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Why pharma firms are betting billions on psychedelic drugs despite setbacks
Lynne Peeples is a science journalist in Seattle, Washington.
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The future of psychedelics is looking bright, after some dark times. Just two years ago, the US Food and Drug Administration (FDA) rejected an application to use MDMA — the active ingredient in the party drug ecstasy — to treat post-traumatic stress disorder. With that refusal, the whole field seemed to stall. But now, billion-dollar investments and more clinical-trial data suggest that the field is forging ahead.
The FDA refusal “stimulated a lot of thought and conversation”, says Rachel Yehuda, a neuroscientist at Icahn School of Medicine at Mount Sinai in New York City. “But it didn’t make people want to give up on these medicines. Everyone can see that loud and clear.”
In July, the drug giant Eli Lilly in Indianapolis, Indiana, announced plans to acquire AtaiBeckley, a psychedelic-medicine development firm in New York City, for up to US$3.8 billion. The company’s lead asset, BPL-003, targets treatment-resistant depression, a condition affecting millions of people around the world.
Eli Lilly’s bet is one of the largest so far. And it comes on the heels of other big investments, such as Illinois-based AbbVie’s $1.2 billion acquisition in 2025 of bretisilocin, a short-acting psychedelic being developed by Gilgamesh Pharmaceutical in New York City.
Why such persistence in the pursuit of psychedelic therapies? Researchers partially credit increasingly clear guidance from regulators worldwide on how these treatments should be studied and used. Even in the United States, where regulatory teams in the FDA have been thinned by layoffs, psychedelics are still a priority. “Where there’s a governmental will, there’s a governmental way,” says Yehuda.
Many psychedelic-development programmes have now advanced to late stages. Findings include rapid and potentially lasting effects for anxiety, depression and post-traumatic stress disorder (PTSD). Definium Therapeutics, based in New York City, released results in August and September from late-stage studies of its LSD-based pill, showing a significant reduction in symptoms of generalized anxiety disorder. Preliminary trials also hint at psychedelic benefits for conditions such as substance-use and eating disorders.
Meanwhile, researchers are zeroing in on specific properties of psychedelics, with the goal of engineering drugs that act for less time and with fewer hallucinations — tweaks that could make them more viable in the clinic.
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