ASX biotech share rockets 47% on 'landmark decision'

Australia just became the first country to allow ecstasy and magic mushrooms to be used to treat mental disorders.

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Late Friday, Australia became the first country in the world to recognise ecstasy and magic mushrooms as medical treatments.

Officially, the drugs approved for use are 3,4-methylenedioxy-methamphetamine (MDMA) and psilocybin. 

The Therapeutic Goods Administration made the surprise announcement that both would be allowed to be prescribed by psychiatrists from July onwards to treat mental disorders.

The milestone triggered investors to pile onto one particular ASX stock on Monday morning.

'The only ASX company' in position to take advantage of TGA decision

Furious demand saw the share price for neuroscience and mental health biotech Emyria Ltd (ASX: EMD) rocket 47.4% upwards after just 38 minutes of trading on Monday.

The company itself had recognised the TGA announcement before the session, calling it a "landmark" decision in a statement to the ASX.

"Emyria… is well positioned to accelerate patient access to MDMA-assisted therapies following recent TGA regulation changes."

While the TGA was mulling over the decision, Emyria had set up "a network of clinical partners", formed a supply chain and "developed a comprehensive Phase 2B clinical trial protocol for MDMA-assisted therapy".

According to Emyria managing director Dr Michael Winlo, the "mental health crisis" globally continues to bear tremendous social and monetary costs.

"Which is why the TGA's move to reschedule MDMA and psilocybin is timely and world-leading," he said.

"Emyria is well-prepared to support the safe provision of MDMA-assisted therapies under this new change as the only ASX company with a clinical service specialising in unregistered medicines and real-world data generation."

He added that the company has "also developed a comprehensive MDMA-assisted therapy protocol that can now support specialists".

Drug discovery program

Emyria also has fires burning for related products. It has launched an "MDMA-inspired drug discovery" program in conjunction with the University of Western Australia.

"The partnership has now developed, screened and filed IP for over 140 proprietary, neurologically active and novel MDMA-like compounds with the potential to become registered treatments for a range of neuropsychiatric disorders and new psychedelic treatments."

The Emyria board stated that the TGA decision would create a pathway for "registration and reimbursement for MDMA and its analogues".

"We believe the TGA's decision will allow Emyria – and its partners – to build a stronger evidence base for treating mental health conditions with psychedelics and make a large and positive impact for patients globally," said Winlo.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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