May 4, 2021

As you know from my previous posts, I have been thinking about the consequences of Covid for companies, industries and society as a whole. My biggest worry is that this pandemic leads to a substantial increase in people suffering from a range of mental health problems, and we are hardly managing to effectively treat these complex conditions even without the Covid hit!  Mental health is a massive and intractable issue for society as a whole, and I fear the aftermath of Covid will just make things worse.

To address this huge and ever-growing unmet need, my research has led me to look at the very promising new trials designed to investigate the use of psychedelics in treating a wide variety of mental health conditions. I believe the potential for the deregulation and use of psychedelics to treat mental illness has all the hallmarks of becoming a runaway mega-trend. Today I would like to tell you in more detail about this fascinating new approach to treating mental health problems.  


Psychedelics are a class of drugs that affect the brain's serotonin receptors, triggering a variety of changes in perception, cognition, mood, and behaviour, with some psychedelics producing an altered state of consciousness. These include drugs such as psilocybin, ecstasy, lysergic acid diethylamide ("LSD"), and ketamine.

Historically, psychedelics have been at the forefront of religious and spiritual healing practices. The effects of these drugs and their potential applications were investigated by scientists as early as 1877, with LSD and psilocybin being discovered by Dr. Albert Hoffman in 1943. By the 1950s, psychedelic substances showed promise as therapeutic treatments in many research studies in North America and in Europe for a multitude of mental illnesses, including addiction and mood disorders.

As free love and anti-war attitudes gained popularity in the 1950s and 1960s, and as psychedelic substances became more widely available for recreational use, regulators were no longer able to control drug abuse. Political parties in power at the time saw these drugs as a significant threat and began to push back against their use. The dangerous and negative effects of such substance use were sensationalised by the media, and negative publicity curtailed the ability of medical researchers to investigate potential medical applications of psychedelics. Any future for greater scientific inquiry and discovery came to a halt when most countries in the world wholly criminalized psychedelic substances.


Since the 1990s and 2000s, society has experienced a liberalisation of political attitudes and an increase in technological advancements, resulting in a drastic change in public and government perspectives towards the use of psychedelics in medical and scientific research. Another contributing factor to the revitalised investigation into psychedelic therapies stems from the mixed results that available pharmacotherapies for those experiencing mental illness can have: selective-serotonin reuptake inhibitors (antidepressants that boost the level of serotonin in the brain) can take months before becoming effective, with the first prescription being effective about 30% of the time. Up to 15% of benzodiazepine users become addicted, and adults on antidepressants are 2.5 times as likely to attempt suicide. Therefore, a growing number of scientists and researchers are conducting clinical trials using psychedelics to treat various psychological illnesses, including depression and posttraumatic stress disorder.

There are a number of compounds that form part of the psychedelics group of drugs, and the one that seems to be in focus initially is Psilocybin. Psilocybin is the active ingredient in "magic mushrooms", a term used to describe mushrooms which contain hallucinogens. Psilocybin is actively being studied for its potential to treat various conditions, such as anxiety, depression, obsessive-compulsive disorder, and addictions.


Once deemed dangerous and illegal, psychedelic compounds have been rediscovered by the scientific, medical and psychiatric communities, as research reveals their capacity to help patients with a range of maladies. 

“The possibilities for psychedelics to be a new medicine and replace antidepressants is 100 times greater than cannabis.” Simeon Schnapper, Managing Partner JLS Fund


You don’t need me to tell you that mental health issues are one of the greatest costs to society. But in terms of actual numbers, here are some facts and figures to demonstrate just how large this issue is:

  • That makes depression the leading cause of disability worldwide.


But it seems the potential need is probably far larger than just that for just depression, because studies are also showing positive impact in treating addiction and anxiety using psychedelics:

  • More than 1 billion people smoke cigarettes.
  • The global anti-anxiety drug market is on pace to approach $20 billion by 2027.
  • 40.5 million people are dependent on opioids… dependent is the nice way of saying they’re addicted.



