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Drug Development

Drug companies are investing big in psychedelics, but can they engineer out the trip?

Eliminating hallucinations is key to turning psychedelics into mental health treatments that can be used widely, some say. Others argue that it’s impossible to decouple the mystical experience from the therapeutic effects

by Bethany Halford
March 6, 2022 | A version of this story appeared in Volume 100, Issue 9
Colorful streaks that suggest the hallucinogenic effects of psychedelic compounds burst from the middle one of five test tubes.

Credit: Will Ludwig/C&EN


In brief

Over the past decade, psychedelic compounds like psilocybin and ecstasy have emerged as potentially life-changing treatments for mental illnesses, including major depressive disorder and posttraumatic stress disorder. Read on to learn how some companies are trying to bring these once-demonized drugs to market and how others are hoping to use chemistry to eliminate their hallucinogenic effects—a proposition many in the field find controversial.

Ancient civilizations revered them as spiritual guides. Counterculture embraced them for their ability to change consciousness. Governments demonized them as psychosis-inducing scourges. Now, after being disregarded for decades as too politically charged for serious scientific study, psychedelic compounds are poised to enter the mainstream of modern medicine as treatments for intractable mental illness. What a long, strange trip it’s been.

Psychiatrists and companies are hailing psychedelic drugs like psilocybin, LSD, and 3,4-methylenedioxymethamphetamine (MDMA), along with nonpsychedelic mind-altering drugs like ketamine, as the next breakthrough in treating mental illness. Studies have shown that people with difficult-to-treat diseases like major depressive disorder­—including treatment-resistant depression­— posttraumatic stress disorder (PTSD), and substance use disorder, in addition to end-of-life existential distress can benefit from these drugs when other therapies have failed.

“There is definitely an unmet medical need for a lot of psychiatric illnesses,” says Kripa Krishnan, a senior analytical consultant at Informa Pharma Intelligence, a data and market information firm. “There’s a huge demand,” she says. People with mental illness “need something that is different. They need something that is impactful in the short run.”

Psychiatrists aren’t alone in being turned on to the potential of psychedelics. The drug industry is tuning in too: more than 80 companies are devoted to developing or administering psychedelic compounds, according to the business information platform Crunchbase. Investors expect demand for psychedelic therapies to mushroom in the coming years.

Chemical structure of ketamine.

Some firms are betting on first­-generation psychedelic compounds like psilocybin, which is the psychoactive component of hallucinogenic mushrooms, and MDMA, also known as ecstasy. Others wonder if they can use information they’ve gleaned from scientific studies of the receptors where these molecules bind to improve them by dialing down certain drugs’ negative properties, like cardiac side effects and propensity for heavy use.

Some companies are even hoping to make molecules that drop out the hallucinogenic effects entirely while retaining features responsible for therapeutic benefits. But many scientists say that the psychedelic trip brings about a change in perspective that’s critical for treating mental illness.

Turn on

The current surge in psychedelics’ popularity began with studies from the mid-2010s. Separate research groups at the University of California, Los Angeles, Johns Hopkins University, New York University, Imperial College London, and the University of Zurich found fast and lasting effects using psychedelics, particularly psilocybin, to treat small groups of people with treatment-resistant depression and existential distress­—a term doctors use to describe the psychological turmoil people may feel when they face death.

Chemical structures of psilocybin and psilocin.

Those results broke the model for typical drug therapies for these problems, says Fred Barrett, a cognitive neuroscientist at the Johns Hopkins Center for Psychedelic and Consciousness Research and coauthor on several of the studies. Patients could see lasting effects after just one or two psychedelic treatments, which are given under controlled conditions in combination with intensive psychotherapy.

The results are quite different from what current pharmaceutical treatments achieve, Barrett says. To treat a disease like major depressive disorder, doctors typically prescribe a drug like Prozac, a selective serotonin reuptake inhibitor (SSRI). It can take up to 6 weeks to even tell if the drug is working, and if it’s not, the person has to taper off the drug and try a different SSRI.

Chemical structure of LSD.

“There are plenty of people who wouldn’t be here if it weren’t for SSRIs,” Barrett says. “But there are also a lot of people who are on SSRIs and who are still suffering, not only from not seeing the full treatment response but also increased weight gain, lack of libido, sleep problems.” If psychedelics quickly produce durable results in people without those side effects, Barrett says, “that really changes the entire model on how we approach and treat psychiatric disorders.”

Chemical structures of MDMA, 5-MAPBT, and 6-MAPBT.

