Psychedelics used for recreational, medicinal, or ritual purposes have been ubiquitous throughout human history. The Greek roots of the word «psychedelic» are psyche (mind or soul) and delos (to reveal). Unfortunately, during the Vietnam era, psychedelics fell into the «hippie» and counterculture movements and lost political support in the United States.
This ideological opposition may have led to funding restrictions outlined in the Controlled Substances Act (CSA) of 1970, which became a major regulatory obstacle to research on psychedelic compounds.
Since then, the field of psychedelic neurobiology and pharmacology has struggled to free itself from these repressed and criminalized cultural elements. Until the 1990s, their leaders often discouraged junior scientists and physicians from pursuing research on psychedelic compounds. Over the past three decades, however, a growing community of rigorous scientists and physicians has once again accelerated psychedelic research, as shown below.
This ideological opposition may have led to funding restrictions outlined in the Controlled Substances Act (CSA) of 1970, which became a major regulatory obstacle to research on psychedelic compounds.
Since then, the field of psychedelic neurobiology and pharmacology has struggled to free itself from these repressed and criminalized cultural elements. Until the 1990s, their leaders often discouraged junior scientists and physicians from pursuing research on psychedelic compounds. Over the past three decades, however, a growing community of rigorous scientists and physicians has once again accelerated psychedelic research, as shown below.
By the time the Multidisciplinary Association for Psychedelic Studies (MAPS) was formed in 1986, research into the therapeutic potential of psychedelics had resumed. Researchers have made significant progress both in identifying the targets of psychedelic compounds and in localizing neurons in the brain that express cell surface receptors associated with many classic hallucinogens.
In the 1990s and 2000s, the advent of fMRI and PET technologies allowed for a critical understanding of the effects of acute psychedelic experiences on brain activity. Over the past decade, researchers have studied drug receptors associated with psychedelics using techniques such as X-ray crystallography and cryo-EM, exposing them to modern in silico drug studies and ligand prediction. The timeline below shows several important developments in the research and regulation of psychedelic substances since the 1950s.
In 2018, some states began decriminalizing psychedelics after the FDA named psilocybin and MDMA as breakthrough treatments, and the Right to Try Act allowed doctors to prescribe psychedelics to terminally ill patients. Today, many public and private companies are trying to convince the FDA to approve various psychedelic drugs or psychedelic derivatives. The chart below shows the indications they are targeting most often.
Because there is only one clinical trial in Phase 3, psychedelic pharmaceuticals are in the early stages of clinical trials. The following chart shows the number of trials of psychedelic compounds in each phase as of the second quarter of 2022. Our conservative estimate is that their combined sales could reach $5.5 billion per year by 2030.
In the 1990s and 2000s, the advent of fMRI and PET technologies allowed for a critical understanding of the effects of acute psychedelic experiences on brain activity. Over the past decade, researchers have studied drug receptors associated with psychedelics using techniques such as X-ray crystallography and cryo-EM, exposing them to modern in silico drug studies and ligand prediction. The timeline below shows several important developments in the research and regulation of psychedelic substances since the 1950s.
In 2018, some states began decriminalizing psychedelics after the FDA named psilocybin and MDMA as breakthrough treatments, and the Right to Try Act allowed doctors to prescribe psychedelics to terminally ill patients. Today, many public and private companies are trying to convince the FDA to approve various psychedelic drugs or psychedelic derivatives. The chart below shows the indications they are targeting most often.
Because there is only one clinical trial in Phase 3, psychedelic pharmaceuticals are in the early stages of clinical trials. The following chart shows the number of trials of psychedelic compounds in each phase as of the second quarter of 2022. Our conservative estimate is that their combined sales could reach $5.5 billion per year by 2030.
In this article, we review psychedelic neurochemistry and explore current clinical work on psychedelics. We then assess the investment risks and opportunities associated with this pharmaceutical sub-sector. Our goal is to describe the type of innovations that we believe will play a critical role in unlocking the potential of these compounds to improve human health.