  • The conventional market for treatment of depression is thought to be worth $16-billion in the US alone.
  • For the 300-million people around the globe suffering from a major depressive disorder, the prescription of antidepressant medication is, in the majority of cases, the first line of therapy. Yet so few people are getting well.
  • One hundred million of the people diagnosed with major depressive disorder are said to suffer from treatment-resistant depression.
  • According to a study published in the Journal of Clinical Psychiatry, treatment-resistance costs employers upwards of $48 billion each year in the U.S.



The raw numbers are what led one prominent analyst, Tania Gonsalves from Canaccord Genuity Capital Markets, to estimate the total size of the psychedelic therapy market to be at least $100 billion. This would make the market far larger than the market for cannabis.

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What surprised me is that we actually have decades of research demonstrating that psychedelics are effective in treating mental disorders such as depression, suicidal thoughts, PTSD and anxiety. In a promising move, the Food and Drug Administration has now approved and fast-tracked several new clinical research trials, many of them involving using psilocybin to treat mental illness. 

It strikes me that cannabis followed a similar regulatory approval path in the early days, and we have seen how cannabis deregulation has since gathered pace around the globe. I feel the market for psychedelics may follow a similar pattern, with gradual deregulation on the back of new efficacy and safety trial data.

In the US, more cities are just beginning to decriminalise psychedelics like psilocybin. For example, Denver, Oakland, and Santa Cruz have legalized the use of psilocybin. Oregon also became the first state to legalise psilocybin in a therapeutic setting.

The British Columbia Centre on Substance Use will conduct Phase III of MDMA-assisted psychotherapy trials in Vancouver as part of a larger research project overseen by the Multidisciplinary Association for Psychedelic Studies, a non-profit pharmaceutical company based in California. The hope is to have further legalised psychedelic therapy in Canada, as well as other states in the US already this year.

Ketamine is a fast-acting anaesthetic and painkiller used primarily in veterinary surgery and occasionally in human medicine. Ketamine is different to the other psychedelics discussed because it is legally available for veterinarians and medical doctors for medical uses. Therefore, its expansion into psychotherapeutic applications is not as radical as the applications of psilocybin, ecstasy, or LSD may seem to health regulators. A physician is allowed under the respective drug control laws to administer ketamine for a medical purpose. For example, practitioners in Canada (including medical doctors) are allowed, under the regulations to the Controlled Drugs and Substances Act, to prescribe or administer ketamine to an individual where the individual is their patient that the practitioner is treating in their professional capacity and where the ketamine is required to treat the individual's medical condition.


  • A combination of psilocybin and cognitive therapy enabled 80% of one study’s participants to curb their nicotine addiction for at least six months. 
  • A study at Johns Hopkins Medicine found that two doses of psilocybin, in combination with therapy, showed rapid and significant reductions in symptoms of depression in most study subjects. Half of the study participants continued to have a reduction of symptoms through a four-week follow-up period. 
  • Psilocybin has been shown to cause a rapid and sustained reduction in anxiety and depression in a group of patients with life-threatening cancer, with 80% of cancer patients experiencing reduced anxiety and fear of death a minimum of six months after a single psilocybin treatment. 
  • Results from one clinical trial observing the use of ecstasy in treating Post-Traumatic Stress Disorder ("PTSD") show sustained remission from symptoms in over 70% of participants one year after treatment.
  • LSD, also known as "acid", a clinical study conducted at the University of Toronto confirmed that micro-doses of LSD improved mood and focus. LSD has also been shown to be helpful in treating disorders like alcoholism and depression, particularly in patients whose conditions are the result of life-threatening illnesses.
  • A meta analysis of previous trials suggests medicinal psychedelics may help depression. The best results for depressive symptoms were achieved within two-to-seven days. Importantly, the data suggests that medicinal psychedelics have a good safety profile, though they are strongly not recommended for people with a personal or family history of psychosis – schizophrenia, for example.  
  • We also have compelling data showing that the psychedelic formulation Ayahuasca may also be of benefit in treating depression, substance/alcohol addiction and abuse. The Global Ayahuasca Project (GAP) is a University of Melbourne-led observational survey undertaken across 2017-2020 involving 10,838 people who reported use of Ayahuasca. The results revealed among the 708 individuals identified as having an alcohol problem at the time of drinking ayahuasca, 89 per cent reported their condition ‘much improved’ or ‘completely resolved’ as a result of their ayahuasca consumption. Similarly, of 1571 participants who identified as having depression at the time of Ayahuasca consumption, 78 percent reported that their depression was now either ‘very much’ improved or ‘completely resolved’.