Even so, Barrett says, psychedelics aren’t miracle drugs. Their ability to impart neuroplasticity—to reorganize connections in the brain’s synapses—has led some to suggest psychedelics could be treatments for eating disorders, cluster headaches, and Alzheimer’s disease. “I think there has to be a little bit of tempering of enthusiasm here. We really need to be careful not to begin to treat these things as a panacea,” he says.

The first US company to be rewarded for trying to legitimize a mind-altering drug was Johnson & Johnson’s Janssen Pharmaceuticals, which in 2019 won US Food and Drug Administration approval for Spravato for treatment-resistant depression. Spravato is a nasal spray that contains the S enantiomer of ketamine, an anesthetic and party drug also known as Special K. People who take Spravato self-administer the nasal spray in a doctor’s office or medical clinic and then stay for supervision for a couple of hours. People typically get two treatments per week for 4 weeks and also take an antidepressant.

Follow the money

Investors and venture capitalists are pouring money into psychedelics companies. Here are snapshots of several.

Publicly traded companies

GH Research
Location: Dublin
Niche:N,N-Dimethyltryptamine derivatives for treatment-resistant depression
Market capitalization: $870 million

Atai Life Sciences
Location: Berlin
Niche: Incubator for companies developing psychedelic mental health treatments
Market capitalization: $851 million

Mind Medicine
Location: New York City
Niche: Microdose and psychedelic-inspired medicines
Market capitalization: $628 million

Compass Pathways
Location: London
Niche: Comp360 psilocybin therapy
Market capitalization: $537 million

Location: Toronto
Niche: Drug delivery of psychedelic compounds
Market capitalization: $163 million

Venture capital–backed firms

Delix Therapeutics
Location: Boston
Niche: Novel compounds based on psychedelics
Funding raised: $118 million

Beckley Psytech
Location: Oxford, England
Niche: Psychedelics for neurological and psychiatric disorders
Funding raised: $114 million

Gilgamesh Pharmaceuticals
Location: New York City
Niche: Novel psychedelic compounds from an artificial intelligence platform
Funding raised: $29.6 million

Multidisciplinary Association for Psychedelic Studies
Location: San Jose, California
Niche: Nonprofit developing psychedelics and marijuana
Funding raised: $13.0 million

Sources: Market capitalization data from Yahoo Finance on Feb. 23, 2022. Funding data from Crunchbase.

“It’s a pain to get done, but I went from being chronically unemployed to holding a job for over a year now,” one Spravato clinical trial participant wrote in Time in 2019. “If the treatment wasn’t working, I would have a harder time keeping the job. I can definitely tell when I need to get another dose soon. I’m a little more edgy, or a little thoughtless in some of the things that I say. I am sadder, a little less content.”

Ketamine isn’t technically a psychedelic compound, but the approval lent credibility to the idea of using what is considered an illicit substance to treat intractable mental illness. The treatment was heralded as a breakthrough in a field that hadn’t seen innovation since the SSRIs of the 1980s.

And last year, researchers from the Multidisciplinary Association for Psychedelic Studies (MAPS) and several other institutions published the results of a Phase 3 clinical trial in which people with PTSD took three doses of MDMA 4 weeks apart, accompanied by psychotherapy. They showed sustained improvement 2 months after the treatment compared with people who took a placebo.

“Those results are astounding,” says Bryan Roth, an MD and PhD who studies the pharmacology of psychoactive substances at the University of North Carolina at Chapel Hill and was not involved in the trial. Roth works as a research scientist now, but he used to practice psychiatry. When he was a psychiatry resident in the late 1980s and early 1990s, Roth says, he saw many people with PTSD.

“They were mainly military veterans, and their lives were a living hell,” he says. “There was nothing we could offer them that did much of anything.” Even if MDMA is only partially effective when larger trials are conducted, Roth says, the results will still be “a huge advance for psychiatry.”

Many people are taking psychoactive compounds as self-medication anyway, says Tyra Callaway, vice president of process chemistry and formulations at Mimosa Therapeutics, a company working with psychedelic fungi and botanicals. “If these are to be interesting tools of therapy, they need to be more widely studied.” She says the regimented science that has sprung up around psychedelic therapies over the past decade has brought them closer to the mainstream.

“The success with cannabis and the success MAPS have had with MDMA demonstrated that there is a path for these drugs that society has kind of demonized and written off,” says Jason Wallach, a professor who studies psychoactive compounds at the University of the Sciences in Philadelphia. He is also leading a group developing novel molecules for Compass Pathways, a mental-health-care company. “If you do good science, you can change people’s perspective,” he says.

