Psychedelic drugs are taking the pharma world by storm. Just a few years ago, few people expected these compounds to become key players in mental health treatment. But here we are in 2024, and psychedelics are gaining serious traction.

Investment in psychedelic drugs skyrocketed around 2020, spurred by the COVID-19 pandemic which highlighted the pressing need for mental health solutions. Big moves like the FDA’s fast-tracking of a psilocybin-based depression treatment by Compass Pathways opened the floodgates. Since then, venture capital has been flowing in, and specialized firms like PsyMed Ventures, Satori Neuro, and Negev Capital have emerged.

After a slowdown last year, investments in psychedelic treatments are on the rise again. Let’s take a closer look at some of the hottest startups shaking things up in 2024.

Reunion Neuroscience

Headquarters: Morristown, New Jersey, US

Founded: 2022

Reunion Neuroscience is a spin-off from Field Trip Health, which was big in ketamine therapy for conditions like depression and PTSD. They split in 2022, forming Reunion to focus on new psychedelics. These drugs target the serotonin 2A receptor (5HT2AR), a key player in the antidepressant effects of psychedelics. Reunion raised $103 million in May 2024 to fund phase 2 trials for RE104, targeting postpartum depression. RE104 is similar to psilocybin but lasts three to four hours instead of six to eight.

According to Outsourcing-Pharma, “These drugs target the serotonin 2A receptor (5HT2AR), which is a known target responsible for the antidepressant effects of psychedelics.”

Outsourcing-Pharma reports, “The funds are being used to support an ongoing phase 2 trial with Reunion’s lead candidate, RE104, in patients with postpartum depression.”

Reunion is also exploring RE104 for treating adjustment disorder in cancer patients.

Lykos Therapeutics

Headquarters: San Jose, California, US

Founded: 2014

Lykos spun out from the Multidisciplinary Association for Psychedelic Studies (MAPS) to push MDMA-assisted therapy to the mainstream. MDMA, known for boosting self-awareness and introspection, could revolutionize PTSD treatment. In January 2024, Lykos raised $100 million and changed its name from MAPS PBC to Lykos Therapeutics. The new name comes from the Greek word for wolf, symbolizing the company's qualities.

“Midomafetamine (MDMA) is an entactogen, a class of psychoactive compounds that have known effects of increasing self-awareness and introspection,” states Outsourcing-Pharma.

Lykos is awaiting FDA approval for MDMA therapy for PTSD and expects a decision by August. They’re using the funds to build a commercialization team to hit the ground running once approval comes in.

Beckley Psytech

Headquarters: Oxford, UK

Founded: 2019

Beckley Psytech aims to meld psychedelic science with mainstream medicine. Founded by Amanda Feilding and her son Cosmo, the company is advancing psychedelic treatments for psychiatric conditions. This year, they received a $50 million investment from atai Life Sciences to fast-track their lead candidate, BPL-003. This intranasal 5-MeO-DMT formulation kicks in within 20 minutes and is in phase 2 trials for depression and alcohol use disorder.

Outsourcing-Pharma mentions, “Results from a previous phase 2a study have shown that a single dose of the drug candidate was able to induce an antidepressant response in 55% of patients.”

Gilgamesh Pharmaceuticals

Headquarters: New York, US

Founded: 2019

Gilgamesh Pharmaceuticals is focused on next-gen psychedelics that offer therapeutic benefits without intense side effects like hallucinations. In May 2024, Gilgamesh inked a deal with AbbVie worth up to $2 billion, allowing AbbVie to license and develop their neuroplastogens. These new compounds aim to minimize psychedelic drawbacks while retaining clinical benefits. Their top candidates for depression are moving through phase 2 trials.

“In exchange, AbbVie obtained the option to license, develop and commercialize novel neuroplastogens,” notes Outsourcing-Pharma.

“These are next-generation psychedelic compounds that minimize the challenging effects of classic psychedelics, such as hallucinations, while retaining their clinical benefits,” states Outsourcing-Pharma.

With an additional $14 million grant from NIDA, Gilgamesh is developing GM-3009 for substance use disorders, hoping to sidestep the risks of traditional ibogaine treatments.

Seaport Therapeutics

Headquarters: Boston, Massachusetts, US

Founded: 2024

Debuting in April 2024, Seaport Therapeutics is a spin-off from PureTech Health. They raised $100 million to develop new medicines for depression and anxiety. Using their Glyph technology, they aim to improve drug bioavailability and reduce side effects. Their lead candidate, SPT-300, an oral prodrug of allopregnanolone, is in phase 2 trials. Another candidate, SPT-348, a non-hallucinogenic neuroplastogen, promises treatment for mood disorders.

These startups are leading the charge in making psychedelics a mainstream option for mental health treatment. With major investments and promising clinical trials, the future looks bright for innovative therapies based on these once-controversial compounds.