Psychedelic startups are challenging stereotypes to bring hallucinogens into mental health care
LSD, magic mushrooms, MDMA, ketamine, DMT… it’s a suspicious product line for a legitimate company – and psychedelic startups know it. With that in mind, it’s not surprising that the industry is wary of the stereotypes surrounding hallucinogens.
“What the industry really needs is the most boring person in the room presenting the topic,” said Clara Burtenshaw, co-founder of Neo Kuma VenturesEurope’s largest venture capital fund for psychedelic healthcare.
It would be harsh to call Burtenshaw the most boring person in the room, but she’s not the clichéd outing enthusiast. More polished entrepreneur than kaleidoscopic hippie, Burtenshaw was a corporate lawyer before turning to psychedelic health care.
It was an unusual career move with a familiar origin: watching loved ones struggle with their mental health. Burtenshaw thought psychedelics might provide a better cure.
At the end of 2019, she co-founded Neo Kuma (Greek for “New Wave”) to invest in the treatments. Her timing proved prescient. Within weeks, the world was plunged into a mental health epidemic.
In the first year of the COVID-19 outbreak, the global prevalence of anxiety and depression increased by 25%, according to the World Health Organization (WHO). Mental health services, already understaffed and underfunded, were pushed to their limits.
Inevitably an increase ask for medicines followed. But that was only an acceleration of the prevailing trend. In Europe, consumption of antidepressants has more than doubled in the past 20 years.
The medication can be life-saving, but the benefits are not evenly distributed. About one third of patients are resistant on the mood improvements of the treatment. Others may suffer side effectsdependence, or withdrawal symptoms.
“It’s about developing the blockbuster drugs of tomorrow.
As the uptake of antidepressants skyrocketed, some researchers began to argue that this was the case barely better than placebos. a recent research discovered that 10 of the most commonly prescribed drugs made a significant difference in only 15% of patients taking them.
Psychedelic treatments offer an alternative. While conventional antidepressants are taken regularly for extended periods of time, it is common a trip in addition to therapy can have lifelong benefits.
That transformative potential offers great business opportunities. The global mental health market was already appreciated to $380 billion (€356 billion) in 2020. By 2030, it is expected to reach $538 billion (€503 billion).
The chunk that Burtenshaw’s target will come from development of psychedelic drugs — a subsector that Europe is leading.
The continent is home to some of the most important players in space, from Atai Life Sciencesa German startup trialling an MDMA derivative for PTSD, to the UK beckley psyche, who recently received FDA approval to test a compound found in toads as a treatment for alcoholism. The wealth, Burtenshaw hopes, will come after patenting the intellectual property.
“That’s how you see the return on your investment,” she says. “It’s about developing the blockbuster drugs of tomorrow.”
The blockbuster drugs of tomorrow are not ready overnight. The process of developing, testing, licensing and distributing new drugs takes a long time, but the rewards can be huge.
Analysts predict that the psychedelic health care industry will pay off $6.9 billion (€6.4 billion) by 2027. But before the sector reaps the benefits, it must first convince the skeptics.
Once regulators approve a drug, it goes from an illegal substance to a licensed substance medicine. But the route to it psychedelics is long and dangerous. To earn their support, the industry must win clinical arguments.
“Psychedelics attract evangelists who talk about all the great things about the treatment and maybe gloss over the risks,” says Burtenshaw. “But we need to take a data-driven, evidence-based approach to look at these treatments.”
And that evidence base is growing. A growing body of research has shown that psychoactive substances can provide therapeutic breakthroughs for various psychological problems.
In a stud farmj Neo supported, veterans were given controlled doses of MDMA. More than two-thirds (68%) experienced complete remission from PTSD. The remaining 32% felt significant relief.
“That was completely unheard of in psychiatry — we don’t see results like that,” says Burtenshaw. “And many of these patients are veterans who had PTSD really baked in and had some unsuccessful treatments in the past.”
Promising results have also emerged Compass trailsa startup that was listed on the Nasdaq in September 2020. The UK-based company has developed a synthetic form of psilocybin – a psychoactive component in magic mushrooms – for treatment-resistant depression (TRD), which is diagnosed after conventional medicine proves to be ineffective.
A study published last year found that the substance can significantly relieve severe depression. After taking a single 25 mg dose in addition to psychological support, approximately 39% of participants were in remission by week three. Notably, the greatest impact came one day after receiving treatment. Standard antidepressants, on the other hand, take several weeks to reach the maximum effect.
Both treatments are now targeting regulatory review, which would open them up to the market. Burtenshaw believes they can push psychedelic health care more broadly into the mainstream.
“What we’ve seen with psychedelics is this potential for people to really understand the root of their trauma, face it head-on, work with a therapist to come to terms with it, and then move on to their life.,” she says.
like Burtenshaw, Clerkenwell Health CEO Tom McDonald is not the archetypal hallucinogen enthusiast. McDonald spent 10 years in management consulting at big pharma before joining Clerkenwell, a British start-up conducting clinical trials for psychedelic treatments.
The career switch “dcertainly raised eyebrows from friends and family,” says McDonald.
“There is still a lot of stigma, but everyone in the room is trying to normalize it. And data speaks, just like emotional stories.”
Such stories are powerful tools for changing perceptions, but the most effective stories are localized.
In the US, for example, stories of military veterans using psychedelics to overcome trauma have won over skeptics. In the UK, meanwhile, the impact on patients with terminal illnesses has gained more public sympathy. That sympathy could bring the benefits closer to home.
Currently, most European citizens would have to travel abroad to access psychedelic therapies, but there are signs that the regional gap is narrowing.
In the UK, for example, politicians from across the political spectrum are rallying support for the treatment. Last month, Conservative politician Crispin Blunt warned that the regulation of psychedelics in the country was “lagging behind Australia, Canada and the United States”.
Blunt said the drugs “will help address the miserable dependence on too much” of antidepressants. The veteran MP wants psilocybin to be moved from a Schedule 1 drug to a lower-risk Schedule 2, allowing researchers to further explore its potential as a drug.
“Science highlights their enormous potential.
His plea is in line with recent petitions in the EU. Just last week, a cross-party faction of legislators launched a new group to promote access to affordable and safe new therapeutic uses of psychedelics in the bloc.
“Millions of Europeans need better treatment,” said Czech MEP Mikuláš Peksa. “We need to ensure that new psychedelic treatments are considered as the science behind them highlights their enormous potential.”
This immense potential does not only appeal to politicians. Relaxing rules would also create diverse openings for technology – and startups are poised to capitalize.
Europe’s psychedelics startups have already explored extensive digital applications. They range from April 19‘s AI platform for drug discovery and that of Beckley Psychech biomarkers for patient tracking Homecoming app for therapists and golf courses’ personalized music for treatment.
One of their most notable features is their adaptability, which allows their applications to expand beyond psychedelics into the wider health and wellness markets.
With such a wide range of opportunities, the industry has cause for optimism. But startups will have to play the long game and attract patient capital.
“I think the market landscape is going to look so different in five years from now,” says Burtenshaw. “What we expect to see is this merging of destigmatization alongside a rollout of these treatments.”
However, the road to market seems long and treacherous. Regulatory barriers, a dangerous financial landscape and slow paths to profit have dampened the excitement around psychedelics. But in the crucial battle for hearts and minds, the prospects of victory grow.
