Psychedelics show promise for patients — and investors
Magic mushrooms and other psychedelic substances are showing enormous potential in treating depression, post-traumatic stress disorder, anxiety and addiction, creating an opportunity for investors to make huge profits off startup companies.
Researchers, scientists and venture capitalists discussed what could be the most significant breakthrough in psychiatric medicine in 40 years at a series of panels at the SXSW Conference and Festivals this week in Austin. Investor interest in the psychedelics industry is reemerging after company valuations dropped a year ago.
The Food and Drug Administration first granted psilocybin, the active ingredient in hallucinogenic mushrooms, breakthrough therapy status in 2018, along with MDMA, another psychedelic drug. Today, researchers are conducting 137 trials using psychedelic substances with positive results.
Oregon legalized medical psilocybin this year, and Colorado has decriminalized possession of psychedelics, reducing the charge to a ticket. A half-dozen states, including Texas, are considering authorizing the medical use of psychedelics.
Former Gov. Rick Perry lobbied the Legislature in 2021 to allow therapists to administer psychedelics to people with PTSD. The state authorized clinical trials at Houston’s Baylor College of Medicine and the Veterans Affairs Medical Center.
Existing psychiatric drugs often cause severe side effects and are frequently ineffective. Pharmaceutical companies have not developed a new class of medications for mental illness in 40 years. Initial studies show many psychedelics, in
cluding ketamine and LSD, have beneficial effects when combined with talk therapy for a range of conditions.
The race is on to refine the psychedelics into medications that provide precise effects on patients, said Dr. Jeffrey Becker, a psychiatrist and researcher. He founded Bexson Biomedical, which is developing technology to administer psychedelics to treat opioid addiction.
“The delivery of these molecules to the target tissue at the dose that you want in the time frame that you want; that’s what I mean by precision, and that’s not possible with all of the current models that are out there,” he said.
Another area of research is how to use psychedelics. For treating PTSD and depression, therapists have found that large amounts supplied in a controlled setting during a few sessions a year are effective. The technique is called macrodosing.
Individuals struggling with anxiety and addiction, though, have found relief from microdosing. They take a small, almost imperceptible dose daily instead of drugs like Prozac.
Brandon Goode developed an app called Houston that helps people determine the right microdose. Why is it called Houston? Because it is a guide to “inner space.”
“I kept hearing that people were microdosing to get off antidepressants,” he said. “The fact that fairly normal people are going onto Instagram to a random brand asking about microdosing a currently illegal substance, that sounded like a gap in health care to me.”
Venture capitalists understand the size of the current psychiatric medicine market and the potential value of new therapies. They invested more than $330 million into psychedelic startups between July 2020 and July 2022, according to Crunchbase, which tracks early-stage investments.
When the FDA authorized psychedelic research in 2018, irrational exuberance led to massive overvaluations of psychedelic startups and a predictable price collapse a few years later. But Daniel Goldberg, co-founder of Palo Santo, a psychedelic investment fund, said the industry is past the hype cycle.
“The promise of psychedelics is more promising than ever, and the cultural movement is more exciting than ever,” he said. “I think it might be like internet 1.0 and internet 2.0.”
All the excitement of creating a new line of pharmaceuticals with billions in potential sales does not sit well with many psychedelic pioneers or the communities that use them in ancient rituals.
Many worry about companies medicalizing and patenting substances from plants their communities have gathered and used to improve mental health for generations.
Activists want federal and state governments to legalize the plants. While psychedelics are mindaltering, they are not addictive or more dangerous than many legal substances.
Illicit producers are far ahead of the curve, just as they were with marijuana before it became legal for recreational use in 21 states.
California-based PolkaDot Magic Mushroom Belgian Chocolate distributes psilocybin to underground stores nationwide with professional manufacturing and branding. Other psychedelics are available in gummy form, like marijuana products.
No one thinks psychedelics are a cure-all that can solve everyone’s mental health issues. But scientists and citizens desperate for relief have evidence they can help.
Chris Tomlinson, named 2021 columnist of the year by the Texas Managing Editors, writes commentary about money, politics and life in Texas. Sign up for his “Tomlinson’s Take” newsletter at HoustonChronicle. com/TomlinsonNewsletter or Expressnews.com/ TomlinsonNewsletter. twitter.com/cltomlinson ctomlinson@hearstcorp.com