Neuropsychedelic chemistry
The neurotransmitter 5-hydroxytryptamine (5-HT), better known as serotonin, has a wide range of molecular functions in invertebrates, vertebrates, plants, fungi, and even unicellular organisms. In humans, more than fourteen different serotonin receptors are expressed in various tissues. Downstream signaling associated with these receptors is related to addiction, aggression, appetite, anxiety, blood pressure, heart rate, sexuality, thermoregulation, memory, perception, gastrointestinal motility, sleep, and more.
One of these receptors, 5-HT2, has three subtypes — 5-HT2a, 5-HT2b, and 5-HT2c — and fulfills a number of functional roles, as shown below. Scientists consider 5-HT2a to be the most important serotonin receptor for inducing «classic» psychedelic experiences.
Neuropsychedelic chemistry
The neurotransmitter 5-hydroxytryptamine (5-HT), better known as serotonin, has a wide range of molecular functions in invertebrates, vertebrates, plants, fungi, and even unicellular organisms. In humans, more than fourteen different serotonin receptors are expressed in various tissues. Downstream signaling associated with these receptors is related to addiction, aggression, appetite, anxiety, blood pressure, heart rate, sexuality, thermoregulation, memory, perception, gastrointestinal motility, sleep, and more.
One of these receptors, 5-HT2, has three subtypes — 5-HT2a, 5-HT2b, and 5-HT2c — and fulfills a number of functional roles, as shown below. Scientists consider 5-HT2a to be the most important serotonin receptor for inducing «classic» psychedelic experiences.
Although other pathways, such as the kappa-opioid receptor (KOR) pathway and the N-methyl-D-aspartate (NMDA) receptor pathway, are involved in distinct psychedelic or psychedelic-like experiences, in this article we will define «classical psychedelic experience». Psychedelics as a subset of compounds that are agonists (i.e., compounds that bind to a receptor and activate its downstream signaling) of the 5-HT2a receptor.
When ingested, psychedelics interact with 5-NT2a and other receptors, resulting in extensive and powerful changes in brain function. Some of the physical effects include tremors, pupil dilation, and changes in blood pressure, heart rate, and motor function. The main indications for the use of 5-HT2a agonists are treatment-resistant depression (TRD), major depressive disorder (MDD), post-traumatic stress disorder (PTSD) and migraine.
As noted above, KOR and NMDA agonists produce distinct hallucinogenic or psychedelic sensations. For example, KOR signaling plays an important role in perception, pain, motor function, and addiction. Companies investigating KOR agonists such as salvinorin A and ibogaine typically target addiction, alcoholism, and opioid use disorder (OUD).
The tables below emphasize the breadth of the sector by summarizing the range of psychedelics that are currently in clinical or preclinical trials. This article focuses on psilocybin, as it is at a relatively mature stage of clinical development.
Forecasts are inherently limited and should not be relied upon. It is not recommended to buy, sell or hold any particular security. Note. This table provides an efficacy-normalized comparison of serotonin and kappa-opioid receptor binding strength for a number of psychotropic substances and includes a list of indications targeted by companies investigating psychedelic or psychedelic derived therapeutics in clinical trials.
Acute psychedelic experience
Because of the problems associated with objectively measuring acute psychedelic experiences, scientists have focused on understanding the neurochemistry of psychedelic compounds, hoping for a clear explanation of these effects. Although the utility of psychedelic compounds as psychiatric drugs may or may not be inextricably linked to the nature of these experiences, we believe that they should not be overlooked in an honest attempt to evaluate the therapeutic potential of psychedelics.
In his TED talk, «Your Brain Hallucinates Your Conscious Reality» — Anil Seth, Professor of Cognitive and Computational Neurobiology at the University of Sussex, observed that perception depends not only «on signals entering your brain from the outside world» but also: «...if not more, on perceptual predictions going in the opposite direction».
What if these «perceptual predictions» become much stronger or weaker than usual? Would each stimulus seem confusing or difficult to distinguish? Would everything look the same?
Google's «Deep Dream VR, an artificial intelligence-driven hallucination machine» has created a virtual experience that attempts to mimic the effects of overly strict object classification predictions on perception, which, while not a perfect simulation of the psychedelic experience, provides what we believe is a convincing model for understanding hallucinogenic effects on human visual processing, as shown here.
