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The move builds on an ongoing relationship between L’Oréal and Miu Miu sister brand Prada, which launched a skincare and makeup line last year.

L’Oréal and Miu Miu are teaming up on beauty, announcing an exclusive worldwide licensing agreement Friday.

The move builds on an ongoing relationship between L’Oréal and Miu Miu sister brand Prada, which launched a skincare and makeup line last year.

The first Miu Miu fragrances under the new L’Oréal license are expected to hit shelves in 2025. The company had previously worked with Coty on perfume.”

This new chapter will sustain the brand’s growth and help to further untap Miu Miu’s full potential in the category,” Miu Miu CEO Benedetta Petruzzo said in a statement.

On Friday LVMH named the 20 semi-finalists competing for this year’s LVMH Prize for Young Fashion Designers, which includes a year of mentorship by LVMH and €400,000 ($431,466) in prize money. Semi-finalists include New York-based womenswear designer Elena Velez; Everard Best and Tela D’Amore Best, the duo behind Who Decides War; Mexican designer Patricio Campillo’s Campillo (formerly known as The Pack); Swedish designer Ellen Hodakova Larson, founder of upcycling-centric label Hodakova; and Derek Cheng and Alex Po, the designers behind Hong Kong-based Ponder.er.

The semi-finalists will present their collections in Paris on Feb. 29 and Mar. 1. From there, the LVMH Prize Committee of Experts will select the eight finalists. Past winners include Marine Serre, Grace Wales Bonner and Thebe Magugu.

This year, in addition to the LVMH Prize for Young Fashion Designers and runner-up Karl Lagerfeld Prize (which includes mentorship and a €200,000 prize), LVMH is introducing the Savoir-Faire Prize, for the young brand exhibiting craftsmanship and technical prowess. The winner will receive a €200,000 prize and access to a skills-based mentorship programme.

See the full list of semi-finalists below:

Agbobly By Jacques Agbobly, Togo, womenswear and menswear

Aubero By Julian Louie, United States, menswear

Campillo By Patricio Campillo, Mexico, menswear

Chiahung Su By Chia Hung Su, Taiwan, genderless collections

Duran Lantink By Duran Lantink, The Netherlands, womenswear, menswear and genderless collections

Elena Velez By Elena Velez, United States, womenswear

Fidan Novruzova By Fidan Novruzova, Moldova, womenswear

Hodakova By Ellen Hodakova Larsson, Sweden, womenswear

Jiyongkim By Jiyong Kim, South Korea, menswear

Karoline Vitto By Karoline Vitto, Brazil, womenswear

Khoki By Koki Abe, Japan, menswear

Marie Adam-Leenaerdt By Marie Adam-Leenaerdt, Belgium, womenswear

Niccolò Pasqualetti By Niccolò Pasqualetti, Italy, genderless collections

Paolo Carzana By Paolo Carzana, United Kingdom, womenswear and menswear

Pauline Dujancourt By Pauline Dujancourt, France, womenswear

Ponder.Er By Derek Cheng And Alex Po, China, genderless collections

Standing Ground By Michael Stewart, Ireland, womenswear

Vautrait By Yonathan Carmel, Israel, womenswear

Who Decides War By Everard Best And Tela D’amore Best, United States, womenswear and menswear

Ya Yi By Yayi Chen Zhou, Spain, womenswear

European Union countries on Friday postponed a decision on a proposed law requiring large companies to determine if their supply chains use forced labour or cause environmental damage after Germany and Italy indicated they would abstain.

A “qualified majority” of 15 EU countries representing 65 percent of the EU population is needed for the corporate sustainability due diligence directive to proceed to a final vote in the European Parliament, where lawmakers are expected to support it.

On Friday, one diplomat said it was clear there were not enough envoys from the 27 EU countries to back the law, with Germany set to abstain. A decisive move was Italy’s last minute decision to say it would abstain, according to an Italian source.

“Germany is obviously anything but alone with its concerns,” Germany’s finance minister and leader of the Free Democrats Christian Lindner said on his X social media account.

Once the engine of EU integration along with France, Germany is increasingly becoming the brake, with a divided coalition.

