After a setback in 2024, the psychedelic-drug field is attracting major investment and producing a growing body of clinical evidence. Eli Lilly has announced plans to acquire psychedelic developer Ataibecly for up to $3.8 billion, while other late-stage programs are reporting benefits for depression, anxiety and post-traumatic stress disorder (PTSD). Researchers say clearer regulatory guidance and new approaches to controlling the duration and intensity of psychedelic experiences could help bring treatments into routine clinical use, although important safety and trial-design questions remain.
The U.S. Food and Drug Administration’s rejection, two years ago, of an application to use MDMA—the active ingredient in ecstasy—to treat PTSD appeared to stall the field. But billions of dollars in investment and new clinical-trial data now suggest that development is moving forward.
The FDA’s decision “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.”
Investment and late-stage trials
In July, Indianapolis, Indiana-based pharmaceutical company Eli Lilly announced plans to acquire New York City-based psychedelic-drug developer Ataibecly for up to $3.8 billion. Its lead asset, BPL-003, is being developed for treatment-resistant depression, which affects millions of people worldwide.
Eli Lilly’s proposed deal is among the largest investments yet in the field. It follows AbbVie’s $1.2 billion acquisition in 2025 of bretisirocin, a short-acting hallucinogen being developed by New York City-based Gilgamesh Pharmaceuticals.
Researchers say the push to develop psychedelic treatments is partly driven by increasingly detailed guidance from regulatory agencies about how these therapies should be studied and delivered. Psychedelic drugs remain a priority in the United States, even as layoffs have reduced the FDA’s regulatory staff. “Where there is a government will, there is a government way,” Yehuda says.
Many psychedelic programs are now in late-stage development. Findings from clinical studies point to 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, reporting significant reductions in symptoms of generalized anxiety disorder. Preliminary research also suggests that psychedelics could have applications in areas such as substance use and eating disorders.
At the same time, researchers are attempting to isolate and refine particular properties of psychedelic compounds. Developers are pursuing drugs that last longer or produce fewer hallucinations, with the goal of making them more practical for clinical use.
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Scientists emphasize that substantial work remains. Researchers need to understand the full range of potential psychological and physical adverse effects, as well as how long the effects of different compounds must last to produce therapeutic benefits.
Continued progress is not guaranteed. The surge of discovery in the late 1990s and early 2000s had precedents in the 1950s and 1960s, but the field 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.
Learning from the MDMA setback
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 its psilocybin treatment, says the failure to obtain FDA approval for MDMA initially had a “really stark impact on the ground.”
In 2024, the FDA raised specific concerns about MDMA therapy from Lycos Therapeutics, now Resilient Pharmaceuticals of Lake Forest, Illinois. One major issue was that participants and researchers could often determine whether a participant was receiving the psychedelic treatment. This problem, known as functional blinding, can complicate the interpretation of trial results.
In July of this year, the FDA finalized guidance for psychedelic testing, including recommendations for reducing functional unblinding.
A psychedelic treatment room at Compass Pathways, a London pharmaceutical research company.Credit: Tom Jamieson/new york times/Redux/aibain
The agency also cautioned that clinical trials might 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 New York City-based business-intelligence provider Cityline, says Lycos’ work was a “guinea pig” for the industry. “Companies now know more about creating great data transmission packages.”
Other developers are applying those lessons. Resilient resubmitted its new-drug application this year. Compass Pathways has 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 developing the health-system infrastructure needed to deliver them.
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New compounds draw attention
MDMA and psilocybin are likely to be the first psychedelics to be “medicated”, Lucas says, but “there are dark horses running in the same room.” Compounds attracting attention include 5-MeO-DMT, the main component of the toxin excreted by Sonoran desert toads (Incilius alvarius), and ibogaine.
Ibogaine can produce an almost complete dissolution of self-consciousness, and its psychedelic effects can last for more than 24 hours. The compound also carries 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 that streamlines research into psychedelic compounds and increases government financial investment. The order specifically focuses on ibogaine, a chemical discovered in a central African bush 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 noted that many safety issues remain unresolved. “It’s important to approach this carefully,” she says.
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Scientific advances and new technological tools could help reduce some of the “weirdness” and risks associated with certain 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