Steven J. Zalcman, a branch chief at the National Institute of Mental Health, a division of the US National Institutes of Health, acknowledges that the current medicinal options for many mental illnesses are only moderately successful. “We would like to be able to do a whole lot better,” he says. But studies with psychedelics don’t necessarily show a clear therapeutic benefit, Zalcman says. “From the NIH’s point of view, the rigor underlying those trials has not really been sufficient to justify that sort of conclusion.”

One major problem is that it’s tough to conduct a truly double-blind clinical trial with a psychedelic drug. “If I give you a dose of psilocybin, the chances are you know you’ve received a dose of psilocybin,” says Aidan Hampson, a senior adviser at the NIH’s National Institute on Drug Abuse. “If I give you a sugar pill and call it psilocybin, you’ll know it’s a sugar pill.” So the question arises: Are people truly seeing therapeutic benefits, or do they just think they are because they know they received the active drug?

Another problem with clinical trials of psychedelics, Hampson says, is that so far they’ve had strict criteria regarding who can participate. For example, they exclude people with bipolar disorder, who might be vulnerable to having a psychotic episode after taking a psychedelic.

“Those people are going to be exposed to such a drug if and when it gets on the market,” Hampson says. “We need to be including people in those vulnerable populations in the clinical trials that we do now, where we can assess how safe they are for those populations.”

Tune in

Even with such hurdles, many companies are developing their own versions of psychedelic compounds like psilocybin. Late last year, Compass Pathways reported results from its Phase 2b clinical trial of Comp360—a patented polymorph of psilocybin that the FDA designated a breakthrough therapy, thereby speeding its development and review. It was the largest trial of the psychedelic compound reported to date.

Chemical structure of DMT.

The study of 233 people with treatment-resistant depression measured depressive symptoms 3 weeks after treatment with Comp360. More people who took a 25 mg dose reported improvement than those who took a 10 mg dose or a 1 mg dose. Roughly 25% of the people in the 25 mg dose arm of the trial reported sustained improvement 12 weeks later. All the trial’s participants had psychotherapy. Compass Pathways plans to conduct a Phase 3 study later this year.

Even with the early success of Comp360 and MDMA-assisted psychotherapy, many wonder if this treatment approach can be scaled to address the extremely high occurrence of these illnesses.

Comp360’s psychedelic effects are long lasting, says Srinivas Rao, chief scientific officer of Atai Life Sciences, a mental health drug company that owns a 21% stake in Compass Pathways. Those long-lasting effects mean that someone on the therapy will spend an entire day tripping in a doctor’s office and away from work or other responsibilities, Rao says. And some skeptics wonder if psychedelic therapies will be accessible to people who aren’t located near major urban centers.

Chemical structures of ibogaine, tabernanthalog, and oxanoribogaine.

The treatments can also be expensive. Estimates of the costs of MDMA-assisted PTSD psychotherapy range from $4,000 to $20,000 per patient; more than 90% of that is to compensate the therapists. Proponents argue that if the effects are long lasting, the treatment might be more cost effective than a lifetime of conventional drug therapy, but it’s not clear if insurance companies will pay the large, up-front cost.

Scalability is “a work in progress that we’ll need to get to as we realize the potential of Comp360,” says Gary Gilmour, Compass Pathways’ vice president of preclinical research. “This is really a different type of treatment approach that I guess all stakeholders are going to have to get their heads around.”

Shlomi Raz, CEO of the psychedelics company Eleusis, has been thinking about how to bring psychedelic therapies into mainstream medicine. “How do you make it convenient? How do you make it controllable, broadly accessible, and most importantly, affordable?” he asks.

Eleusis hopes to accomplish these goals by creating an infusion of psilocin—the active form of psilocybin. Bypassing the gut by delivering the psychedelic via infusion should theoretically produce faster, less-variable results, he says. “The total amount of time in the clinic looks a lot more like a dentist appointment than it does a surgery,” Raz says. Eleusis has developed a stable salt of psilocin that it plans to study in a Phase 1 trial within the next year.

Exploring and expanding pharmacological space—that’s what chemists do.
Dalibor Sames, chemistry professor, Columbia University, and cofounder, Gilgamesh Pharmaceuticals

Viridia Life Sciences, another company under the Atai umbrella, is developing N,N-dimethyltryptamine (DMT), a psychedelic compound found in the hallucinogenic drink ayahuasca. Ayahuasca drinkers experience a trip that lasts hours, but an injection of DMT on its own can produce a faster psychedelic experience—as short as 15 min. DMT can’t be given orally because stripped from the compounds in ayahuasca that prevent its oxidation in the gut, DMT gets metabolized too quickly to elicit an effect.