Germany’s pro-business FDP opposed the law, arguing it would burden business with excessive bureaucracy. They also brought late objections to an EU law to end sales of CO2-emitting cars by 2035 and on EU plans to reduce truck emissions.

Their coalition partners, the Social Democrats and the Greens, backed the law and warned that Germany would lose credibility in the EU with their last minute opposition.

Campaign groups expressed outrage at the postponement.

Steve Trent, CEO and founder of the Environmental Justice Foundation, said some governments were irresponsibly blocking a move to meaningful corporate responsibility.

“Protections for consumers, human rights and a sustainable planet for future generations are at stake,” he said.

The Belgian EU presidency said the item had been removed from the agenda of Friday’s meeting of envoys from the EU’s 27 countries and would be rescheduled, with an EU diplomat saying it was set to be moved to Feb. 14.

Under the CSDDD, due to enter force in 2027, large companies in the EU will have to identify and take remedial action if they find their supply chains employing forced or child labour or damaging the environment, such as deforestation.

The rules will apply to EU companies that have more than 500 employees and a net worldwide turnover above €150 million ($161.5 million) and for non-EU firms whose EU turnover is more than that amount, albeit with a three-year lag.

Fines for breaching the rules could be as much as 5 percent of a company’s global turnover.

Critics have said it piles further reporting requirements on EU companies which must already comply with a separate set of environment, social and governance (ESG) disclosures coming into force from this year.

The law has also raised corporate hackles elsewhere, such as the United States, because it encompasses about 4,000 companies that do business in the bloc but are headquartered elsewhere.

The designer brand is drawing interest from would-be buyers and testing the market.

Oscar de la Renta — one of America’s most iconic designer labels that has dressed numerous first ladies, celebrities, socialites and been there when many brides have said “I do” — is now considering making its own connection.

Three sources said the company is working with the European investment bank Rothschild & Co., fielding interest from would-be buyers and generally testing the buyout market.

It is not clear that any deal will materialize out of the process.

The New York-based company is controlled by the family of the famed designer, who died in 2014 after a long battle with cancer. Gary Fuhrman’s GF Capital Management & Advisors is also an investor, taking what is believed to be a roughly 20 percent stake in 2010.

WWD could not immediately reach the brand or Fuhrman on Friday, while Rothschild declined comment.

Oscar de la Renta has long been a fixture on the New York scene and enjoys plenty of high-profile fans, including Taylor Swift, who wore a strapless, light blue floral look to the premiere of her “Eras Tour” film.

But the brand is up against mega players, like Dior and Chanel, which have outrageously deep pockets that they can use to make their impression on well-heeled consumers.

De la Renta is working with less financial backing than those brands, but lately has been able to make the best of it.

Like many others, the company had to cut its cost structure during the pandemic while sales dropped off sharply. But as COVID-19 receded and sales rebounded — revenues are said to have topped $120 million last year — the cost structure has remained lean.

That can be seen in de la Renta’s absence from the calendar for New York Fashion Week, where brands are spending big to be heard above the din. The brand has been designed by co-creative directors Laura Kim and Fernando Garcia since 2017.

The thriftier approach has helped the business operate profitably and put it in a position to test its options.

While there have been some mega-deals in fashion lately — Tapestry Inc. is expected to complete its acquisition of Capri Holdings this year and Kering recently took a 30 percent stake in Valentino — the deal market for smaller designer businesses has been spotty.

Some brands have come to market and found new investors, including Khaite, which saw Stripes buy in with some growth equity last March.

But there are plenty of other brands that have looked and not been able to make their own connections.

Disney, Fox and Warner’s venture to bundle live sports content—the latest hit to traditional cable packages—needs to cover high costs and keep leagues on board

Executives at the National Football League were in Las Vegas on Tuesday preparing for this weekend’s Super Bowl when they got word from news reports that their business—and the sports media industry writ large—was about to change in a fundamental way.

