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Psychedelic drug order boosts investor interest

Companies hoping for funds, faster reviews

By: Kamal Choudhury
and Christy Senthost
Reuters

..... President Donald Trump's executive order to accelerate psychedelic drug development has raised hopes among companies developing the drugs hat it could help attract more capital, but researches cautioned hat new treatments are still a lone way off.
..... Nine executives and investors interview by Reuters said the order could shorten administrative timelines and improve coordination between the Food and Drug administration and the Drug Enforcement Administration.
..... Several companies said new funds are still just a hope, but Joseph Tucker, CEO of psychedelic drug developer Enveric Bioscience, told Reuters the company raised $5 million when the news of the Trump order emerged.
..... Dane Stevens, CEO of Optimi Health, said his company field many calls almost immediately after the order, as potential investors sought to better understand the sector.
..... "When there's things that happen from executive orders, the phone rings," Stevens said.
..... But seven researches working to find the medical benefits of the drugs said any new treatment first requires costly time-consuming research, and that most psychedelic drugs are still in the early stages of development and are a long way from hitting the market.
..... "I'm cautiously optimistic, but I'm not throwing a funding party yet," said researcher Gul Dolen, a professor at the University of California, Berkley, whose work explores how psychedelics may reopen "critical periods" - windows of heightened brain plasticity that make it easier to relearn behaviors and process trauma.
,,,,, the FDA highlighted slow development timelines and difficult trail designs in its 2024 decision to decline approval of Lykos therapeutics; MDMA-assisted therapy for PTSD.
...... A sign the FDA is shifting gears came in April [2026] when it granted expedited review to three companies - compass Pathways, Usona Institute and Transcend Therapeutics - all studying psychedelic treatments for mental health conditions.

Investors see lower risk

..... Sa'ad Shah, confounder of Noetic Fund, a venture fund with investments in psychedelic companies, including Compass Pathways, definite Therapeutics and AtaiBeckley's aiid the sector has historically attracted capital from family offices and high-net-worth individuals.
..... Now, he hopes the executive order will bring institutional investors such as sovereign wealth funds and public pension plans to the sector by reducing the regulatory uncertainty that had kept them on the sidelines and showing that it has credible government backing.
..... Shah and Sri Teja Mullapudi, Noetic's scientific lead, said faster FDA engagement could save clinical-stage companies "tens of millions of dollars" by compressing some review timelines from 10 to 12 months to as little as one or two months.
..... Still, investors said the benefits will not be evenly distributed. Late-stage development with breakthrough therapy designation or pivotal data are likely to benefit first form expedited reviews or priority vouchers.
..... For earlier-state companies, the effect is "more fuzzy" but still positive because more investors may now consider psychedelics and invest able category, said Matias Serebrinsky, co-founder of investment firm PsyMed Ventures.

Companies see faster path

..... Robert Barrow, CEO of Definium therapeutics, which is developing an LSD-based therapy for generalized anxiety disorder, said faster regulatory processes could improve efficiency and reduce waste.
..... The order's instruction that the FDA begin work on scheduling controlled substances after late-stage data are available, rather than waiting until after the FDA approval, in particular, could help, he said.
..... The DEA assigns drugs to schedules that determine how tightly they are controlled and whether they can be prescribed. Authorities recently moved to reclassify cannabis to ease research and investment hurdles, for example.
..... Srinivas Rao, CEO of AtaiBeckley, said the order's emphasis on improving communications between the FDA and the DEA on clinical protocols and site approvals could shave "several quarters" from development timelines.
..... AtaiBeckley is developing BPL-003, an intranasal formulation of 5-MeO-DMT for treatment-resistant depression.

Funding, coverage concerns tamper optimism

..... Funding such treatment has been difficult, some researchers told Reuters, because of he government's historical stance against the use of psychedelic drugs.
..... Removing the regulatory hurdles cracks open the door for more independent study, they said.
..... PsyMed's Serbrinsky said the executive order may speed up reviews, but does not provide clarity on insurance reimbursement hurdles for psychedelic therapies.
..... "Who;s going to pay for it?" Serebrinsky said. "That is an unanswered question, and the EO sort of does not give us full answers."
..... Clinical experts cautioned hat enthusiasm should not obscure the risks, especially around ibogaine, a powerful psychedelic derived from the African iboga plant that featured prominently in the political push by Trump.

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