After a period of setbacks, psychedelic drug development is gaining momentum again. Billions of dollars in investment, late-stage clinical-trial results and clearer regulatory guidance are driving renewed interest in treatments based on compounds such as MDMA, psilocybin, LSD, ibogaine and 5-MeO-DMT, although researchers caution that important safety and efficacy questions remain.
Two years ago, the U.S. Food and Drug Administration rejected an application to use MDMA, the active ingredient in ecstasy, to treat post-traumatic stress disorder (PTSD). The decision appeared to stall the field, but investment and clinical research have since accelerated.
The FDA’s refusal “stimulated a lot of thought and discussion,” says Rachel Yehuda, a neuroscientist at the Icahn School of Medicine at Mount Sinai in New York City. “But that hasn’t stopped people from taking these drugs. We can all clearly see that.”
In July, Indianapolis, Indiana-based pharmaceutical giant Eli Lilly announced plans to acquire New York City-based psychedelic-drug developer Ataibecly for up to $3.8 billion. The company’s lead asset, BPL-003, is being developed for treatment-resistant depression, which affects millions of people worldwide.
Eli Lilly’s proposed deal is one of the largest investments in the field. It follows other major commitments, including Illinois-based AbbVie’s $1.2-billion acquisition in 2025 of bretisirocin, a short-acting hallucinogen being developed by New York City-based Gilgamesh Pharmaceuticals.
Why the renewed interest?
Researchers say regulatory agencies around the world are providing increasingly clear guidance on how psychedelic treatments should be studied and administered. Psychedelic drugs also remain a priority in the United States, even as layoffs have reduced the FDA’s regulatory workforce. “Where there is a government will, there is a government way,” Yehuda says.
Many psychedelic-development programmes are now in late-stage trials. Research has reported rapid and potentially long-lasting effects on anxiety, depression and PTSD. New York City-based Definium Therapeutics announced results in August and September from late-stage studies of LSD-based pills that showed significant reductions in symptoms of generalized anxiety disorder. Preliminary research also points to possible applications in conditions including substance-use and eating disorders.
Researchers are also studying the individual properties of psychedelic compounds. Their aim is to develop treatments that last longer or produce fewer hallucinations, potentially making them easier to use in clinical settings.
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Scientists stress that much more work is needed. Further research must establish the full range of possible psychological and physical adverse effects, as well as how long the effects of different compounds need to last to produce a therapeutic benefit.
Progress is not guaranteed. The surge in research during the late 1990s and early 2000s echoed earlier activity in the 1950s and 1960s, but that work was suppressed by the US government-led war on drugs, says Philip Lucas, research director at the Interdisciplinary Association for Psychedelic Research, a nonprofit organization in San Jose, California. “So I always keep that red flag in the back of my mind.”
Even so, Lucas says “there seems to be a lot of footfall” in the field, given the scale of recent investment.
Is it more boom than bust?
Ekaterina Maliyevskaya, co-founder and chief executive of n1 bio, an autism biotechnology company in Miami, Florida, and co-founder of Compass Pathways, a London-based psychedelic-development company seeking US approval for a psilocybin treatment, says the failure to secure FDA approval for MDMA initially had a “really stark impact on the ground.”
In 2024, the FDA raised specific concerns about MDMA-assisted therapy from Lycos Therapeutics, now Resilient Pharmaceuticals of Lake Forest, Illinois. One major problem was that participants and researchers could often determine whether a person was receiving the psychedelic treatment during the trial. This phenomenon, known as functional blinding, can complicate the interpretation of results. In July of this year, the FDA finalized guidance for psychedelic testing, including advice on reducing functional blinding.
A psychedelic treatment room at Compass Pathways, a London pharmaceutical research company.Credit: Tom Jamieson/New York Times/Redux/aibain
The agency also warned that clinical trials could struggle to separate the effects of MDMA from those of the accompanying psychotherapy. Both safety and efficacy are likely to depend on the treatment setting, Yehuda says.
Emma Will, an analyst at business-intelligence provider Cityline in New York City, says Lycos’ work was a “guinea pig” for the industry. “Companies now know more about creating great data transmission packages.”
Other companies are applying those lessons. Resilient resubmitted its new-drug application this year. Compass Pathways, meanwhile, announced positive results from two late-stage trials of psilocybin therapy for treatment-resistant depression. “It seems inevitable that they will get licensed,” says Robin Carhart-Harris, a neuroscientist and psychopharmacologist at the University of California, San Francisco.
The US government also appears to be preparing for progress in the field. An August report from the U.S. Substance Abuse and Mental Health Services Administration in Rockville, Maryland, urged states to prepare for possible FDA approval of psychedelic treatments. Its recommendations included building the health-system infrastructure needed to deliver them.
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MDMA and psilocybin are likely to be the first psychedelics to be “medicated”, but “there are dark horses running in the same room,” Lucas says. Compounds attracting attention include 5-MeO-DMT, a major component of the toxin excreted by Sonoran desert toads (Incilius alvarius), and ibogaine. Ibogaine can cause an almost complete dissolution of self-consciousness, and its psychedelic effects can last for more than 24 hours while carrying cardiovascular risks. “Ten years ago, many of us would have thought these were the least likely to be developed into drugs,” Lucas says.
US President Donald Trump signed an executive order in April to streamline research into psychedelic compounds and increase government financial investment. The order focuses specifically on ibogaine, a chemical derived from a central African shrub that is being studied as a treatment for substance-use disorders and PTSD. In October, the FDA issued a request for public input on plans for federally funded clinical trials of ibogaine.
Odette Hauck, a regulatory-affairs consultant based in Los Angeles, California, welcomed the move but said many safety issues remain unresolved. “It’s important to approach this carefully,” she says.
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Scientific discoveries and technological tools are also helping researchers reduce some of the “weirdness” and risks associated with psychedelics. By modifying molecules to shorten or eliminate the psychedelic experience, developers hope to reduce the time, supervision and cost required for treatment.
Source: www.nature.com