Disney’s DIS -1.94%decrease; red down pointing triangle ESPN and Fox FOXA 3.44%increase; green up pointing triangle, two of the league’s biggest media partners, announced that alongside Warner Bros. Discovery WBD -1.93%decrease; red down pointing triangle they would create a new streaming service to offer all their live-sports programming. The NFL, a titan that’s used to having a seat at the table in any discussion affecting its future and content, was out of the loop. Executives including Commissioner Roger Goodell and media chief Brian Rolapp were caught off guard by the news.

That the media behemoths were willing to risk the ire of the NFL shows the sense of urgency—even desperation—they feel about solving what is arguably the biggest riddle in their industry: finding a business model that can work in the streaming economy.

To do that, they made a profound shift without consulting powerful partners like the NFL, revealing it days before the biggest sporting and television event of the year. They’re taking the chance that, by joining forces with big rivals, they won’t draw antitrust scrutiny. And they’re doing it with a product that consumers might not even want—in part because the new service won’t deliver anything close to the entire landscape of sports programming.

Sports have been the linchpin of the hugely profitable cable-TV industry for decades. But as consumers cut the cord in droves, pushing that business to the brink, making the transition to streaming has been rocky.

It’s been hard enough to port entertainment programming to streaming, with services such as Disney+, Peacock and Paramount+ struggling to show investors profits. But sports are even trickier, because of the staggeringly high costs for the content.

Media companies collectively pay billions of dollars annually to the NFL and NBA alone. Cable makes the math work because of its inherent subsidy—even households who don’t watch channels like ESPN pay for them on their monthly bill, meaning the high rights costs are spread among higher numbers of subscribers.

What ESPN, Fox and Warner settled on was to create a slimmed-down version of a cable bundle in streaming form that is focused on sports. The as-yet-unnamed service, expected to launch this fall, will carry 14 networks, including Disney’s ESPN channels and its ABC network, Warner’s TNT and TBS, and Fox’s broadcast network and sports cable channel. The service will feature sports including the NFL, NBA, Major League Baseball, college football and basketball, golf and Nascar.

By packaging together all the content, the companies are hoping they can bring in enough sports-first customers to make the economics work. Wells Fargo analyst Steven Cahall projected, based on various assumptions, that the service could break even if around six million subscribers paid at least $40 a month.

The companies are discussing a price that could approach $50 a month, people familiar with the situation said.

For many years, media companies resisted offering such a sports-specific package, fearing it could cannibalize the old-school cable bundle, which they wanted to preserve as long as they possibly could. Now, the cable industry is reaching a tipping point: Only 73 million households subscribe to pay-TV, either through traditional distributors such as Comcast or internet versions of cable like YouTube TV, down from about 100 million a decade ago, according to MoffettNathanson. The rate of decline has picked up pace since streaming really started to take off in 2019, when multiple services beyond Netflix became popular.

With the streaming venture, Disney, Warner and Fox have decided to leap into a new business even if it accelerates cable’s collapse—with the real risk that what they are building won’t be anywhere near as lucrative. As one rival executive put it, they are tearing down the house to put a shed in the backyard.

“We’re doing what should have happened slowly over 20 years all at once now,” said Patrick Crakes, a sports media consultant and former senior executive at Fox Sports. He added, “This is not going to save anybody, but it’s a start.”

Missing games

Even with all the sports games the planned service will offer, it still won’t be a complete, all-in-one sports platform, partly because Comcast’s NBC and Paramount’s CBS aren’t part of the partnership. NFL fans would still need CBS to watch Sunday afternoon football, NBC’s Peacock for Sunday night football and Amazon Prime Video to watch Thursday games.

Ian Schrader, a 48-year-old automotive technician from Pendleton, Ky., said he is paying for YouTube TV, which streams a package of more than 100 cable channels, exclusively because of sports. When he first signed up years ago, it was $40 a month. Now it’s $73.

“As long as it’s less than what YouTube TV is, I’m probably going to be on board,” he said of the planned sports-streaming service.

Dave Focareta, a 45-year-old freelance writer from Santa Monica, Calif., said the planned service doesn’t include the sports content he likes. An avid soccer fan, he pays for Peacock to watch the English Premier League and Paramount+ for the Champions League.

“In theory, I like the idea of a streaming service that bundles live sports,” he said. “But what’s being proposed isn’t going to meet my needs.”

