Investment in psychedelic drugs started booming in 2020. The lockdowns brought by the Covid-19 pandemic highlighted the importance of mental health, and the legalization of psychoactive compounds is progressively spreading worldwide.
A key milestone was the FDA decision in 2020 to fast-track and award breakthrough designation to a depression treatment based on psilocybin from Compass Pathways, which is currently the largest public company specializing in psychedelic drug development.
Since then, funds have been pouring into the field, and multiple VCs specializing in psychedelic medicine have been launched, such as PsyMed Ventures, Satori Neuro and Negev Capital. Simultaneously, many psychedelics developers have successfully listed on public markets, with major names including Compass Pathways, GH Research, Atai Life Sciences, Cybin and MindMed.
While investment in psychedelic therapeutics slowed down last year, it picked up again in 2024 as psychedelic drugs progress through clinical trials and receive approval. These are the top startups that have been actively raising funds and closing deals in 2024 so far.
Reunion Neuroscience
Headquarters: Morristown, New Jersey, US
Founded: 2022
Reunion Neuroscience is a spin-off company of Field Trip Health, a startup that ran a chain of clinics offering ketamine assisted therapy to treat depression, anxiety and PTSD across Canada and the US. In 2022, the company split its drug discovery and clinic management activities into two new entities; Reunion was created as the successor of the drug discovery division, which worked on the development of next-generation psychedelics.
The company is developing psychedelic drugs that are structurally similar to classical psychedelics but have a shorter duration. These drugs target the serotonin 2A receptor (5HT2AR), which is a known target responsible for the antidepressant effects of psychedelics.
In May 2024, Reunion Neuroscience raised $103 million in a series A fundraising led by MPM BioImpact and Novo Holdings. The funds are being used to support an ongoing phase 2 trial with Reunion’s lead candidate, RE104, in patients with postpartum depression.
RE104 is a compound similar to psilocybin. In a phase 1 clinical trial, it was shown to be safe and well-tolerated, and to have a duration of three to four hours, shorter than the six to eight hours typical of psilocybin. In addition to the clinical program in postpartum depression, Reunion is planning to explore the potential of RE104 as a treatment for adjustment disorder in patients diagnosed with cancer.
Lykos Therapeutics
Headquarters: San Jose, California, US
Founded: 2014
Lykos Therapeutics is a spin out of the Multidisciplinary Association for Psychedelic Studies (MAPS), a non-profit organization that supports psychedelic science. The company was founded with the goal of bringing MDMA-assisted therapy through to FDA approval and commercialization.
Midomafetamine (MDMA) is an entactogen, a class of psychoactive compounds that have known effects of increasing self-awareness and introspection. MDMA-assisted therapy consists of a combination of MDMA capsules and psychological intervention, including talk therapy.
In January 2024, Lykos closed a $100 million series A financing round led by Helena. Along with the fundraising, the company announced the change of its name from MAPS PBC to Lykos Therapeutics. The new name references the Greek word for wolf to represent the company’s qualities.
Lykos Therapeutics has filed an application with the FDA for the approval of MDMA-assisted therapy as a treatment for PTSD, based on data from two phase 3 trials. If approved, it would be the first psychedelic-assisted therapy approved for this condition.
A decision from the FDA is expected as early as August, which would allow Lykos to launch the treatment in late 2024. In the meantime, the company has been using the funds from the series A fundraising to build a commercialization wing.
Beckley Psytech
Headquarters: Oxford, UK
Founded: 2019
Beckley Psytech was founded by Amanda Feilding and her son Cosmo Feilding Mellen, who is the company’s CEO. Feilding has dedicated over 50 years to the scientific exploration of the therapeutic potential of psychedelics, and is responsible for setting up the Beckley Foundation in 1998 as a non-profit organization focused on psychedelic research.
Beckley Psytech was created to build upon the work of the Beckley Foundation by developing psychedelic medicines that could be integrated into mainstream medical practice to treat psychiatric and neurological conditions.
In January 2024, Beckley Psytech announced a $50 million strategic investment from atai Life Sciences, one of the largest players in the field of psychedelics development. The purpose of the investment was to accelerate the development of Beckley Psytech’s two clinical stage candidates.
The company’s lead candidate, BPL-003, is an intranasal formulation of 5-MeO-DMT, a psychedelic compound that is known for eliciting strong effects within a short time frame of about 20 minutes on average. BPL-003 is currently in phase 2 trials for treatment resistant depression and alcohol use disorder. 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 a startup developing innovative treatment options for people suffering from mental illness. The company’s drug discovery efforts focus on new chemical entities that capture the therapeutic benefits of psychedelics with improved safety, tolerability, duration and efficacy.
In May 2024, Gilgamesh signed a collaboration agreement with AbbVie consisting of a $65 million upfront payment and up to $1.95 billion in option fees and milestones. In exchange, AbbVie obtained the option to license, develop and commercialize novel neuroplastogens. These are next-generation psychedelic compounds that minimize the challenging effects of classic psychedelics, such as hallucinations, while retaining their clinical benefits.
Gilgamesh’s drug discovery platform uses machine learning technology to accelerate and optimize the development of novel drugs using data from complex behavioral assessments, advanced electrophysiology and molecular measures of neuroplasticity. The company’s two lead clinical programs, GM-1020 and GM-2505, are currently being tested in phase 2 trials as treatments for patients with major depressive disorder.
The company received a $14 million grant from the National Institute on Drug Abuse (NIDA) in March 2024. The funds will go towards the development of GM-3009, an analog of the psychedelic drug ibogaine, for the treatment of substance use disorders. With this candidate, Gilgamesh aims to mitigate the cardiovascular risks associated with ibogaine while potentially increasing its efficacy.
Seaport Therapeutics
Headquarters: Boston, Massachusetts, US
Founded: 2024
Seaport Therapeutics is a spin-off of PureTech Health, a Boston-based biotechnology company with a history of highly successful spinouts such as Karuna Therapeutics, which was acquired by Bristol Myers Squibb for $14 billion earlier this year.
Seaport was launched in April 2024 with a $100 million series A round from investors including ARCH Venture Partners, Sofinnova Investments and Third Rock Ventures. PureTech and Karuna founder Daphne Zohar stepped down as CEO of PureTech to lead Seaport Therapeutics when the launch was announced.
Seaport’s Glyph technology platform leverages the lymphatic system to create new medicines for depression, anxiety and other neuropsychiatric disorders based on clinically validated mechanisms of action. The platform is designed to enable and enhance oral bioavailability, reduce hepatotoxicity and other side effects in drugs that were previously held back by those limitations.
The company’s lead candidate, SPT-300, is currently in phase 2 clinical trials. The candidate is an oral prodrug of allopregnanolone, a compound that has demonstrated therapeutic benefit in a range of neuropsychiatric conditions but is currently only approved as an intravenous infusion.
Seaport is also developing SPT-348, a prodrug of a non-hallucinogenic neuroplastogen that is intended to treat mood disorders and other neuropsychiatric conditions. For this program, the company leveraged its platform to create a potential first-in-class treatment with improved pharmacokinetics and tolerability compared to conventional psychedelics.
