Traditionally, the topic of psychedelic drugs may have brought back thoughts of the 1960s, when use of these drugs began to pick up. However, new research suggests that many of these street drugs could be life-saving treatments for some devastating, hard-to-treat conditions.
A major milestone for psychedelic drugs
In fact, the U.S. Food and Drug Administration (FDA) could review and perhaps even approve the first psychedelic drug in the coming weeks or months. Many biotech companies are working on similar drugs for a variety of mental health and chronic pain conditions.
However, in what is widely seen as a landmark regulatory milestone for the U.S., the MAPS Public Benefit Corporation became the first to submit a new drug application to the FDA for an MDMA-assisted therapy in December. If the organization's application for its therapy to treat post-traumatic stress disorder (PTSD) is approved, it will be the first psychedelic-assisted therapy to receive the FDA's stamp approval.
As a subsidiary of a non-profit organization, MAPS PBC is not publicly traded. However, many up-and-coming biotechnology companies also have promising psychedelic treatments in development, and their stocks are certainly worth watching. Here are four biotech firms currently working on psychedelic therapies for hard-to-treat conditions.
Bright Minds Biosciences
Bright Mind Biosciences (DRUG) is developing psychedelic treatments designed to regulate serotonin. Serotonin receptors play a significant role in regulating cognitive functions, emotions, memory and the sleep-wake cycle. In fact, a dysfunctional serotonin system has been linked to a variety of diseases spanning neuropsychiatric, seizure and pain disorders.
Bright Mind is currently developing treatments for neuropsychiatry, pain and epilepsy. Its pipeline includes BMB-101, which is in Phase 1 clinical trials for Dravet syndrome, psychosis in Alzheimer's disease, addictions and binge eating. BMB-202 is in the investigational-new-drug (IND)-enabling stage with a focus on depression, anxiety and PTSD.
GH Research
GH Research (GHRS) is working on treatments for psychiatric and neurological disorders, with a current focus on ultra-rapid, durable remission for treatment-resistant depression, including depression in bipolar II and postpartum depression. The lead candidate in the company's pipeline is GH001 for hard-to-treat depression in these three areas.
GH001 is GH Research's formulation of mebufotenin, which is administered via a proprietary inhalation approach. So far, the company has completed two Phase 1 clinical trials in healthy volunteers and a Phase ½ trial in patients with treatment-resistant depression (TRD). Currently, GH001 is in a Phase 2b trial in patients with TRD and Phase 2 open-label trials in patients with bipolar II and postpartum depression.
GH Research's other candidates include GH002 and GH003, which are mebufotenin formulations designed for proprietary administration approaches via intravenous and intranasal routes, respectively. Both candidates are in the earlier stages of testing.
Incannex Healthcare
Australia-based Incannex (IXHL), which also trades on the Nasdaq, has 28 different projects underway, all with the goal of alleviating human suffering. In all 28 projects, the proof of concept has already been established in either pre-clinical, Phase 1 or Phase 2 studies. However, Incannex is especially focused on its nine active development programs, all of which focus on conditions for patients with unmet medical needs. The company's pipeline includes treatments for four conditions that are currently in Phase 2a trials.
Psi-GAD is a form of psilocybin designed to treat anxiety. On the other hand, IHL-675A is a cannabinoid-enhanced combination drug containing hydroxychloroquine and cannabidiol, better known as CBD. IHL-675A targets inflammatory lung disease, rheumatoid arthritis, and inflammatory bowel disease.
Incannex also has a treatment for obstructive sleep apnea in Phase 2b trials and a therapy for concussion and traumatic brain injury in a Phase 1 trial. Finally, the company's CanQuit treatment for tobacco-smoking cessation and opioid addiction is in the pre-clinical stage, as is its ReneCann treatment for vitiligo, psoriasis and eczema.
Seelos Therapeutics
Seelos Therapeutics (SEEL) is focused on addressing significant unmet needs in neurological disorders and rare diseases by developing multiple candidates with proven mechanisms of action. The company's pipeline includes SLS-002, an intranasal formulation of ketamine to treat acute suicidal ideation and behavior in major depressive disorder. Seelos expects data from a registration-directed study soon.
It's also developing SLS-005 (trehalose) to treat amyotrophic lateral sclerosis, better known as ALS or Lou Gehrig's disease, and spinocerebellar ataxia. Seelos also expects top-line data from a pivotal Phase 2/3 study in ALS soon. The company also has a gene therapy for Parkinson's and a protein-targeted autophagy treatment for Huntington's, Alzheimer's and ALS in development.
Investing in psychedelic biotech stocks
Over the years, many drugmakers have faced numerous challenges in developing effective therapeutics for hard-to-treat illnesses. These devastating conditions make life extremely difficult for those who have them — and for their loved ones. However, psychedelic treatments like those discussed above are offering new hope for patients and their loved ones. Thus, any successful treatments in challenging areas of medicine like chronic pain and mental health will certainly be a goldmine, both for the drugmaker that develops them and for the patients and loved ones who benefit from them.
In fact, one estimate suggests the global psychedelic drugs market was worth $752.3 million in 2022 and projects a compound annual growth rate of 13.4% between 2023 and 2032, bringing its valuation to $2.6 billion. Of course, investors are always advised to do their own due diligence before investing in any specific stock or sector.
Ari Zoldan is CEO of Quantum Media Group, LLC, and Incannex is a client of Quantum Media Group.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Ari Zoldan
Ari Zoldan is the CEO of New York-based Quantum Media Group, LLC. The company provides investor relations, public relations and equity research services to publicly traded companies. As an on-air media personality, Ari can be seen regularly on major media outlets and is frequently quoted in mainstream news outlets covering business, innovation and emerging trends.
Read Ari's Bio