Sports fans who also like all the other channels in their cable packages might not be interested. And customers could resist adding another expensive streaming service to the ever-expanding assortment such as Netflix, Apple TV+ and Max.

Failing to bring the NFL, NBA and other leagues in on their plans was a risk for the media companies. The leagues have plenty of options when licensing their rights, and in the past few years tech companies such as Amazon and Apple have emerged as customers. On Friday, The Wall Street Journal reported Amazon will stream its first NFL playoff game next season.

Tech companies are also eyeing an NBA rights deal if they get the opportunity. Warner and ESPN are the league’s biggest media partners and are now in negotiations to renew their deals, with an exclusive window that expires this spring.

If the sports service does gain traction, it will deal another major blow to the cable bundle by driving more consumers to cancel their subscriptions, said Steven Bornstein, a former chairman of ESPN and a former executive with the NFL. “It just further decays the bundle, which is the lifeblood of these companies,” he said. “I would be concerned if I was sitting at Disney and Fox and Warner Bros. about being part of something like this.”

The companies said the venture would bring in what it called “cord nevers,” younger people who had never subscribed to traditional cable.

But it could very well have broader appeal, and traditional cable companies such as Charter will likely start demanding flexibility to create slimmed-down sports-centric packages of their own. Traditionally, deals with media companies have required the cable companies to package the attractive sports properties with smaller-audience entertainment channels.

The biggest losers in cable’s collapse will likely be the owners of local TV stations and smaller entertainment networks, from A&E to AMC to Comedy Central and Syfy, that are the most dependent on cable TV. Shares of Scripps, owner of 61 local stations, are down 24% since the sports venture was announced.

“In a way, these guys just ran into the castle and pulled up the drawbridge,” said Doug Shapiro, a former head of strategy at Turner, a division of Warner, who is now a consultant to media companies. “And you are either inside or outside the moat.”

Frenetic experimentation

The new sports venture grew out of a frenetic, almost chaotic period of experimentation in the industry over the past year. Media companies have explored all sorts of potential business models for streaming and sports, some that involve going it alone and some that would require teaming up with others, through pricing bundles, joint ventures or all-out mergers.

Fox Corp. Chief Executive Lachlan Murdoch had been having separate discussions with both Warner Bros. Discovery and Disney last year about creating a sports streaming service, people familiar with the discussions said. Fox has an ad-supported streaming service for entertainment, Tubi, and a Fox Nation streaming service for news and lifestyle programming—meant as a complement to Fox News—but didn’t have a major subscription streaming option for its huge array of sports content.

Murdoch was inspired largely by Kayo Sports, a similar platform in Australia that Journal parent News Corp owns, which counts ESPN as a programming partner. Murdoch is chair of News Corp and executive chair and CEO of Fox Corp.

Warner Discovery Chief Executive David Zaslav, who has long advocated bundling streaming services, was eager to do something with Fox. Warner in September announced that its live sports content, including NBA and MLB games, would be available on its Max streaming platform for an additional $9.99 a month. But the company wanted a way to reach even more sports fans in the streaming world.

At the same time, ESPN Chairman Jimmy Pitaro was also thinking about the idea of partnering with another media company. Bob Iger, chief executive of ESPN parent Disney, had broached the topic of a sports partnership with Murdoch as well. Iger has been battling activist investor Nelson Peltz, and finding a future strategy for ESPN is a major imperative in his quest to keep investors on his side.

ESPN had been working on a plan to offer its flagship TV channel in a stand-alone streaming app, while considering a number of other paths, including strategic partnerships with the NFL and NBA, as well as teaming up with rival media outfits. The stand-alone ESPN app is still moving forward, with a target date of fall 2025.

“The current bundles and packages haven’t necessarily met all the customer wants and needs,” said Marc DeBevoise, chief executive of the video technology company Brightcove and a former Paramount executive, resulting in the wide experimentation.

The talks for the new venture quickly moved forward, the people familiar with the discussions said. A hunt is now on for a chief executive.

The platform will license the channels from its parent companies, and each owner will keep the ad revenue from their respective networks.