Rao says Viridia is working on new DMT formulations and hopes to develop a framework like Spravato, the ketamine nasal spray, which patients take during a 2 h visit to the doctor.

Drop out

Even if companies succeed in reformulating psychedelics into effective drugs, these compounds will still face the cultural stigma often associated with them. “From a doctor’s standpoint, will they have the readiness to adopt these psychedelics and actually prescribe them to patients? Are patients willing to accept them?” Informa’s Krishnan asks.

Chemical structures of IHCH-7079 and IHCH-7086.

“There’s a whole cultural barrier that you have to break,” she says. “It’s so strongly ingrained in so many people that it’s illegal, it’s unsafe. To transform that mindset, you definitely need a paradigm shift.”

One route many companies are now taking to sidestep that taboo is to develop molecules that are inspired by psychedelics but that have better properties—whether they are faster acting, are safer, or eliminate the hallucinogenic trip entirely. “New chemical entities can obviously address a lot of the underlying deficits” of psychedelics, Rao says. “They can also get away from some of the emotional baggage of these compounds.”

Doctors know that psychedelics reach the brain and elicit an effect—something that’s hard to achieve when a molecule is designed from scratch. The idea is to start with these compounds, “and then just tweak their structures just a little bit, to make them better versions of themselves,” says David E. Olson, who studies chemical neuroscience at the University of California, Davis.

Of course, creating a good drug is always a struggle in medicinal chemistry, but it’s even tougher for central nervous system drugs, which must cross the blood-brain barrier. To do that, Olson says, molecules typically need to be small and nonpolar, with very few hydrogen-bond donors or acceptors. “Thinking about those constraints and still being able to produce the kinds of molecules that have the desired pharmacodynamic and pharmacokinetic properties takes an incredible amount of creativity,” he says.

Olson is also a cofounder of Delix Therapeutics, which is developing novel compounds aimed at promoting neuroplasticity. The company is pursuing analogs of several psychedelics, including analogs of ibogaine, a molecule that’s been touted as a treatment for substance use disorder on the basis of anecdotal reports but can cause an irregular heartbeat. Olson’s lab reported an ibogaine analog called tabernanthalog in 2020 that looked promising in studies with rodents.


Dalibor Sames, a chemist at Columbia University and cofounder of Gilgamesh Pharmaceuticals, another company making molecules inspired by psychedelics, says scientists are trying to get a deeper understanding of how psychedelics work and then fine-tune the molecules to improve them, whether that means making them safer or more effective. “Exploring and expanding pharmacological space—that’s what chemists do,” he says.

Last year, researchers led by Sames reported novel derivatives of ibogaine in a preprint, which has not been peer­-reviewed. They swapped the indole in ibogaine for a benzofuran and removed the methyl from its methoxy group to create oxa-noribogaine. They showed that in rats this compound was better than ibogaine at tamping down addictive behavior and didn’t have any cardiac side effects.

In a similar vein, researchers at the Chinese Academy of Sciences and ShanghaiTech University recently reported the structure of the 5-HT2A serotonin receptor bound to LSD, psilocin, and several nonhallucinogenic molecules. The receptor is thought to mediate psychedelics’ therapeutic and hallucinogenic effects. The researchers used their observations of the interactions to design IHCH-7079 and IHCH-7086, compounds that in mice have therapeutic benefits but don’t cause behavior that’s indicative of hallucinations.

“A more selective agent, an agent that lacked the hallucinogenic effects, would be safer for self-administration at home and for chronic treatment,” says Timothy Piser, chief scientific officer of Onsero Therapeutics, a company developing novel compounds that target 5-HT2A. “The goal is to make this powerful mechanism widely accessible to folks and safe through new therapeutics.”

There’s a lot of investors talking up the possibility, and there’s a lot of potential money to be made if it were true. But we don’t know right now whether it’s a mythical unicorn or not.
Aidan Hampson, senior adviser, National Institute on Drug Abuse

But there’s a major downside to targeting the 5-HT2A receptor, UNC’s Roth says. Drugs that bind to 5-HT2A often also bind to 5-HT2B, a serotonin receptor in the heart. This binding can lead to problems in the heart’s valves. Interactions between fenfluramine, an ingredient in the weight-loss drug fen-phen, and 5-HT2B caused a spate of heart valve abnormality cases in the 1990s. The FDA took fen-phen off the market in 1997.

