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Why federal agencies say now is the time to explore psychedelics

Regulators are beginning to recognize the therapeutic potential of once stigmatized compounds for mental health disorders like treatment-resistant depression (TRD) and post-traumatic stress disorder (PTSD).

In 2017, 3,4-methylene-dioxymethamphetamine (MDMA) received a breakthrough therapy designation (BTD) from the US Food and Drug Administration (FDA). A year later, psilocybin received a BTD for TRD. In 2019, the FDA approved esketamine (also known as S-ketamine) — one of the two stereoisomers of racemic ketamine — for patients with TRD. In 2021, a strong readout from a phase 3 trial of MDMA-assisted therapy for PTSD was published in Nature Medicine1. Then, in 2022, positive results from the largest study of a psychedelic compound in history, a phase 2b double-blind, randomized controlled study of psilocybin for TRD, were presented at the American Psychiatric Association’s annual meeting2. Later that same year, leaders from the Substance Use and Mental Health Administration (SAMHSA) at the US Department for Health and Human Services (HHS) wrote to lawmakers to express their interest in a public–private taskforce to guide the implementation of therapeutic psychedelics.

Given that the US government issued a total ban on psychedelics in the Controlled Substances Act of 1970, this is quite a change of pace. So how did we get here?

Crossing the ‘valley of death’

According to GlobalData, between 2017 and February 2022, regulators approved more than 116 new oncology drugs but only six new central nervous system (CNS) drugs. So why the difference?

CNS drug development is notoriously difficult for several reasons. For example, most drugs focus on single targets in the body, often relying on one interaction with a protein or receptor for their therapeutic effects. While this may be sufficient in some cases, the brain is too complicated for this approach. Also there have been significant difficulties in translation from animal models to humans. As a result, many drugs fail to cross what has become known as CNS drug development’s ‘valley of death’ between preclinical studies and the end of phase 2 trials.

Before 2018, the last major advancement in mental healthcare was the 1988 introduction of fluoxetine, the first selective serotonin reuptake inhibitor (SSRI). Selective norepinephrine reuptake inhibitors (SNRIs) and new SSRIs followed shortly thereafter.

“These drugs were undoubtedly important for patients and meaningfully advanced the treatment of major depressive disorder,” said Srinivas Rao, co-founder and chief scientific officer of atai. “However, only about a third of patients achieve full remission with SSRIs, leaving the rest without effective treatment options.” (Fig. 1).

Figure 1. World Health Organisation statistics highlighting the unmet need for innovation in mental health treatment. FDA, US Food and Drug Administration; SSRI, selective serotonin reuptake inhibitor.

While our understanding of depression and other mental health disorders has evolved from monolithic models to complex heterogeneous conditions with significant physical and mental health co-morbidities, SSRIs and SNRIs remain frontline medications due to the popularity of the serotonin hypothesis. However, new research suggests that there is little evidence to support serotonin imbalance as the cause of depression3.

Regardless, the lack of reliable options is an enormous issue given that at least 1 billion people worldwide are affected by mental health disorders4 (Fig. 2).

Figure 2. Statistics that highlight the current worldwide impact of depression according to World Health Organization, Institute for Health Metrics and Evaluation17 and Pharmacoeconomics18. MDD, major depressive disorder.

“This is why we felt we had to think outside the box and act with urgency,” said Florian Brand, co-founder and chief executive officer of atai. “We need new tools to address this crisis.”

Leadership at the HHS seems to feel the same way.

“SAMHSA agrees that too many Americans are suffering from mental health and substance use issues, which have been exacerbated by the ongoing COVID-19 pandemic, and that we must explore the potential of psychedelic-assisted therapies to address this crisis,” wrote Miriam E. Delphin-Rittmon, assistant secretary for mental health and substance use at SAMHSA, in a May 2022 letter to Madeleine Dean, the US representative for Pennsylvania’s fourth congressional district.

A new model of care

Intravenous (IV) ketamine had previously been used off-label to treat severe depression and acute suicidality5; however, the 2019 approval of S-ketamine by the US FDA marked the first time this type of care would be eligible for reimbursement by insurers, significantly increasing access to care.