A number of private-equity firms, including TPG, have expressed interest in possibly investing in the new company, according to people familiar with the situation. It’s unclear if Disney, Fox and Warner will want financial partners.

Disney, Warner and Fox will each own one-third of the venture, which will have an independent management team, the companies said.

The structure could pose challenges. Fox, NBC and Disney owned the streaming service Hulu together but often disagreed on strategy—it was at times referred to as “Clown Co,” partly because of the struggles to formulate a unified approach.

Disney bought out Fox’s share in Hulu in 2019, as part of its acquisition of much of Fox’s entertainment assets, and is now buying out NBC parent Comcast to take full control of Hulu.

Competition question

The collaboration by three giants to pool a huge amount of sports programming—Citi analysts peg it at 55% of U.S. sports rights—could draw antitrust scrutiny. Smaller rivals have already raised alarms.

Disney, Fox and Warner have said they will negotiate independently for sports rights, mindful that teaming up would be a red flag to federal antitrust regulators.

The government is going to look at this arrangement and ask how it benefits sports viewers, and how content suppliers—in this case the sports leagues—are reacting, said William Kovacic, a former chair and general counsel at the Federal Trade Commission, who is now a law professor at George Washington University’s law school.

It could be challenging for the media companies to prove that they are truly operating independently, Kovacic said. “How do you assure that you get collaborators who have a common interest to schizophrenically step aside and go after each other’s throats” and compete on bids for content rights, he said.

The pact’s focus on sports, one of the most popular types of programming among consumers, makes it even more likely that enforcers will at least examine the deal, said Michael Katz, an economist at the University of California Berkeley. The Justice Department might look at the potential impact on prices for sports programming and whether Disney and its partners would have an incentive to withhold that content from cable companies or rival streaming services, he said. “The focus here might be on the consumer of video programming and the harm to distribution,” he said.

Fubo, a nine-year-old sports-centric streaming service with more than 200 channels and 1.5 million subscribers in North America, saw its company’s stock drop more than 20% on the news of the joint venture. “Every consumer in America should be concerned about the intent behind this joint venture and its impact on fair market competition,” Fubo said.

Cable operators, for their part, have been trying to offer such sports “skinny bundles” for years but were blocked by the very media companies doing this now, said Grant Spellmeyer, president and CEO of ACA Connects, which represents more than 500 smaller rural broadband and cable providers.

“Allowing the biggest media players to join forces—while locking out traditional linear cable providers from offering the same package at the same price—only gives even more power and leverage to the Goliaths to extract more money from customers,” Spellmeyer said.

The companies are searching for a name for the venture. Jon Miller, a senior adviser at venture-capital firm Advancit Capital who once oversaw Fox’s digital strategy, including its investment in Hulu, offered up his take: “I’m trademarking Spulu—as in Hulu for sports.”

BP to book $700mn windfall due to pension tax changes

Oil major says balance sheet will benefit from upcoming reduction to pension surplus tax charge

BP is set to book a $700mn windfall due to tax changes aimed at boosting corporate pension fund investment in the economy.

Last year, chancellor Jeremy Hunt announced plans to relax the tax charge on surplus funds extracted by employers from company pension plans, with the changes to come into effect in April.

In its annual results, this week BP, which has amassed a $7.9bn surplus in its giant pension plans, noted the change was expected to help its tax liabilities by about $700mn.

“In November 2023, the UK government announced a reduction in the authorised surplus payments charge applicable to defined benefit pension schemes from 35 per cent to 25 per cent,” the oil major said. “The legislation has not yet been enacted or substantively enacted, but is expected to be effective from 6 April 2024.”

“The change is expected to reduce deferred tax liabilities by around $0.7 billion with the related gain recognised in other comprehensive income when the legislation is substantively enacted.”

Heather Self, consultant at Blick Rothenberg, a tax advisory firm, described the development as “a windfall [for BP], but only inasmuch as it is a reduction in a tax rate” as the booking of the $700mn gain was “an accounting requirement”.

BP is expected to provide more detail about the treatment of the tax liability change in its next annual report due to be published in March. The group said it did not currently intend to extract surplus from its pension.

