Big Pharma Makes Big Investment in Psychedelic Drug Company

Psychedelic drugs have come a long way since the ‘60s. Once hailed for social and recreational purposes, today LSD, magic mushrooms and other psychedelics are headlining clinical trials for novel treatments for depression and anxiety, addiction, PTSD and schizophrenia, among others.

Big pharma is paying attention. Recently, the McQuade Center for Strategic Research and Development (the U.S. segment of the well-known Japanese drug maker, Otsuka Pharmaceutical Co.) announced its plans to fund $5 million for the development of two new “mindset drug” compounds. While psychedelic drugs are still largely illegal, clinical trials and positive results are beginning to shift their reputation.

In addition to Otsuka, which offers therapeutics for mental health issues and central nervous disorders, other companies and big names are focusing on the broader uses of mindset drugs and the need for decriminalization. Johns Hopkins Medicine, for instance, garnered the first federal grant to study magic mushrooms, formally known as psilocybin, and Peter Thiel, co-founder of PayPal Holdings, has invested deeply in psychedelic start-up Atai Life Sciences (Nasdaq: ATAI). Meanwhile, Oregon became the first state to legalize mindset drugs for therapeutic use while Washington, D.C. voters recently supported the decriminalization of psychedelics used medicinally.

With the global psychedelic drug market expected to grow to over $69 billion by 2026, investors are recognizing their potential, likening psychedelics to marijuana, which has gained broader social and commercial acceptance in recent years. As big pharma continues to stake its claim in psychedelics, more trials and industry growth are anticipated.

If you are looking for some small cap companies in the psychedelic space, consider the following stocks:

  • CYBN (Cybin) – Cybin Inc., is a biotechnology company, which focuses on developing psychedelic therapeutics to treat various psychiatric and neurological conditions.
  • MNMD (Mind Medicine) – Mind Medicine (MindMed) Inc., is a psychedelic medicine biotech company, which discovers, develops, and deploys psychedelic inspired medicines and therapies to address addiction and mental illness.
  • CMPS (COMPASS Pathways) – COMPASS Pathways plc operates as a mental health care company, which develops COMP360, a psilocybin formulation that is in Phase IIb clinical trial to treat patients with treatment-resistant depression.
  • FTRP (Field Trip Health) – Field Trip Health Ltd. engages in the development and delivery of psychedelic therapies and the company operates Field Trip Health Centers that provide psychedelic therapies; offers Field Trip Digital apps; and Field Trip Discovery, a drug development division developing the next generation of psychedelic molecules.
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About the Author

Big Pharma Makes Big Investment in Psychedelic Drug Company

Kerry Corbit

Kerry Corbit is Investors Prism's Editor in Chief and Lead Broadcast Journalist and is based in New York, NY.