Kasvu Therapeutics, a University of Helsinki spinout, raised €30 million to develop a novel depression drug. The company arose from the University's breakthrough research.
The drug development company Kasvu Therapeutics (Kasvu) put out announcing it has raised €30 million to develop pharmaceuticals for the treatment of major depressive disorder and other brain diseases. The amount is the largest ever raised for a Finnish pharmaceutical development company at the preclinical stage.
The financing round was led by Norwegian venture capital investor Hadean Ventures focusing on drug development and health industry innovations. Finnish participants in the financing round included Tesi (Finnish Industry Investment Ltd), Innovestor Life Science Fund, Nordic Science Investments, Finnish Drug Discovery Center Ltd, Stephen Industries and University of Helsinki Funds.
The funding helps Kasvu's lead drug candidate KTX-0141, meant for the treatment of depression, to proceed to initial clinical trials. It is expected to be trialled in humans as early as summer 2027.
Kasvu's story is based on long-term work by research groups of Neuroscience Center Research Director Eero Castrén and Professor of Biophysics Ilpo Vattulainen.
For 30 years, Castrén has studied neuroplasticity and antidepressants, including how the latter affect the nervous system and neurotrophic factors. The actual breakthrough took place in collaboration with Vattulainen's research group, where interaction between the antidepressants in use and a neurotrophic factor receptor was successfully modelled on supercomputers provided by CSC - IT Center for Science.
Can psychedelics treat depression without psychedelic effects?
In 2021, Eero Castrén was supervising Rafael Moliner's doctoral thesis. Moliner told Castrén that he would like to investigate psychedelics, compounds that include LSD and psilocybin.
At first, Castrén was sceptical. Even though the benefits of psychedelics in treating depression were recognised in medicine, they also have significant adverse effects. Psychedelics bind to the brain's serotonin receptors, affecting mood and emotions. This is why psychedelics cause psychedelic effects, often hallucinations.
Now Moliner wanted to investigate whether psychedelics can bind not only to the serotonin receptors but also to neurotrophic factor receptors in the brain.
A study conducted in laboratory cell cultures and mice demonstrated that psychedelics also bind to a neurotrophic factor receptor called TrkB, strengthening the effects of neurotrophic factors and neuroplasticity.
The key finding was that no serotonin receptors were needed for a positive plasticity effect. The strong binding and positive effect of psychedelics on brain plasticity via TrkB neurotrophic factor receptors was a global breakthrough. It laid the groundwork for the development of new, non-hallucinogenic TrkB-mediated drug candidates.
Neuroplasticity is an intrinsic property of the brain, enabling the brain to adapt, change and form new neural connections. Plasticity is at its most effective in children and decreases with age, reducing the ability of the brain and the nervous system to regenerate. The strengthening of neuroplasticity is believed to be a key factor in achieving treatment response in depression.
In other words, something new was achieved in the laboratory: neuroplasticity of the brain, similar to that caused by psychedelics, without psychedelic effects.
Invention disclosure led to the establishment of a spinout
An was submitted for the breakthrough, drawing the attention of Jami Mandelin working in drug development at , the technology transfer company of the University of Helsinki. Mandelin is a University of Helsinki alum. He has forged his career with the major international pharmaceutical companies Roche, Novartis and Faron.
"I recognised that an opportunity like this only comes along once in a lifetime."
A company was established around the breakthrough, which was then spun out of the University of Helsinki into its own company in spring 2023. Mandelin became the CEO of the company.
According to Mandelin, the timing of the establishment of Kasvu was optimal as the clinical development of psychedelics had progressed in a promising manner to phase III clinical trials. Finland-based Innovestor Life Science Fund had recently launched a new fund investing in health sciences, with solid expertise in establishing and growing research-based businesses.
"Already in the initial investor discussions, it was evident that the approach based on neuroplasticity was seen as extremely interesting. Even at an early stage, many investors saw the same opportunity as us: if the approach based on TrkB biology works clinically, the effect may extend considerably beyond the treatment of depression."
Mandelin emphasises that drug development is extremely demanding, requiring a great deal of patience, capital and expertise. He has confidence in Kasvu, since its scientific premise is sound, its expertise is international and the drug candidate KTX-0141 has proved promising.
A new perspective on a global challenge
Depression is a significant public health challenge affecting more than 400,000 people in Finland and more than 300 million globally.
According to Eero Castrén, response to antidepressants develops slowly and the topic is sensitive from many perspectives. The SSRI drugs commonly used in Finland were first developed in the early 1990s. their use among young women has doubled in ten years. The effect of SSRIs is based on their ability to strengthen the action of serotonin in the central nervous system. Castrén's research group has shown that they also bind to the TrkB receptor.
Despite many antidepressants being available, of patients treated globally do not achieve sufficient responses to first- and second-line treatments. of people taking antidepressants regularly respond to treatment well, with symptoms disappearing fairly completely over a period of 4 to 12 weeks for 40-50% of them.
The global antidepressant market is large, worth over $20 billion with the United States accounting for approximately 40%.
By harnessing the positive effects of psychedelics on the TrkB receptor without engaging the serotonin receptor, Kasvu is developing something novel. Even a small market share would be a great success.
The technology also enables other research areas
Psychedelics are classified globally as illegal drugs, with a few exceptions. In the United States, psychedelics are used to treat depression in some states under hospital conditions where the condition of the patients can be monitored during the treatment period.
Kasvu has a different approach. Using the tools created by the University, a molecule is sought that binds effectively to the TrkB neurotrophic receptor without binding to the serotonin receptors. This way, the positive effects associated with brain plasticity can be preserved and the hallucinogenic effect prevented, making the drug suitable for home use.
"KTX-0141 has the potential to be a rapid-acting and long-lasting treatment that can be used at home, helping people regain healthier, fuller lives," says Jami Mandelin.
Kasvu's breakthrough may soon also be of interest to international pharmaceutical giants.
"The aim is to grow Kasvu as a Finnish company for as long as possible," says Eero Castrén.
Since the TrkB receptor contributes to the survival and maintenance of neurons, potential applications of Kasvu's technology are also investigated in neurodegenerative diseases, such as Parkinson's and Alzheimer's disease. However, these research areas are still at an early stage.