The pension tax change is expected to be closely watched by other corporate sponsors of “defined benefit” plans against the backdrop of much-improved funding positions.

Thousands of company pension plans in the UK have amassed surpluses over the past 18 months, thanks to interest rate rises driving down the cost of pension promises.

Meanwhile, pension experts said the tax changes, and broader efforts by the UK government to incentivise pension investment in areas that can help the economy, were having an impact in the boardroom, with some now looking to extract pension surplus.

The government believes that well-funded pension plans could potentially generate more surplus, for use by employers and to benefit members, by investing in return-seeking assets that also help the UK economy.

“There’s a recognition of the potential upside value from future [pension] surplus for both members and employers,” said Stewart Hastie, partner at Isio, a pension consultancy.

“Companies are exploring avenues such as merging group schemes to maximise the benefits of surplus funds and schemes are establishing frameworks outlining agreed terms for distributing future surplus above a certain threshold.”

Ski industry navigates new terrain to fend off threat of climate change

Mountain resorts are diversifying as the top US and Europe trails become unusable even in peak season

At a small ski repair shop on the banks of Lake Tahoe in northern California, staff were turning away customers anxious to patch up their blades for the winter season.

“I could take your money and work on them,” said an employee at Tahoe Dave’s, turning a pair of dented skis over at the end of last year. “But what’s the point because you’re just going to hit a bunch of rocks tomorrow. I’d bring them back when there’s snow.”

Across the US and Europe, climate change is forcing the ski industry to adapt. As global temperatures hit new records, lower snowfall and melting snowpack are forcing the multibillion-dollar industry to rethink how they can keep consumers paying for expensive lift tickets, equipment and hospitality.

While a recent flurry of snowfall has allowed many of Tahoe’s trails to reopen, closures are becoming more frequent during the peak of the western US season — which runs from late November to early April. Many open trails are strewn with small rocks and ice, making them navigable for only the most skilled skiers. 

In the US, the leading operators are expanding into ever-higher terrain and across different regions and ranges — and diversifying away from skiing. Vail Resorts and Alterra, the two US ski companies with the biggest number of resorts, now own large portfolios of hotels and are advertising their mountain playgrounds as places where people can enjoy outdoor activities all year round.

“These resorts aren’t just these little towns that nobody goes to in the off-season — mountain biking is huge now,” said Darcie Renn, Alterra’s vice-president of sustainability. “We’re doing more to extend the season — people can go hiking, climb ropes, do family adventure camps.”

Alterra is still “very much in the ski business, but it is becoming the mountain resort business”, she added.

Unlike in the US, where big companies run entire resorts, in Europe cable car operators typically oversee the lifts and ski slopes, while restaurants and accommodation are often owned by separate businesses.  

But across the Alps and Italy’s Apennines, businesses also facing lower snowfall are taking the same approach by adding summer activities such as hiking and mountain biking, as well as building children’s play areas that make use of the mountainous landscapes.

Lift operators at leading Italian resorts such as Monte Cimone have spent big on snow-making facilities, churning out the “gun powder” that can save a day of skiing. About 90 per cent of Italy’s slopes rely on artificial snow, compared with 54 per cent in Switzerland and 40 per cent in France, according to the Cableways Association of Switzerland.

Despite these efforts, Apennine resorts are still feeling the pressure. “They are not having a wonderful season, but it is not as bad as it was last year,” Valeria Ghezzi, president at Anef, the association of Italian ski lift operators.

US resorts, even in high-altitude ski areas, are also boosting their snow-making capacity.

Jackson Hole Mountain Resort, close to the annual retreat for monetary policymakers in Teton County, Wyoming, has invested “heavily” in snow-making over the past decade. The resort can now supply snow to around a third of its trails.

Yet JHMR was forced to call off its annual extreme ski and snowboarding competition — usually held in a steep, narrow chute at the top of the mountain called Corbet’s Couloir — last month. The trail did not have the depth of snow needed to run the event, staff said.

“It’s been a tough year for the majority of the ski industry,” said Andrew Way, JHMR spokesperson. 

Despite the weather challenges, a record 65.4mn visits to US slopes by skiers or snowboarders were recorded for 2022-23, according to the National Ski Areas Association, up 6.6 per cent from the previous season.

