The top psychedelic drug developers leading the market

psychedelics psychiatric depression

Psychedelic drugs have the potential to become an effective treatment for crippling mental health conditions such as depression. Here are five of the top drug developers leading their particular niches in the emerging field of psychedelic medicines.

For decades, research into the therapeutic properties of psychedelic drugs was almost snuffed out as recreational use of the substances was banned in the U.S. and Europe. In recent years, however, an emerging industry is now coalescing around the potential of hallucinogenic compounds such as lysergic acid diethylamide (LSD), psilocybin and 3,4-methyl​enedioxy​methamphetamine (MDMA) to treat mental health conditions such as depression and post-traumatic stress disorder (PTSD). The global market is expected to grow from around $5 billion in 2020 to more than $10 billion by 2027.

While there are already a number of approved approaches to treating depression, many only last a short time, cause side effects, and can’t help all patients. Psychedelic drugs are increasingly seen as a potential long-lasting alternative for patients that are left behind by existing approaches. 

One of the first psychedelic drugs to be approved in the U.S. for treating a mental health indication was a nasal spray form of the drug ketamine in 2019. Branded as Spravato and marketed by Janssen, the drug was greenlit for treatment-resistant depression. However, the drug also carries risks of adverse effects including high blood pressure, sedation and the potential of drug abuse.

The hunt is now on for psychedelic compounds that are capable of treating mental health disorders long-term with fewer side effects than current treatments. With the help of experts in the field, we’ve drawn up a list of five of the top psychedelics developers pushing the boundaries of this exciting field.

Table of contents

    Atai Life Sciences NV

    Founded: 2018

    Headquarters: Berlin, Germany

    Market cap: $522 million

    Atai Life Sciences was set up in response to what the founders saw as a lack of innovation in the mental health treatment landscape, along with growing opportunities surrounding the development of psychedelic medicines and digital health technology. 

    The firm operates with many smaller companies under its umbrella. For example, Atai fully owns the psychedelics developers EmpathBio, Revixia and Viridia. The German firm also has stakes in other players including Compass Pathways, Recognify Life Sciences and Perception Neuroscience. By working as a wide decentralized network of companies, Atai aims to streamline internal processes like HR and accounting to allow the founders to spend more time on advancing their research.

    The most advanced program in Atai’s pipeline is a form of ketamine that may cause fewer adverse side effects than approved forms of ketamine, and is less prone to abuse by patients. Developed by the firm Perception Neuroscience, the drug is currently in a phase 2a trial to treat treatment-resistant depression.

    To finance its drug development and business operations, Atai Life Sciences raised around $362 million in venture capital funding between 2020 and 2021. In June 2021, the firm took the plunge with an IPO on the Nasdaq stock market and bagged an impressive $259 million in proceeds.

    shutterstock depression mental health
    Source: Shutterstock

    Compass Pathways PLC

    Founded: 2016

    Headquarters: London, U.K.

    Market cap: $422 million

    Compass Pathways is developing a synthetic form of psilocybin, the main psychedelic compound in magic mushrooms. It’s been suggested that this hallucinogenic drug can rewire the brain to treat depression long-term after just one or two doses. In Compass Pathways’ lead program, the drug is given during supervised therapy sessions, where patients are provided a pill containing psilocybin, an eye mask to help them focus and a specially designed music playlist.

    According to a recent phase 2b trial, Compass Pathways’ lead psilocybin treatment significantly reduced depressive symptoms by three weeks after a single dose. Patients given the highest dose also had benefits lasting for up to 12 weeks.

    Compass Pathways is following up the trial results in a phase 3 trial planned to launch this year. The company is also testing the drug in other mental health conditions including PTSD, and supporting investigator-initiated studies in conditions including bipolar disorder, anorexia and major depressive disorder.

    To fund its drug development activities, Compass Pathways raised $80 million in a Series B round in 2020, and followed up just months later with a $146.6 million IPO on the Nasdaq stock market.

    GH Research PLC

    Founded: 2018

    Headquarters: Dublin, Ireland

    Market cap: $549 million

    GH Research is researching the antidepressant potential of the drug 5-methoxy-N,N-dimethyltryptamine, or 5-MeO-DMT. This molecule occurs naturally in several species of plants and even a species of toad.

    In GH Research’s lead program, 5-MeO-DMT is being tested as an inhaled treatment for treatment-resistant depression. According to results from a phase 1/2 clinical trial, seven out of eight patients given the treatment went into remission seven days after receiving the treatment. The company is now planning a phase 2b trial of the drug, and later this year GH Research expects to submit applications to several European countries to run the trial.

    Additionally, the company is planning a phase 2a trial for the same drug in patients with bipolar II disorder and a current depressive episode. In preclinical programs, GH Research is also developing ways to deliver 5-MeO-DMT via an injectable and intranasal approach, which could benefit certain subpopulations of patients.

    GH Research jumped on the psychedelics funding trend in April 2021 when it raised a Series B round of $125 million. In June 2021, the firm went public on the Nasdaq, bagging ​​$160 million in an IPO to fund its clinical development activities.

    Multidisciplinary Association for Psychedelic Studies

    Founded: 1986

    Headquarters: California, U.S.

    The Multidisciplinary Association for Psychedelic Studies (MAPS) is a non-profit organization that has the most advanced clinical program for any psychedelic compound. MAPS is running a phase 3 program testing the benefits of the drug MDMA, also known as ecstasy, in people suffering from PTSD.

    Though MDMA often makes headlines as a recreational drug, the molecule combined with intensive therapy also has the potential to regulate emotional responses that can overwhelm patients with PTSD, allowing them to cope with traumatic memories. MDMA treatment combined with therapy outperformed the placebo at treating severe PTSD in a phase 3 trial run by MAPS last year. Results from a second phase 3 trial are expected by October 2022.

    MAPS is also testing the benefits of MDMA therapy in several other mental health indications including eating disorders and social anxiety in autistic adults.

    An honorable mention also goes to the Canadian firm Awakn Life Sciences. With an MDMA therapy in phase 2a testing for the treatment of alcohol addiction, Awakn has one of the most advanced MDMA programs amongst the for-profit players.

    shutterstock psilocybin mushroom
    Source: Shutterstock

    MindMed Inc

    Founded: 2019

    Headquarters: New York, U.S. and Toronto, Canada

    Market cap: $300 million

    MindMed was co-founded by the entrepreneur J.R. Rahn, who suffered from mental health problems and was interested in the Silicon Valley trend of improving focus by microdosing on psychedelic drugs.

    The firm is testing the benefits of the hallucinogenic drug LSD with professional supervision to treat a range of mental health conditions including generalized anxiety disorder and attention deficit hyperactivity disorder (ADHD). Like psilocybin and DMT, LSD is believed to rewire the brain and provide long-lasting mental health benefits to patients.

    According to recent phase 2 results, LSD met the goal of significantly improving anxiety symptoms. MindMed is soon launching a phase 2b trial of its lead candidate in generalized anxiety disorder, and is also running a phase 2a trial of the same drug in patients with ADHD.

    MindMed was one of the first psychedelics developers to go public, listing on the Canadian stock exchange NEO in 2020. MindMed then went public on the Nasdaq in April 2021. In the last three years, MindMed has raised roughly $190 million to fund its business and drug development activities.

    Cover image via Anastasiia Slynko.

    Thanks to feedback from MAPS, MindMed, Atai Life Sciences and Tryp Pharma

    22 June 2022: Updated to correct upcoming milestones for MAPS and the pipeline of Compass Pathways.

    Explore other topics: Psychiatric disorders

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