S-ketamine was an enormously important milestone that introduced our healthcare system to a new model of mental healthcare,” said Rao. “Rather than a daily pill, these treatments are episodic and involve supportive care focused on behavioural change.”S-ketamine works as a selective antagonist of the N-methyl-D-aspartate (NMDA) receptor, which is thought to underlie its anaesthetic and dissociative properties6. Because of its potential for side effects, S-ketamine may be administered only at a certified treatment centre under a clinician’s care. S-ketamine’s effects last for approximately 45 min, but patients must remain onsite for at least 2 h for observation and are prohibited from driving for the remainder of the day. Initially, the treatment schedule involves two sessions a week for 4 weeks, followed by a tapering period.

Unfortunately, logistical challenges and high cost of administration have hindered the drug’s potential, and it has not reached as many patients as anticipated. Moreover, these burdens, coupled with perceived lukewarm results in some phase 3 trials, proved to be insurmountable for the UK National Institute for Health and Care Excellence (NICE), which declined to reimburse S-ketamine’s use for TRD in the UK7.

“Introduction of S-ketamine into clinical practice in the [National Health Service] NHS will be complex because the structure and delivery of services would need to be changed,” said Meindert Boysen, director of the Center for Health Technology Evaluation at NICE, in a 2020 statement. “Estimates of the costs of providing the clinical service for S-ketamine were highly uncertain, as are the costs of repeated courses of the drug.”

In June 2022, NICE issued a final appraisal document on the issue, standing by its original position. It noted that “there would need to be a significant investment to use S-ketamine in the NHS,” given the high costs associated with administering the drug to patients. The agency also suggested that the initial cost study “underestimated the true cost of implementing S-ketamine in clinical practice.”

Yet, despite the difficulties with rollout globally, S-ketamine has been the first significant innovation in decades for patients suffering from mental health disorders. However, it is not the only novel therapeutic being studied. In fact, companies like atai and COMPASS Pathways anticipate that a host of therapeutic psychedelics will find their way into the mainstream healthcare continuum.

The largest psychedelics trial in history

Psilocybin — an active ingredient in what is colloquially known as ‘magic mushrooms’ — is perhaps the most widely known psychedelic and its mechanism of action has been studied extensively.

Six separate clinical trials over the past 15 years have shown impressive reductions in depressive symptoms in patients treated with a combination of psilocybin and psychological support. Most recently, a head-to-head comparative study found that psilocybin reduced symptoms of depression as well as, or better than, escitalopram, which is a frontline SSRI (ref. 4).

Yet, while there are currently approximately 82 psilocybin clinical trials in various phases of development according to a search on, a major breakthrough came at the end of 2021, with a readout from COMPASS’ phase 2b double-blind, randomized controlled study of psilocybin for TRD. The objective was to find the appropriate dose for a larger, pivotal phase 3 programme, which COMPASS expects to begin in late 2022.

The trial comprised 233 patients across a dozen sites in North America and Europe and successfully met its primary endpoint: a statistically significant difference in the total score on the Montgomery–Åsberg Depression Rating Scale (MADRS) — which is widely used and accepted for assessing depression — between the therapeutic and control group from baseline to week 3.

This was the largest trial of any psychedelic in history.

The therapeutic experience of trial participants was carefully controlled. Patients were provided with eyeshades, noise-cancelling headphones and a preselected music playlist, and were monitored by two psychologists throughout the 4–6 h experience (Fig. 3). In general, the clinicians did not actively engage the patients, instead helping them focus on the experience, a practice termed ‘non-directive inquiry.’ Most patients remained calm and focused throughout the treatment, with only one requiring medical intervention for anxiety.

Figure 3. Patients are provided with eyeshades and noise-cancelling headphones for their psilocybin therapeutic experience.Credit: COMPASS Pathways.

“These are people who have been failed by two-to-four treatments within this current episode of depression, and for most of these folks, this was not their first episode,” said Steve Levine, senior vice president of patient access at COMPASS. “The fact that we saw the remission rates that we did as quickly as we did, as well as durability from a single treatment was, as a psychiatrist and as someone who works with people with depression every day, mind-blowing, remarkable.”