Vail and Alterra both offer an upfront season pass that allows access to all the companies’ ski runs for discount rates, providing the businesses with reliable revenue and a steady stream of visitors even when low snowfall prevents skiing on some routes.

With 2.4mn guests “pre-committed” to its 41 resorts across the US, Europe and Australia this season, a Vail spokesperson said its pre-season pass was a bid to “change the dynamic” of being “ruled by the weather”.

Alterra’s Renn added: “We can lean in on this pre-season revenue. It gives us a little bit more good feeling that someone will be at some of our resorts somewhere.” 

Vail is expanding its portfolio in Europe. In November, the company bought the operator of the Crans-Montana resort in the Swiss Alps, following an acquisition of another Swiss resort in 2022. 

But Europe is unlikely to provide the US companies with a safe haven from climate change. Average temperatures in Alpine regions have risen almost 2C from pre-industrial levels, the Research Center for Alpine Ecosystems estimated, well above the long-term global figure of at least 1.1C.

Some US ski companies admit that rising temperatures will eventually render even the most aggressive snow-making operations obsolete.

At Aspen Snowmass in Colorado, the resort’s executives lobby aggressively for pro-climate legislation. Two years ago, the company installed a sculpture of a cable car at the top of one of its lifts, and it leaves copies of its call to climate action in every hotel room, said Auden Schendler, senior vice-president of sustainability.

Calling for sweeping measures such as a carbon tax regime in the US, he said the ski industry had been fixated on their own emissions and “misunderstanding climate change as something that can be fixed by changing the lightbulbs”.

Investors pile into psychedelic drug start-ups tackling mental health

Sovereign wealth funds Temasek and Mubadala in talks to fund biotech groups harnessing mind-altering substances

Biotechnology start-ups seeking to use psychedelic drugs to treat mental health disorders are raising hundreds of millions of dollars, as investors are tempted back to the sector by watershed clinical data and regulatory approvals expected this year.

Groups seeking to harness mind-altering substances including MDMA, psilocybin mushrooms and 5-MeO-DMT, a hallucinogen found in desert toad secretions, raised at least $163mn across five deals in January, according to PitchBook and company data.

It is the second-highest month of fundraising ever recorded, after March 2021. Multiple people who work in the sector said they expected more backing for psychedelics groups, as promising scientific data and positive signals from regulators attract high-profile investors.

Singapore’s $300bn investment fund Temasek and the venture capital arm of one of Abu Dhabi’s largest sovereign investors, Mubadala, have held talks with biotechs to fund development of psychedelic mental health treatments and clinics, according to three people familiar with discussions.

The funds both have a history of investing in biotechs but are bankrolled by countries that have some of the world’s most restrictive laws on drug possession; Singapore has executed at least 15 people for drug-related offences in the past two years.

Temasek declined to comment. Mubadala said it was “continuously evaluating all possible clinical and therapeutic prospects to address significant unmet needs”.

Once considered a relic of the 1960s counterculture, psychedelic drugs have experienced a renaissance both in society and healthcare research in the past two decades, such as the rise of “microdosing” by Silicon Valley tech executives.

While many of the early studies into the effect of psychoactive substances on mental health were funded by philanthropy, billionaire evangelists for the drugs like tech entrepreneur Peter Thiel, German financier Christian Angermayer and crypto investor Mike Novogratz became pioneers in funding over the past decade by deploying their personal wealth as institutional investors remained wary.

“Psychedelics have already arrived in society as an accepted fact,” said Angermayer, who started investing in psychedelics when he became convinced of their efficacy after using them around a decade ago, despite a lifetime abstaining from drugs and alcohol. “I always try to ask myself: ‘is it just my circle’, but . . . the demand is so high and the current treatments are so bad.”

The investor interest in businesses developing psychedelics comes as the broader biotech sector enjoys a revival. A Nasdaq index of small cap biotech stocks has rallied by more than 40 per cent in the past three months as investors bet on an end to interest rate rises.