Because of the problems associated with objectively measuring acute psychedelic experiences, scientists have focused on understanding the neurochemistry of psychedelic compounds, hoping for a clear explanation of these effects. Although the utility of psychedelic compounds as psychiatric drugs may or may not be inextricably linked to the nature of these experiences, we believe that they should not be overlooked in an honest attempt to evaluate the therapeutic potential of psychedelics.
In his TED talk, «Your Brain Hallucinates Your Conscious Reality» — Anil Seth, Professor of Cognitive and Computational Neurobiology at the University of Sussex, observed that perception depends not only «on signals entering your brain from the outside world» but also: «...if not more, on perceptual predictions going in the opposite direction».
What if these «perceptual predictions» become much stronger or weaker than usual? Would each stimulus seem confusing or difficult to distinguish? Would everything look the same?
Google's «Deep Dream VR, an artificial intelligence-driven hallucination machine» has created a virtual experience that attempts to mimic the effects of overly strict object classification predictions on perception, which, while not a perfect simulation of the psychedelic experience, provides what we believe is a convincing model for understanding hallucinogenic effects on human visual processing, as shown here.
To appreciate the two-way movement of perception and how the mind can fill in information gaps to present the mind with a working model of reality, consider images such as Akiyoshi Kitaoka's «Spinning Snakes» shown below. This static image induces what is known as the «peripheral drift illusion», creating a signal that fools the part of the brain responsible for motion perception.
Although some scientists, such as Robin Carhart-Harris and Roland Griffiths, have uncovered the nature of the psychedelic experience, the link between perceptual distortions and mystical experiences remains unclear. Despite this, some studies prove that the use of classic hallucinogens such as psilocybin can lead to lasting psychotherapeutic effects.
Neuropsychedelic Science Tips
Some studies have linked psychedelics to an increase in functional connections between brain networks. This result is consistent with the increase in synaptic density in pigs after psilocybin administration. It also supports the conclusion of Proceedings of the National Academy that psilocybin enhances the formation of dendritic spurs in mouse cortical neurons, improving synaptic plasticity.
Early evidence suggests that the so-called «psychoplastogenic» effects of psychedelics may be related to the psychedelic experience itself. Without psychedelic experience, for example, Tabernatalog, an analog of the non-classical psychedelic ibogaine, did produce psychoplastogenic effects in mice. Notably, psilocybin administration correlated with a drop in blood flow to the amygdaloid body, which controls fear and anxiety. Psychedelics appear to reduce alpha waves or electrical rhythms in certain areas of the brain. Alpha rhythms are associated with perceptual processing in the «posterior cingulate gyrus», the reduction of which appears to result in loss of ego during acute psychedelic experiences.
Related research suggests that psilocybin disables the «default mode network» (DMN), a brain network responsible for storing autobiographical information and understanding interpersonal relationships and views of the past and future. In addition, the degree of DMN «resetting» appears to predict response to treatment. These data suggest that the psychotherapeutic effects of psilocybin are dependent on threshold doses high enough to induce a «reset» of DMN. Although not strong enough to reject this, these data suggest that «microdosing» psilocybin is not effective in the treatment of depression.
Neuropsychedelic Science Tips
Some studies have linked psychedelics to an increase in functional connections between brain networks. This result is consistent with the increase in synaptic density in pigs after psilocybin administration. It also supports the conclusion of Proceedings of the National Academy that psilocybin enhances the formation of dendritic spurs in mouse cortical neurons, improving synaptic plasticity.
Early evidence suggests that the so-called «psychoplastogenic» effects of psychedelics may be related to the psychedelic experience itself. Without psychedelic experience, for example, Tabernatalog, an analog of the non-classical psychedelic ibogaine, did produce psychoplastogenic effects in mice. Notably, psilocybin administration correlated with a drop in blood flow to the amygdaloid body, which controls fear and anxiety. Psychedelics appear to reduce alpha waves or electrical rhythms in certain areas of the brain. Alpha rhythms are associated with perceptual processing in the «posterior cingulate gyrus», the reduction of which appears to result in loss of ego during acute psychedelic experiences.
