Finland's Kasvu Therapeutics Raises €30 Million to Take a Non-Hallucinogenic 'Brain Plasticity' Depression Drug Into the Clinic

Depression is one of the world's most common and disabling illnesses, yet many patients find that existing treatments either do not work well enough or take weeks to have an effect. A young Finnish biotech company believes a new approach, rooted in decades of research into how the brain rewires itself, could help.

Kasvu Therapeutics, based in Helsinki, announced on Thursday, September 24, that it has raised €30 million in a Series A financing round led by Hadean Ventures. The round was joined by new investors Tesi, the Finnish Drug Discovery Center and Stephen Industries, alongside existing backers Innovestor Life Science Fund, Nordic Science Investments and Helsinki University Funds, according to the company's announcement and European Biotechnology Magazine.

The funding will be used to advance the company's lead drug candidate, KTX-0141, into clinical development for major depressive disorder.

The science of neuroplasticity

Kasvu's work is based on the research of Eero Castrén, a professor at the University of Helsinki, whose laboratory has studied how antidepressants work at the level of brain plasticity — the brain's ability to form and reorganise connections between neurons.

Central to this research is a protein called brain-derived neurotrophic factor (BDNF) and its receptor, TrkB. BDNF plays a key role in the growth and maintenance of neurons and in the formation of new connections. Castrén's research group has published influential studies suggesting that several classes of antidepressants, as well as psychedelic compounds, may exert part of their effect by acting on TrkB and enhancing its response to BDNF.

That insight opened a new possibility: if the therapeutic benefit of these drugs depends partly on TrkB, it might be possible to design a drug that targets that mechanism directly, while avoiding side effects linked to other receptors.

What KTX-0141 does

KTX-0141 is a small-molecule drug designed to amplify TrkB signalling in response to BDNF. Rather than switching the receptor on artificially, it is designed to enhance the body's natural signalling, preserving the physiological control of the pathway, according to European Biotechnology Magazine.

Crucially, the drug is designed to target the same binding pocket on TrkB that psychedelics act on, while avoiding the 5-HT2A serotonin receptor, which is responsible for the hallucinogenic effects of psychedelic drugs. In preclinical studies, the company says, KTX-0141 showed enhanced structural and functional neuroplasticity, with no hallucinogenic activity observed.

If that profile holds in humans, it could offer a significant advantage. Psychedelic-assisted therapies have shown promise in clinical trials for depression and other conditions, but they require patients to be monitored for hours during treatment, raise safety concerns for some patient groups and face regulatory and social barriers. A drug that delivers similar plasticity-related benefits without hallucinations could potentially be taken more conveniently and by a wider range of patients.

The path to clinical trials

Kasvu plans to begin clinical development in the second half of 2027. The company intends to run a Phase 1/1b programme that will include an initial assessment of efficacy in patients with major depressive disorder, including a control arm.

That design is ambitious for an early-stage trial. Phase 1 studies typically focus on safety and dosing in healthy volunteers. By including patients with depression and a control group at an early stage, Kasvu aims to gather early signals of whether the drug works, which could help it attract further investment for larger trials.

Kasvu was founded in 2023 as a spin-out from academic research, a common path for European biotech companies built on university science.

A large unmet need

The need for better depression treatments is vast. The World Health Organization estimates that depression affects hundreds of millions of people globally and is one of the leading causes of disability worldwide.

Current antidepressants, most of which target serotonin and related neurotransmitter systems, help many patients but have important limitations. They often take several weeks to show benefits, can cause side effects that lead patients to stop treatment, and do not work adequately for a substantial share of people. Patients who do not respond to multiple treatments are often described as having treatment-resistant depression.

In recent years, new approaches have emerged, including ketamine-based treatments and psychedelic-assisted therapies. Their apparent ability to produce rapid effects has renewed scientific interest in neuroplasticity as a therapeutic target — exactly the area in which Kasvu is working.

Europe's growing neuroscience investment

Kasvu's round is part of growing investment in European biotech companies targeting TrkB and neuroplasticity across psychiatric, neurodevelopmental and neurodegenerative conditions, according to European Biotechnology Magazine.

It also highlights the strength of the Nordic life-sciences ecosystem. Finland, with its strong universities, research institutions and public investment bodies such as Tesi, has been building a pipeline of biotech start-ups based on academic science. Hadean Ventures, which led the round, is a Nordic life-sciences investor.

The syndicate's mix of specialist venture investors, a state-backed investment company and a university fund reflects a common model for financing early-stage European biotech, where public and private capital often work together to bridge the gap between laboratory discovery and clinical trials.

Risks and uncertainties

As with any early-stage drug programme, the risks are significant. Many drugs that show promise in preclinical studies fail in human trials, either because they are not effective enough or because of safety concerns. Psychiatric drug development is particularly challenging, as depression is a complex condition, placebo responses in trials can be high, and measuring outcomes can be difficult.

KTX-0141 will need to show that its preclinical effects on neuroplasticity translate into meaningful improvements in patients' symptoms, and that it is safe for longer-term use.

Why it matters globally

Mental health is a global challenge. In India, as in many countries, depression is widespread and significantly under-treated, with shortages of psychiatrists and psychologists and continuing stigma around seeking care. New treatments that are effective, faster-acting and easier to deliver could have an outsized impact in health systems with limited specialist capacity.

For the global scientific community, including the many Indian and diaspora researchers working in neuroscience, Kasvu's work represents an important test of a promising idea: that the brain's natural ability to rewire itself can be harnessed to treat mental illness.

With €30 million in new funding and a clear plan to reach the clinic in 2027, Kasvu now has the resources to find out whether that idea can become a medicine.