Even so, the drugs have remained in a legal grey area in many countries, with concerns about a rise in illicit recreational use following the uptick in their clinical acceptance. Most common psychedelics remain controlled substances in the US, although this does not prevent state-by-state decriminalisation and is not considered a barrier to FDA approval.

By this summer, London-based Compass Pathways, a Nasdaq-listed group backed by Thiel and Atai Life Sciences, a biotech group that Angermayer founded, is expected to publish data from a “phase 3” trial of 800 human subjects who have taken synthetic psilocybin to treat treatment-resistant depression.

These will be the first results from a study designed around landmark US Food and Drug Administration guidelines for researching psychedelics that were outlined last year, a decision that encouraged investors that formal approval of the drugs would soon follow.

“Much of the stigma in investing circles has started to dissipate,” said Kabir Nath, Compass chief executive, who said the FDA’s move to issue guidance had “made it a lot more straightforward” for investors.

Lykos Therapeutics, a corporate offshoot of the non-profit Multidisciplinary Association for Psychedelic Studies, is also awaiting a decision from the FDA on its MDMA-assisted therapy for post-traumatic stress disorder expected by the third quarter of 2024.

The decision could lead to the schedule-1 controlled substance being reclassified for use as a mental health treatment, the first time such a reclassification will have taken place.

According to three people close to the company, a funding round worth more than $100mn last month from a group of 10 investors including the charitable foundation run by hedge fund billionaire Steven Cohen and his wife Alexandra, was oversubscribed. As a result, Lykos is considering raising more money by the end of this year.

“There’s a lot of biotech investors and big pharmaceutical companies sitting on the sidelines . . . they want to see what the commercial rollout looks like,” said Tim Schlidt, co-founder of Palo Santo, a Chicago-based venture capital fund that invests exclusively in psychedelics healthcare. “There’s going to be a lot of change based on whether [Lykos] comes through and gets approval.”

Spravato, a nasal spray based on a molecule from the psychedelic drug ketamine used to treat depression, already ranks as Johnson & Johnson’s fastest-growing product. Analysts project it will achieve more than $1bn in sales this year, and become a so-called “blockbuster” drug.

That clinical distribution of Spravato has laid the groundwork for future drugs. “The emerging commercial infrastructure is giving investors great comfort,” said Greg Mayes, chief executive of Reunion Neuroscience, a Canadian group developing psilocybin treatment for post-partum depression in women. “Data, regulatory and commercial [progress are] all converging in an area where there is a giant unmet medical need.”

More than 50 psychedelic companies have gone public in the US and currently have a combined valuation of more than $2bn, which is predicted by analysts to reach $12bn by 2030.

In July, the American Medical Association released the first CPT codes — reimbursement codes used for healthcare billing — for psychedelic therapies, which created a pathway for the drugs to be integrated into the US healthcare system.

“We have demonstrated . . . that it’s possible to take the psychedelic experience and work within highly regulated protocols and still get great results,” said Rick Doblin, a psychedelic drug advocate who founded the non-profit Maps in 1986. “The world’s on fire and psychedelics are going to become more essential as a medicine.”

The results of early leading studies into psychedelics made public have been groundbreaking. The first clinical trials by Lykos showed that over 70 per cent of its MDMA-assisted therapy study participants were cured of PTSD after 18 weeks, while Compass Pathways found that it could get a quarter of patients with treatment-resistant depression into remission in 12 weeks, according to data released last year.

The early data helped Compass raise $285mn in a private placement of its shares last August from mainstream biotech funds including $10bn fund RA Capital and Surveyor Capital, an equities business owned by Ken Griffin’s Citadel.

That Compass funding round was “good for the sector overall”, said Doug Drysdale, chief executive of Cybin, a Nasdaq-listed company backed by asset manager Janus Henderson and Cohen’s Point72 hedge fund, as it showed that fundamental pharmaceutical investors were doubling down on the space.

“You don’t have to be a tie-dye wearing investor to think of the psychedelic space as interesting,” said Protik Basu, managing partner of Helena Special Investments, which led the latest investment round in Lykos.

“Investors like investing in inevitabilities: you can’t argue with the absolute crisis of mental health around the world; you cannot argue with the fact that antidepressants and the current suite of tools generally suck.”