Related research suggests that psilocybin disables the «default mode network» (DMN), a brain network responsible for storing autobiographical information and understanding interpersonal relationships and views of the past and future. In addition, the degree of DMN «resetting» appears to predict response to treatment. These data suggest that the psychotherapeutic effects of psilocybin are dependent on threshold doses high enough to induce a «reset» of DMN. Although not strong enough to reject this, these data suggest that «microdosing» psilocybin is not effective in the treatment of depression.
However, as Robin Carhart-Harris points out, the DMN narrative oversimplifies the complex underlying mechanism. He and other scientists have found a link between psychedelic experience and the degree of connectivity between «unimodal» and «transmodal» brain networks. Unimodal networks process information from a single sensory modality, such as visual or auditory, while transmodal networks show an increase in activity unrelated to any one source of sensory input. Transmodal regions appear to serve as mediators linking and integrating both sensory and cognitive information.
https://pubmed.ncbi.nlm.nih.gov/34100349/
Other studies suggest that psychedelics may enhance unimodal and transmodal crosstalk or «compression» of the cortical hierarchy. Such compression can be observed in patients with schizophrenia, suggesting a neurological basis for the confusion of concrete and abstract cognition in both schizophrenic and psychedelic brain states. Not surprisingly, one of the most common drugs for the treatment of schizophrenia, Thorazine, is a 5-HT2a antagonist or blocker.
The impairment of the brain's ability to distinguish between the concrete and abstract emphasizes the importance of the environment in the psychedelic experience. Although studies often utilize guides, music, and other calming stimuli, determining the importance of each factor in clinical outcomes is a methodological challenge.
https://pubmed.ncbi.nlm.nih.gov/34100349/
Other studies suggest that psychedelics may enhance unimodal and transmodal crosstalk or «compression» of the cortical hierarchy. Such compression can be observed in patients with schizophrenia, suggesting a neurological basis for the confusion of concrete and abstract cognition in both schizophrenic and psychedelic brain states. Not surprisingly, one of the most common drugs for the treatment of schizophrenia, Thorazine, is a 5-HT2a antagonist or blocker.
The impairment of the brain's ability to distinguish between the concrete and abstract emphasizes the importance of the environment in the psychedelic experience. Although studies often utilize guides, music, and other calming stimuli, determining the importance of each factor in clinical outcomes is a methodological challenge.
Risks of approval and prospects for psychedelics
In the United States, the estimated combined economic burden associated with major depressive disorder (MDD), opioid use disorder (OUD), and posttraumatic stress disorder (PTSD) in 2022 is ~$1.4 trillion per year. Direct healthcare costs are ~$270 billion dollars. Experts estimate that in 2022, annual U.S. pharmaceutical sales related to these indications will total $44 billion, or ~3.1% of the total economic burden.
For the treatment of MDD, traditional pharmacotherapy with selective serotonin reuptake inhibitors (SSRIs) or tricyclic antidepressants (TCAs) can take months of dose calibration, with efficacy varying significantly from patient to patient. This approach is cost-effective for moderate-to-severe depression. As depression becomes more severe, traditional treatments such as SSRIs become much less cost-effective. To highlight this problem, the U.S. Centers for Medicare and Medicaid Services estimates that only 20% of patients treated for MDD respond partially without remission, and 50% do not respond at all. One study found that 55% of MDD patients discontinued treatment after five months. As healthcare payers are more likely to pay for (and patients are more likely to adhere to) drugs with higher efficacy, experts expect psychedelic therapy to gain significant value.
In our opinion, one of the most important factors limiting the sale of psychedelics is that they require physician supervision. To estimate the prices and costs of psilocybin under current regulations, consider the economics of esketamine. Esketamine (also called S-ketamine) is the S-enantiomer of the drug Ketamine. Ketamine has been used or abused as an anesthetic and tranquilizer since the 1960s.
Ketamine produces euphoric, dissociative, and amnesiogenic effects that have made it a popular street drug. Esketamine is Johnson & Johnson's attempt to reuse ketamine to treat MDD and TRD. Although ketamine is not a psychedelic, it is usually prescribed in specialized treatment centers and requires two hours of observation after administration. Because of its approximately two-week persistence, a year of esketamine treatment may consist of twenty or more sessions of administration.