As COMPASS prepares for the final phase of its flagship research programme and begins thinking about the commercialization of psilocybin for TRD, many have noted that innovation should not end there, given the other enormous gaps in care for some mental health disorders.

Indeed, in July 2022, COMPASS announced the launch of a phase 2 trial of its synthetic psilocybin, COMP360, for anorexia nervosa. “There are no approved pharmacological treatment options for people living with anorexia nervosa, and we are determined to change this,” said Guy Goodwin, chief medical officer of COMPASS. “We are conducting this rigorous clinical trial to understand whether COMP360 psilocybin, with psychological support, could help people living with anorexia nervosa who urgently need new options.”

But psilocybin is far from the only psychedelic with therapeutic potential.

What comes after psilocybin?

Arketamine (also known as R-ketamine), ketamine’s often overlooked right enantiomer, belongs to a new generation of glutamate receptor modulators with the potential for rapid-acting antidepressant (RAAD) activity and anti-suicidal effects.

Like S-ketamine, R-ketamine acts as a selective antagonist of the NMDA receptor, which is responsible for the anaesthetic and hallucinogenic effects associated with ketamine8, although preclinical studies suggest this activity is not likely to play a major role in its antidepressant effects9. The difference between the two stereoisomers lies in the potency of their interaction with the NMDA receptor. R-ketamine’s impact is four-to-five times lower than that of its sister molecule, so patients may experience little-to-no dissociation10.

The atai company Perception Neuroscience is already running a phase 2a double-blind, placebo-controlled trial of PCN-101 R-ketamine in 93 patients with TRD. Results are expected by the end of 2022 (ref. 11).

“We are doing this to see how long it takes for their depressive symptoms to return after treatment in order to help us guide how frequently to dose patients and at what strength,” said Kevin Craig, vice president of clinical development at atai. “We want patients to have the flexibility to take this drug at home, which would allow for greater patient access compared with S-ketamine. At the end of the day, we just want to help as many people as we can.”

atai is also looking at numerous other compounds for a range of indications, including classic psychedelics like ibogaine for opioid use disorder (OUD) and N,N-dimethyltryptamine (DMT) for TRD.

Ibogaine, a synthetic version of which is under development by atai company DemeRx, is a psychedelic compound found in the root bark of the African shrub Tabernanthe iboga. First synthesized in 1966, it was marketed as Lambarène in France for a variety of indications. Although it enjoyed great popularity among athletes, it was withdrawn from the market when all ibogaine-containing medicines were declared illegal in France.

Yet, anecdotal evidence regarding ibogaine’s therapeutic effects had already begun to emerge. In 1962, Howard Lotsof and five friends — all heroin addicts — began experimenting with ibogaine and found their cravings and withdrawal symptoms significantly reduced. Speaking with The New York Times in 1994, he said he was searching for a new high when he took a bitter white powder from an exotic West African shrub: “The next thing I knew, I was straight.”

Although DemeRx’s phase 1 single ascending dose (SAD) trial of ibogaine for OUD is still ongoing, numerous open-label studies have suggested that even a single dose can result in remission and abstinence. And although the exact mechanisms that produce ibogaine’s dissociative psychedelic effects are unclear, it has been speculated that action at the kappa opioid receptor contributes significantly12. Additional effects may come from ibogaine’s function as a potent serotonin reuptake inhibitor (SRI).

Even among psychedelics, however, DMT stands out. Sometimes called the ‘spirit molecule’, DMT is an endogenous molecule present in the South American beverage ayahuasca. This entheogenic brew often contains extracts of the vine Banisteriopsis caapi and the shrub Psychotria viridis, along with various other ingredients13. In this form, DMT’s effects can persist for up to 3–6 h, due to the presence of monoamine oxidase inhibitors (MAOIs), which prevent oxidization of DMT in the digestive tract and allow it to be absorbed in the stomach and small intestine. Without this, the body metabolizes orally ingested DMT too quickly to allow it to have any effect14.

