The resurgence of interest in psychedelic drugs as potential treatments for mental health disorders has led to a wave of biotech companies developing next-generation psychedelics. These firms are attracting significant venture funding and collaboration deals, with the market for therapeutic psychedelics estimated to reach $6.7 billion by 2030, according to a report by Roots Analysis.
Companies like Seaport Therapeutics, which launched in April with $100 million in venture funding, are fine-tuning classical psychedelics such as psilocybin, DMT, and LSD to address limitations that hinder their use as therapeutic drugs. These challenges include lengthy psychedelic experiences that require close patient supervision, potential cardiac risks associated with certain compounds, and difficulties in conducting placebo-controlled clinical trials.
To overcome these hurdles, some companies are tweaking psychedelic molecules to induce shorter or milder "trips," reducing the need for intensive patient oversight. Cybin, a Toronto-based biopharmaceutical company, has developed CYB003, a psilocybin analog that does not require metabolic activation and produces a more manageable 4-6 hour psychedelic experience. The company has completed a phase 2 trial of CYB003 for major depressive disorder, showing strong and durable antidepressant effects compared to SSRIs.
Other firms, like Seaport Therapeutics and Delix Therapeutics, are working on "neuroplastogen" compounds that aim to eliminate the psychedelic effects altogether while retaining therapeutic efficacy. Delix's DLX-001, a non-hallucinogenic molecule related to MDMA and DMT, has shown promise in stimulating the regrowth of damaged dendritic spines in rodents and is set to enter a phase 2 trial for major depression in 2025.
Gilgamesh Pharmaceuticals, which recently announced a collaboration with AbbVie worth up to $1.95 billion, is developing non-hallucinogenic analogs of ketamine, DMT, and psilocybin. The company's ketamine analog, GM-1020, has completed a phase 1 trial and is now being tested in a phase 2 trial for major depressive disorder. Gilgamesh is also using machine learning algorithms and Neuropixels probes to accurately quantify psychedelic effects in animal models.
The growing interest in next-generation psychedelics is partly driven by the huge unmet need in mental health treatment. With an estimated 280 million people worldwide suffering from depression and limited efficacy of current antidepressants, investors see potential in novel approaches. The success of Johnson & Johnson's Spravato, esketamine, which won FDA approval for treating depression in 2019 and generated $689 million in sales last year, has further buoyed investor confidence.
As clinical trials progress, the crucial question of whether psychedelic drugs can deliver therapeutic benefits without the "trip" may soon be answered. Positive results could mark a major advance in neuropharmacology, offering new hope for patients with mental health disorders. Regulators have also become more receptive to supporting clinical trials involving psychedelic drugs, recognizing the potential of these therapies to address the growing mental health crisis.