In the United States, the estimated combined economic burden associated with major depressive disorder (MDD), opioid use disorder (OUD), and posttraumatic stress disorder (PTSD) in 2022 is ~$1.4 trillion per year. Direct healthcare costs are ~$270 billion dollars. Experts estimate that in 2022, annual U.S. pharmaceutical sales related to these indications will total $44 billion, or ~3.1% of the total economic burden.
For the treatment of MDD, traditional pharmacotherapy with selective serotonin reuptake inhibitors (SSRIs) or tricyclic antidepressants (TCAs) can take months of dose calibration, with efficacy varying significantly from patient to patient. This approach is cost-effective for moderate-to-severe depression. As depression becomes more severe, traditional treatments such as SSRIs become much less cost-effective. To highlight this problem, the U.S. Centers for Medicare and Medicaid Services estimates that only 20% of patients treated for MDD respond partially without remission, and 50% do not respond at all. One study found that 55% of MDD patients discontinued treatment after five months. As healthcare payers are more likely to pay for (and patients are more likely to adhere to) drugs with higher efficacy, experts expect psychedelic therapy to gain significant value.
In our opinion, one of the most important factors limiting the sale of psychedelics is that they require physician supervision. To estimate the prices and costs of psilocybin under current regulations, consider the economics of esketamine. Esketamine (also called S-ketamine) is the S-enantiomer of the drug Ketamine. Ketamine has been used or abused as an anesthetic and tranquilizer since the 1960s.
Ketamine produces euphoric, dissociative, and amnesiogenic effects that have made it a popular street drug. Esketamine is Johnson & Johnson's attempt to reuse ketamine to treat MDD and TRD. Although ketamine is not a psychedelic, it is usually prescribed in specialized treatment centers and requires two hours of observation after administration. Because of its approximately two-week persistence, a year of esketamine treatment may consist of twenty or more sessions of administration.
Early clinical evidence suggests psilocybin is more effective and efficient in the treatment of moderate to severe depression due to its once-a-year or twice-a-year schedule and lower relapse rate. The table below illustrates the clear longevity advantage of psilocybin. The one-year recurrence rate of depression associated with psilocybin use is about 2.5 times lower than that of esketamine.
In clinical trials, response rates to psilocybin have been 5-10 percentage points higher than response to escetamine. Based on the «cost per day without depression» (DFD), if the cost of admission, including physician supervision, support staff, and testing, remains relatively fixed, we believe that insurers should be willing to pay $16,900 per dose of psilocybin to achieve the same outcome as escetamine, as shown in the scatter plot below.
Researchers evaluated the response to various antidepressant therapies by dividing the number of patients with improvement in the treatment group by the number of patients with improvement in the control group. Based on this cost-benefit analysis, psilocybin performed better than traditional antidepressants and escetamine.
A moratorium on psychedelic drug research between 1970 and 1990 delayed efforts to improve the pharmacological characteristics of 5-HT2a agonists such as psilocybin and N,N-dimethyltryptamine (DMT). However, many pharmaceuticals, including the migraine drugs Zolmitriptan and Bromocriptine, share a common chemical basis with classic psychedelics.
CSA restrictions have not prevented pharmacologists from finding molecules in the same family as psychedelics. Instead, they seem to have hindered efforts to understand the therapeutic potential of molecules that act as agonists of the 5-HT2a receptor. The number of FDA-approved antagonist (blocker) drugs exceeds the number of 5-HT2 receptor agonist (activator) drugs, as shown below.
In clinical trials, response rates to psilocybin have been 5-10 percentage points higher than response to escetamine. Based on the «cost per day without depression» (DFD), if the cost of admission, including physician supervision, support staff, and testing, remains relatively fixed, we believe that insurers should be willing to pay $16,900 per dose of psilocybin to achieve the same outcome as escetamine, as shown in the scatter plot below.
Researchers evaluated the response to various antidepressant therapies by dividing the number of patients with improvement in the treatment group by the number of patients with improvement in the control group. Based on this cost-benefit analysis, psilocybin performed better than traditional antidepressants and escetamine.
