Doors of perception: Psychedelic renaissance or Pandora’s box?

psychedelics may win FDA approval under constrained circumstances

[Knatter Knarz/Adobe Stock]

In one sense, psychedelics have always been divisive in mainstream Western culture. During their heyday in the 1960s, proponents lauded psychedelics’ virtues for psychological healing and exploration. But troubling reports also emerged — stories of bad trips, psychological breaks and mostly apocryphal yet sensationalized reports of individuals leaping from buildings while under the influence. This darker side, combined with Nixon’s targeting of drugs popular with hippies, cast a pall over psychedelic research for decades, making the prospect of FDA approval seem like a practical impossibility.

Psychdelic resurgence and pursuit of FDA approval

But now, thanks to loosening restrictions, psychedelics are as hip as they have been in decades, and are a popular research subject in many academic circles. In June, FDA released guidance for psychedelic drug development. The Multidisciplinary Association for Psychedelic Studies (MAPS) eyes approval for MDMA for PTSD in the next year or so. Psilocybin could win the FDA stamp for depression relatively soon as well now that Compass Pathways has a Phase 3 study underway to explore its potential in treatment-resistant depression.

Letting the psychedelic cat out of the bag

Meanwhile, Oregon has legalized psilocybin and a growing number of jurisdictions are considering decriminalizing plant- or fungi-based psychedelics. Yet mental health practitioners like Lyndsey Ryan, program director at Tara Mind, are urging a medical framework to guide their use. “If we moved straight into the recreational space, I think there would just be much more risk,” Ryan said.

Psychedelics offer significant potential for healing, Ryan noted. After providing traditional therapeutic modalities, surging interest in ketamine, MDMA and classic psychedelics have given therapists hope for treating challenging cases. “I finally felt like I had solutions that were effective, that were safe,” Ryan said, who has been involved in administering ketamine to hundreds of patients. “Patients experienced symptom remission in just a few months, a stark contrast to the often grueling, prolonged anguish of conventional treatments,” she said.

[Guy M. Goodwin, Megan Croal, et al. Licensed under Creative Commons Attribution 4.0 International License].

A recent phase 2 study from Compass Pathways on the effects of psilocybin in conjunction with SSRIs highlighted a significant reduction in Montgomery-Åsberg Depression Rating Scale (MADRS) scores, a common measure of depression.

Calls for a medical framework for psychedelics

She emphasized the need to provide psychedelic therapies through the established medical framework, which many people already trust.

“We know research-wise, [psychedelic] dosing matters,” Ryan articulated. “Timelines matter. Prep, integration and ongoing monitoring— all of that matters tremendously.” If patients don’t follow these established protocols, we shouldn’t expect the same positive outcomes we’ve seen in clinical studies.

This is not a new sentiment. Indeed, Stanislov Grof, who helped pioneer psychedelic therapy in the late 1960s, did not believe that compounds like LSD were innately therapeutic. Although he explored different formats, he stressed the need for protocols that included supportive environments to induce profound inner journeys with the support of music to tap the psyche’s healing capabilities.

Recent advances in neuroscience and the involvement of notable institutions such as Harvard, Johns Hopkins, Berkeley and Imperial College of London, have lent credibility. Researchers have tapped advanced neuroimaging techniques, for instance, to understand psychedelic effects on the brain, yielding a more methodological and evidence-based approach than studies from the middle of the twentieth century.

The protocols for administering psychedelics are also more mature.  “We’ve recognized what is effective,” Ryan said.

Major players in the industry have expressed similar thoughts. Christian Angermayer, the founder and CEO of Atai Life Sciences argued that, if decriminalization efforts surge ahead of a mature medical framework for these compounds, it could limit psychedelics’ therapeutic reach.

While some psychedelic studies have shown promise, for instance, in treating alcoholism with defined protocols, the medical establishment has long warned against the risks of individuals self-experimenting with psychedelics. As early as 1967, JAMA noted there were multiple “excellent clinical studies” that “firmly documented the hazards” of such psychedelic self-experimentation.

“That way we can ensure that access is especially for folks who have a predisposition towards addiction or in recovery, that we’re not just kind of playing with fire essentially, in terms of those addiction risks,” Ryan said.

Surging decriminalization efforts

Meanwhile, efforts to decriminalize natural psychedelics are gaining steam. A growing number of cities like Denver, Oakland, San Francisco, Berkeley and Seattle have decriminalized psilocybin and other plant medicines in recent years. Oregon has gone further, becoming the first state to legalize magic mushrooms for therapeutic use. Complicating matters, however, are criticisms that the state has already botched the decriminalization of drugs in general.

On the heels of these changes, on May 9, 2023, Washington’s Governor Jay Inslee signed the Washington Psilocybin Services Act, also known as Senate Bill 5263, which sets up a psilocybin task force and begins a clinical trial program at the University of Washington.

Pennsylvania and California are also exploring decriminalizing natural psychedelics.

Cost and gray market considerations

Cost between therapeutic vs. black market psilocybin

The left bar represents therapeutic psilocybin sessions in one center in Oregon. The right represents a typical black market price for a 4-gram high dose trip.

In early May, Oregon issued the first license for therapeutic psilocybin. The emergence of regulated psilocybin service centers in Oregon raises the question of cost. With some centers charging up to $3,500 for a single high-dose session, critics question the justification of such prices, which are not covered by insurance. Such hefty price tags could limit access to lower-income patients most in need while also scare away investors convinced that therapeutic psilocybin in Oregon will find a limited number of takers.

Simultaneously, Colorado’s more lenient stance concerning psilocybin has given rise to a gray market. Entrepreneurs there have identified legal loopholes such as guided psychedelic sessions and microdosing consults. Black-market sellers are also taking notice, selling wares on platforms like Facebook Marketplace.