Some scientists are skeptical that it’s possible to decouple psychedelics’ hallucinatory effects from their therapeutic effects. “There’s a lot of investors talking up the possibility, and there’s a lot of potential money to be made if it were true,” the National Institute on Drug Abuse’s Hampson says. “But we don’t know right now whether it’s a mythical unicorn or not.”

So far, researchers have managed to demonstrate this type of decoupling only in rodents. In their studies, head twitching is an indication that a compound causes hallucinations, and depression is measured by a rodent’s refusal to swim when forced or lack of struggling when suspended by its tail.

Psilocin binds within the 5-HT<sub>2A</sub> receptor.
Credit: Sheng Wang group
The X-ray crystal structure of psilocin bound to the 5-HT2A receptor (C = aqua, N = purple, and O = red)

“You can’t translate from a rat or even a nonhuman primate directly to the human condition,” the National Institute of Mental Health’s Zalcman says. “While you develop a lot of really important leads and information in these preclinical studies, at the end of the day, the critical studies have to be done in human populations.” And it takes years to get a molecule to that point.

Tristan McClure-Begley, a pharmacologist and program manager at the US Defense Advanced Research Projects Agency (DARPA), says he’d like to see scientists look for fundamentally different molecules that can act on the same targets that psychedelics do. “I am unconvinced that the existing pharmacopoeia is representative of enough chemical diversity,” he says. “Every drug that we have, whether it’s an FDA-approved substance or a natural product, like psilocybin or DMT, they tend to be structurally similar.”

DARPA has given UNC’s Roth a grant of nearly $27 million to create better medicines for treating mental illness using the biochemistry of psychedelics and other psychoactive molecules. But Roth says he’s agnostic about whether it’s possible to remove the hallucinatory aspects of these molecules from their therapeutic properties.

“It’s basically a hypothesis to test,” he says. And while Roth hopes it can be done, he says the data are not strong one way or the other. “We won’t know until we do clinical trials,” he says.

Removing the psychedelic effects of psychedelic drugs is controversial, says David E. Nichols, an emeritus professor in pharmacology at Purdue University. He is working with Eleusis—the company pursuing psilocin infusions. In studies of people who are in end-of-life existential distress and take psilocybin, Nichols says, “there is a cognitive component, a kind of mystical experience that takes away their fear of death.”

If these are to be interesting tools of therapy, they need to be more widely studied.
Tyra Callaway, vice president of process chemistry and formulations, Mimosa Therapeutics

He goes further when it comes to PTSD. “The idea that you could take away the psychoactive effect of MDMA for treating PTSD is ludicrous,” he says, “because part of the therapy in MDMA is actually having people talk about the events” that caused the trauma.

Matthew Baggott, CEO of Tactogen, a company working on MDMA derivatives for mental health treatments, agrees, to a point. “Our hypothesis is that the emotional effects of MDMA are important for its therapeutic effects,” he says. People who take MDMA report feeling decreased neuroticism and are less critical of themselves. In that state of mind, Baggott says, “people are able to think more clearly about things that they ordinarily try to avoid.”


What Tactogen is trying to do, Baggott says, is make novel molecules that share MDMA’s core therapeutic effects but have fewer undesirable effects, such as acute hypertension, overuse liability, and decreased therapeutic effects with repeated use. “We’re trying to make molecules that engineer away some of those things,” he says.

To accomplish that, Tactogen scientists use machine learning to model how changes to MDMA’s structure might affect the drug’s biochemistry. They synthesize the molecules that seem most interesting, such as 5-MAPBT and 6-MAPBT, test them in assays, and then feed that information back into their machine learning system.

The University of the Sciences’ Wallach shares skepticism that conditions like treatment-resistant depression and PTSD can be treated without the psychedelic experience. “If you talk to anyone who’s had that experience, it’s so psychologically profound,” he says. Its ability to influence perspective, Wallach says, is hard to dismiss. But other indications where psychedelics seem promising—treating cluster headaches, for example—might not require that same mystical experience.

Whether or not it’s possible to remove the psychedelic experience from psychedelics, people working in this space see plenty of work for chemists and other scientists. “Where chemists are really needed is to be able to dissect a molecule, figure out what parts of it are critical for the desired function and what parts are maybe leading to the unnecessary baggage,” UC Davis’s Olson says. “This is a rich, fertile area for chemists.”


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