A moratorium on psychedelic drug research between 1970 and 1990 delayed efforts to improve the pharmacological characteristics of 5-HT2a agonists such as psilocybin and N,N-dimethyltryptamine (DMT). However, many pharmaceuticals, including the migraine drugs Zolmitriptan and Bromocriptine, share a common chemical basis with classic psychedelics.
CSA restrictions have not prevented pharmacologists from finding molecules in the same family as psychedelics. Instead, they seem to have hindered efforts to understand the therapeutic potential of molecules that act as agonists of the 5-HT2a receptor. The number of FDA-approved antagonist (blocker) drugs exceeds the number of 5-HT2 receptor agonist (activator) drugs, as shown below.
Interestingly, bias against 5-HT2a agonists may not only be due to outdated regulations or cultural stigma. While studies have shown that most classic psychedelics rarely result in adverse neurotoxic, cardiac, or psychiatric events, drugs that act as 5-HT2a agonists — and have been approved by the FDA — sometimes do.
Three partial 5-HT2a agonists — efavirenz (HIV antiretroviral drug), mefloquine (antimalarial drug), and methysergide (migraine prophylaxis, approval withdrawn) — have been linked to heart valve dysfunction. While this does not mean that 5-HT2a agonism itself causes cardiac arrhythmias, it does suggest that there may be an overlap between compounds that act as 5-HT2a agonists and compounds that modulate cardiac action potentials.
Consider ibogaine, a psychedelic drug derived from the bark of the root of the Tabernate iboga tree. Since the 1990s, scientists have studied ibogaine as a potential medication for treating addiction.
Despite evidence that it is more effective than many of the current treatment options for opioid use disorder (OUD), the FDA has not approved ibogaine. While the FDA may seem biased against drugs that induce psychedelic experiences, another explanation is that ibogaine has been linked to 27 cardiovascular-related deaths, many of them in patients with no previous history of cardiovascular disease.
Three partial 5-HT2a agonists — efavirenz (HIV antiretroviral drug), mefloquine (antimalarial drug), and methysergide (migraine prophylaxis, approval withdrawn) — have been linked to heart valve dysfunction. While this does not mean that 5-HT2a agonism itself causes cardiac arrhythmias, it does suggest that there may be an overlap between compounds that act as 5-HT2a agonists and compounds that modulate cardiac action potentials.
Consider ibogaine, a psychedelic drug derived from the bark of the root of the Tabernate iboga tree. Since the 1990s, scientists have studied ibogaine as a potential medication for treating addiction.
Despite evidence that it is more effective than many of the current treatment options for opioid use disorder (OUD), the FDA has not approved ibogaine. While the FDA may seem biased against drugs that induce psychedelic experiences, another explanation is that ibogaine has been linked to 27 cardiovascular-related deaths, many of them in patients with no previous history of cardiovascular disease.
The challenges associated with conducting clinical trials of psychedelic compounds further complicate matters. They require rigorous validation procedures that limit sample sizes and statistical power. In addition, self-selection can skew results, especially when endpoints are based on measurements of subjective experience. Finally, blinding of both clinicians and trial participants is difficult because the difference between placebo and the experimental compound is obvious.
the situation is changing, although political dynamics may still be a barrier to the approval of many of these substances. The Government currently classifies controlled substances into five different lists, as shown below.
the situation is changing, although political dynamics may still be a barrier to the approval of many of these substances. The Government currently classifies controlled substances into five different lists, as shown below.
The felony or misdemeanor level of drug possession on these lists can vary from state to state. FDA approval of psilocybin, today's classic Schedule I hallucinogen, could reduce it to a lower list, potentially reducing the DEA's ability to prosecute those who possess or distribute it. However, if the FDA approves a specific pharmaceutical formulation of psilocybin, anything other than that dosage form could still fall to Schedule I status.
Regulatory agencies have recently allowed researchers to more efficiently conduct clinical trials of controlled substances.
However, Nora Volkow, director of the National Institute on Drug Abuse, noted in testimony before the U.S. House of Representatives Subcommittee on Health in December 2021 that research on Schedule I substances takes longer, is much more expensive, and even experienced researchers report that obtaining a new Schedule I registration, adding new substances to an existing registration, or obtaining approval to change a study protocol is time-consuming.