Incidentally, while a 4-gram high dose trip cost five figures in Oregon, it would cost closer to roughly $40. While prices vary, magic mushrooms are often priced around $10 per gram, and even lower when bought in bulk. This vast price discrepancy, coupled with easy accessibility on platforms like Facebook Marketplace, has intensified the competition.

Investors, recalling the financial turbulence of the cannabis industry, are increasingly wary when it comes to investing in psychedelics, which remain Schedule 1 substances federally. Further complicating matters is the March financial collapse of the Synthesis Institute, a major training institution for psilocybin therapists in Oregon. Such incidents have magnified investor concerns, who worry that the psychedelic market may be more hype than substance.

Silicon Valley support a wild card

In tandem with growing decriminalization efforts, psychedelic drug use has entered the mainstream of Silicon Valley’s corporate culture, as WSJ has noted. Microdosing, taking sub-threshold dosing of drugs like psilocybin or LSD, is especially popular. Meanwhile, tech entrepreneurs like Elon Musk and Sergey Brin have openly used substances ranging from psychedelics to the dreamy dissociative anesthetic ketamine.

Venture capital isn’t far behind this trend. Prominent VCs have invested about $347 million in psychedelics startups, according to Business Insider. The Founders Fund, known for their investments in giants like SpaceX and Facebook, has vested interests in the psychedelic space, holding a stake in Compass Pathways, which is engaged in phase 3 psilocybin development. Peter Thiel, the co-founder of Founders Fund, has personal investments in Atai Life Sciences, another major player in psychedelic research. Spokespersons from Founders Fund have lent support to decriminalization efforts and have extolled their potential for mental health.

The struggles of psychedelic companies

To date, the VC focus on psychedelics hasn’t proven much of a return on investment. FDA approval of drugs like psilocybin and MDMA is likely years away. The stock price of psychedelic therapy companies has tanked in recent years. In March 2023, Atai Life Sciences noted that it had laid off roughly 30% of its employees. Psilocybin-derivative company Cybin cut 15%.

In 2022 alone, COMPASS Pathways (Nasdaq:CMPS) and ATAI Life Sciences both saw a 66% drop. Cybin (NYSEAMERICAN: CYBN), Numinus Wellness (TSE:NUMI) and Revive Therapeutics (OTCMKTS:RVVTF) faced declines exceeding 70%. MindMed (Nasdaq:MNMD) saw a 90% stock plunge and received a potential Nasdaq delisting notice in June.

This line graph shows the declining performance of three psychedelic companies.

Three of the most notable psychedelic companies, Compass Pathways (NASDAQ: CMPS), MindMed (NASDAQ: MNMD) and Atai Life Sciences (NASDAQ: ATAI), have all seen steep dips in valuation over the past two years.

A 2022 JAMA article foretold the decline. Invoking the Gartner Hype Cycle and the irrational exuberance that can accompany new technologies, authors David B. Yaden, Dr. James B. Potash and Roland R. Griffiths warned of a repeat bout of “blowback” in psychedelic research, similar to what happened in the 1960s.

Neuroplasticity and lasting change

Spravato, an isomer of ketamine, helped kickstart in various psychedelic-inspired drugs now in development consideration, notes Emma Wille, a healthcare analyst at Citeline.

Ketamine, a dissociative anesthetic long used in both human and veterinary medicine, has gained attention since the early 2000s for its rapid-acting antidepressant effects. Its ability to swiftly, although often transiently, relieve depression symptoms, has sparked interest in pairing it with talk therapy.

“The strength of many psychedelics lies in their synergy with talk therapy. It’s believed that the mechanism at work here is neuroplasticity, Wille said. “Administering these drugs places the brain in a state more conducive to reshaping thought patterns. When combined with talk therapy, the results tend to be lasting changes.”

She continues to highlight the regulatory challenges faced by other psychedelics like psilocybin, MDMA, and DMT in the US due to drug scheduling. “Ketamine, in contrast, wasn’t a Schedule I drug. It already had some approved indications. It’s worth noting that ketamine is a dissociative anesthetic. Its off-label use for depression paved the way for trials using it, thereby opening doors for the exploration of other psychedelics in treating depression and related disorders. This delineates a significant difference in the ease of access between ketamine and other psychedelics.”

Numinous experiences as a potential pillar of durability

A significant number of patients undergoing psychedelic experiences report profound spiritual experiences, including long-lasting feelings of interconnectedness. “We need to ensure we’re competently holding space for whatever experiences arise, ensuring that personal biases don’t hinder the patient’s integration process post-experience,” Ryan said.

Such experiences aren’t limited to the devout. “That can actually be really startling for people who don’t identify as religious, especially if they identify as an atheist or agnostic,” Ryan said. “They come in and then come out and say, ‘I think I just felt God. How did that happen?’”

Such experiences are more than anecdotal. They could be a key to psychedelics’ therapeutic potential. A recent systematic review published in Frontiers in Psychiatry looked at the association between psychedelic-induced mystical experiences and therapeutic outcomes across a dozen clinical trials involving psilocybin, ayahuasca or ketamine therapies. The review concluded that 10 out of the 12 studies found a significant correlation between mystical experiences and improved symptoms and quality of life. The study authors, however, noted that sample sizes tended to be small and lack diversity.

Ryan further elaborated on the therapeutic implications of the numinous, “From a psychotherapeutic perspective, this [spiritual dimension] is going to be a place we’re going to have to lean into and make sure  we have the openness and cultural competence around this component. “I’m very interested in seeing how we’ll be tethering in spiritual aspects”