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Psychedelic medicine companies experienced a major setback during premarket trading on Wednesday after an advisory panel of experts advised the FDA against approving MDMA, commonly known as ecstasy or molly, for the treatment of post-traumatic stress disorder (PTSD). The panel expressed concerns that the available evidence does not show the drug to be effective or that its benefits outweigh the risks. While the final decision by the FDA is still pending, the advice from the expert panel has caused a significant blow to companies and clinicians in the U.S. who are hoping to explore the therapeutic potential of psychedelics.
One of the companies impacted by this setback is Lykos Therapeutics, the sponsor of the MDMA therapy. The California-based company, registered as a public benefit corporation, is now facing challenges in getting its product approved for PTSD treatment. The negative news also affected investor confidence in a range of publicly traded companies that are working on psychedelic medicines. Top firms like Mind Medicine, Atai Life Sciences, Cybin, and Compass Pathways all saw their shares drop between 10% and 15% during premarket trading.
Apart from the major players in the psychedelics industry, other companies like Relmada Therapeutics and GH Research also experienced a decline in their stock prices. However, one notable exception was Seelos Therapeutics, which focuses on using psychedelics to treat neurological diseases. Its shares were up nearly 2% during premarket trading, highlighting the unpredictable nature of the stock market for smaller firms in this sector. Despite the setbacks, many experts see the potential of psychedelics in treating mental health conditions like depression, anxiety, and addiction, and are keen to explore their therapeutic benefits further.
Psychedelics, including MDMA, LSD, and psilocybin, are classified as illegal substances in many parts of the world. However, there is growing interest among researchers and clinicians in using these drugs for medical purposes. The potential of psychedelic therapies to address mental health conditions that are difficult to treat with conventional medications has garnered attention from the medical community. Lykos’ MDMA therapy, if approved, would be the first such treatment in the U.S. and represents a significant milestone in the field of psychedelic medicine. While some clinical trials have shown positive results in reducing symptoms of PTSD with MDMA, there are concerns about potential risks associated with the drug, such as cardiovascular issues and study design shortcomings.
The advice from the FDA’s expert panel against approving MDMA for PTSD treatment has raised questions about the future of psychedelic medicines in the U.S. The setback is not only affecting individual companies but also the overall confidence in the industry as a whole. Despite the challenges, there remains optimism among researchers and clinicians about the therapeutic potential of psychedelics. Companies like Seelos Therapeutics are still seeing positive trends in their stock prices, indicating that there is still interest and investment in exploring the use of psychedelics for medical purposes. As the field continues to evolve, it will be crucial to navigate the regulatory landscape and address concerns about the safety and efficacy of these unconventional treatments.