Clinical development time is highly correlated with program cost, as shown below. Historically, 22% of clinical trials have failed due to lack of funding. Longer clinical development cycles are strongly correlated with participant attrition and inappropriate dosing, further reducing the likelihood of approval.
In our opinion, psilocybin may provide incremental improvements in the treatment of major depressive disorder (MDD) and treatment-resistant depression (TRD), especially when combined with traditional antidepressants and cognitive-behavioral therapy (CBT).
However, to prevent serotoninergic toxicity and other adverse interactions, patients taking selective serotonin reuptake inhibitors (SSRIs) or other antidepressants will need two to four weeks to discontinue other medications.
Conclusion
We have explored the therapeutic benefits and investment prospects associated with psychedelics, particularly psilocybin. While this summary of the ongoing work on psychedelics is by no means comprehensive, we hope it provides a useful starting point for investors interested in evaluating this area.
While psychedelics have the potential to improve treatments for mental health disorders such as MDD, TRD, PTSD, and OUD, they also carry economic, regulatory, and health risks that investors, drug developers, and patients should carefully consider.
Several factors may limit the potential price of psilocybin to an extent not fully addressed in this article, including: competition from psilocybin retreat centers in places such as Jamasia; competition from compounds with a similar mechanism of action but shorter pharmacokinetics, such as N,N-dimethyltryptamine (DMT); lack of treatment infrastructure; and barriers to adoption due to persistent cultural stigma.
While patent laws on psychedelics remain somewhat ambiguous, analysts should keep in mind that enantiopure alternatives, deuterated forms, and other chemical modifications can circumvent barriers to competition and keep drug prices high. Investors should also consider the extent to which the dynamics of psychedelic psychotherapy may focus economic opportunities on the drug side of treatment rather than pharmaceutical sales.
In the coming years, scientists will continue to find new compounds that elicit beneficial psychoplastogenic effects, improving the degree of detail with which neurobiologists understand the brain's multiple networks and associated crosstalk.
Upcoming discoveries should reveal more information about the nature of the psychedelic experience and allow clinicians to more effectively diagnose mood disorders while developing more effective and safer therapeutic agents.
From this perspective, the psychedelic movement may turn out to be a revolution in neuropharmacology rather than a triumph in the fight against cultural stigma. We believe that psychedelics may usher in a new era of neurobiology, in which discoveries from functional neuroimaging over the past twenty years will be used to address some of the long-standing public health problems associated with mental illness.
We have explored the therapeutic benefits and investment prospects associated with psychedelics, particularly psilocybin. While this summary of the ongoing work on psychedelics is by no means comprehensive, we hope it provides a useful starting point for investors interested in evaluating this area.
While psychedelics have the potential to improve treatments for mental health disorders such as MDD, TRD, PTSD, and OUD, they also carry economic, regulatory, and health risks that investors, drug developers, and patients should carefully consider.
Several factors may limit the potential price of psilocybin to an extent not fully addressed in this article, including: competition from psilocybin retreat centers in places such as Jamasia; competition from compounds with a similar mechanism of action but shorter pharmacokinetics, such as N,N-dimethyltryptamine (DMT); lack of treatment infrastructure; and barriers to adoption due to persistent cultural stigma.
While patent laws on psychedelics remain somewhat ambiguous, analysts should keep in mind that enantiopure alternatives, deuterated forms, and other chemical modifications can circumvent barriers to competition and keep drug prices high. Investors should also consider the extent to which the dynamics of psychedelic psychotherapy may focus economic opportunities on the drug side of treatment rather than pharmaceutical sales.
In the coming years, scientists will continue to find new compounds that elicit beneficial psychoplastogenic effects, improving the degree of detail with which neurobiologists understand the brain's multiple networks and associated crosstalk.
Upcoming discoveries should reveal more information about the nature of the psychedelic experience and allow clinicians to more effectively diagnose mood disorders while developing more effective and safer therapeutic agents.
From this perspective, the psychedelic movement may turn out to be a revolution in neuropharmacology rather than a triumph in the fight against cultural stigma. We believe that psychedelics may usher in a new era of neurobiology, in which discoveries from functional neuroimaging over the past twenty years will be used to address some of the long-standing public health problems associated with mental illness.