases such as this, interest might also come from companies facing the prospect of having new competitors eat away at their market share. Thus, Terran might also be able to market its IP to developers seeking to keep their target markets free of competitive alternatives, generics, or competing programs.
For example, if COMPASS Pathways sought to monopolise the market for psilocybin further it could, in theory, investigate licensing salt form IP from Terran that would effectively enable it to block competitors from developing any viable alternative salt forms of psilocybin.
While the strategies discussed above might prove lucrative for Terran if pursued (and, assuming that companies in the space have the resources to engage in licences on terms attractive to Terran), they could also stifle innovation and accessibility by disincentivizing early drug development or aiding further monopolisation and staving off generic entry.
In particular, their recently published PCT on solid forms of 4-HO-DiPT hemiglutarate might have complicated the IP landscape for that candidate to such a degree that licensing costs for an interested fourth party could prove to be prohibitive, given that Reunion, Mindset, and Terran all now have—to varying degrees—claims to the 4-HO-DiPT prodrug.
What’s more, it’s unlikely that Terran will be able to pursue claims to all of the many laundry lists of compounds, combinations, compositions, and methods disclosed in their applications, especially where only supported by prophetic examples. In total, Terran’s published provisionals and PCT applications total around 12,000 and 10,000 pages of disclosure, respectively.
However, all of that disclosure is now prior art to others, making it more challenging for others to protect those now-disclosed forms and compounds. While this could certainly impede further innovation, it could also, in theory, increase the value of the compounds Terran may eventually hold claims over, as the company—even without securing patents—has effectively limited the latitude of others who seek to work with similar alternatives.