By contrast, DMT exhibits a comparatively more rapid onset and shorter duration-of-action when not administered alongside the MAOIs present in ayahuasca brew. Unlike a psilocybin experience, which can last upwards of 6 h, DMT’s hallucinogenic effects can pass in just 15 min.

While few well-controlled clinical studies have explored isolated DMT as a treatment for depression, several small studies have demonstrated ayahuasca’s utility in treating major depression15. In vitro assays employing rat neurons showed that DMT promoted neuroplasticity as assessed by neuronal growth and increased synaptic connections, which are processes correlated with improvements in depressive symptoms16.

Yet, despite the prominence of psychedelic compounds on its platform, Brand stresses that atai is a mental health company rather than a psychedelics biotech (Fig. 4).

Figure 4. atai Life Sciences has a robust pipeline with drug-development programmes across several mental health indications with large unmet needs. DMT, N,N-dimethyltryptamine; MDMA, 3,4-methylenedioxymethamphetamine; MSA, Master Service Agreement; OUD, opioid use disorder; TRD, treatment-resistant depression; VIE, variable interest entity. Download the PDF here

“We didn’t set out to develop psychedelics. Rather, we looked at de-risked compounds with prior evidence in humans and some evidence of efficacy,” said Brand. “It just so happened that many of those compounds had psychedelic effects, but we brought non-psychedelics onto the platform as well.”

Moreover, as promising as psilocybin, R-ketamine, ibogaine and DMT — as well as the non-psychedelic compounds on atai’s platform — may be, researchers are committed to looking for increasingly efficacious drugs that have even more rapid onset, a shorter duration of psychedelic effects, or perhaps no psychedelic component at all. Since 2018, atai has launched multiple research platforms dedicated to creating novel drugs using various new technologies that harness artificial intelligence (AI), ‘big data’ and small-molecule therapy (SMT).

For example, atai’s drug-development platform EntheogeniX uses an AI-enabled computational biophysics platform to generate de novo chemical entities — selecting for a panel of useful pharmacological targets while avoiding undesirable anti-targets — to develop as treatments for various mental health indications. The platforms used by EntheogeniX allow researchers to visualize the complete polypharmacological profile of a compound, helping predict its effects on the human proteome and thus avoid the unforeseen side effects often discovered in late-stage clinical trials.

Speaking to Fierce Biotech in 2019, Rao said this could lead to medications “that offer the putative benefits of existing psychedelic therapies, but with enhanced properties such as a more pronounced impact on neuroplasticity despite a shorter duration of psychedelic effects and improved cardiovascular safety.”

Regulatory approval is only half the battle

As psychedelics and related therapies make their way toward regulatory approval, one question that researchers and drug developers must increasingly focus on is how to get the therapies to patients.

According to Delphin-Rittmon, “[The] use of psychedelic medicines will require a broad-spectrum interdisciplinary stakeholder approach to effectively tackle the complexity of issues that stakeholders anticipate will arise with their introduction.”

Data generated from clinical trials must not only be useful for regulators but should also speak to the cost-effectiveness of novel therapies for health plans considering coverage. Moreover, insurers and health systems must be aligned on the price points of the therapy, which will likely include the time required for the therapists and clinicians to monitor patients. Finally, standards of care must be established, and therapist-training programmes must be developed and implemented rapidly to bridge the already significant healthcare workforce gap.

But these are not impossible challenges.

Companies like atai and COMPASS are already engaged in discussions with the FDA and other key healthcare stakeholders to better understand and prepare the conditions for the smooth rollout of new drugs. And while there is still work to do, consensus on the need to accommodate innovation is at an all-time high.

“Leaders shouldn’t be afraid to lead if it really makes a difference in people’s lives,” said Rick Perry, former governor of Texas and US secretary of energy from 2017 to 2019 under the Trump administration, in 2021. “If those conservatives down there in Texas are willing to allow these psychedelics in these clinics to save these people’s lives, why don’t we do it in Oklahoma? Why don’t we do it in Mississippi? Why don’t we do it in Florida?”

In short, we’ve come a long way from 1970s prohibition.


Rolando Gutierrez-Esteinou, chief medical officer


atai Life Sciences,

Wallstraße 16,

10179 Berlin,



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