“We are on the verge of a paradigm shift in mental healthcare” Dr Carhartt-Harris, Centre for Psychedelic Research.

Earlier this month, Dr Robin Carhart-Harris, head of the Centre for Psychedelic Research at Imperial College London, penned an article for the Guardian Newspaper on the new and promising results from a recent trial into the treatment of depression with psilocybin.

Ever since Prozac was introduced as the most widely prescribed antidepressant, researchers have consistently been attempting to improve on the side effects that come with all selective serotonin reuptake inhibitors (SSRIs). On the topic of these SSRI’s and their side effects, Dr. Carhart-Harris said they can have an emotional blunting effect, stressing that they don’t necessarily help people to “feel great” and can in fact put people off from taking medication for their depression all together. 

Whereas, using psilocybin in conjunction with therapy can have a “resetting” effect. Dr Carhart-Harris reported that participants felt “recalibrated, reset like they haven’t for years…enjoying life”. He believes this is because psychedelics can “get more at the root cause of suffering [rather than] plastering over or muting their symptoms”.

The study and trial consisted of two groups of patients (59 in total), all with moderate-to-severe major depressive disorder. They compared one group, who took escitalopram, an SSRI, every day for 6 weeks, to another who took two high doses of psilocybin, three weeks apart, and in conjunction with specialist therapy.

Both treatment groups were measured across five different types of depressive symptoms: sleep, energy, appetite, mood and suicidal thoughts. The positive response across these measures by the end of the six-week trial in the SSRI treatment group was 33%. For the psilocybin treatment group, they seemed to respond positively far more rapidly, with reported decreased depressive scores only one day after the first dosing session. By the end of the 6-week trial, the average response rate to psilocybin therapy was more than 70%.

Dr. Carhartt-Harris notes that the hypothesis for this trial was that the psilocybin therapy would indeed have more positive effects on the psychological wellbeing of those in that treatment group, however it outperformed the SSRI more than they had ever predicted.

Another promising finding from this trial was the lack of side effects for those in the psilocybin treatment group. Where those in the SSRI group experienced drowsiness, dryness in the mouth, anxiety and sexual dysfunction, the psilocybin group had only one prevalent side effect of a mild to moderate headache one day after dosing.

Dr Carhartt-Harris stated that a six-month follow up with all participants is now under way to test a prediction that “the positive side effects seen in the psilocybin group will be longer lasting”.

This is all clearly exciting news, but other experts in the field warn that this trial was very small, and we are still only in the very early stages in proving the benefits of psychedelics as a mental health treatment. Dr. Carhartt-Harris acknowledges the obstacles that will no doubt come into play in the development of psychedelic medicine, noting that “this road won’t be easy”. He ponders on the “moral objections” and “litigation issues”, wondering if they’ll ever make it at all, but finishes on the positive note:

“One thing I am more certain of, however, is that we must try.”

I would be very interested to hear from any of you in the Pynk community about this intriguing new approach to treating mental health. We see there are already a small number of listed companies in this space. Are there any companies within this industry you think we should take notice of? 

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Written by
Pouneh Bligaard
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