Wall Street Backs New Class of Psychedelic Drugs

Psychedelic drug makers, such as Transcend Therapeutics, Gilgamesh Pharmaceuticals, and Lusaris Therapeutics, are raising tens of millions of dollars to develop and launch treatments for depression and PTSD that backers believe could help reduce mental health costs.

Last month, Transcend raised $40m from venture capitalists to develop an PTSD treatment that requires half the amount of therapy as ecstasy, while Lusaris Therapeutics and Gilgamesh Pharmaceuticals both raised around $100m since November 2021 for similar products. All three firms claim that their drugs will wear off faster than MDMA and psilocybin, meaning that the therapies could be administered more cost-effectively. However, some experts have criticised the companies for trying to create patentable drugs that will be far more costly than traditional psychedelics without an improvement in outcomes.

FDA may approve MDMA and psilocybin treatments in the next few years, but their rollout could be costly as they require trained therapists for administration. These treatments induce psychedelic trips lasting several hours and involve pre- and post-therapy.