After the rejection of Lykos Therapeutics’ MDMA-based PTSD treatment tempered excitement for psychedelic therapeutics, a recent approval and positive data are generating new momentum, which experts expect to continue throughout 2025 and 2026.
Last summer’s FDA rejection of Lykos Therapeutics’ MDMA-assisted therapy for post-traumatic stress disorder was a demoralizing blow for the psychedelics space but the sector is seeing a resurgence in 2025 with promising new data, an adjacent approval and a possible assist from newly confirmed HHS Secretary Robert F. Kennedy Jr.
Last month, Johnson & Johnson’s esketamine nasal spray Spravato secured the first FDA approval as a monotherapy for treatment-resistant depression (TRD). Although the drug, a derivative of ketamine, is not considered by J&J to be a true psychedelic, it represents the only psychedelics-based drug on the market, having originally been approved in 2019 for TRD in conjunction with an oral antidepressant. Spravato’s “continued sales acceleration . . . supports the notion psychedelics can become commercially viable for mental health,” Jefferies analysts wrote in a note following the approval.
Adding to this optimism are positive mid-stage results from GH Research and atai Life Sciences in TRD and alcohol use disorder (AUD), respectively, for their 5-MeO-DMT candidates. With more key readouts on the horizon this year and next, biotech analysts and leaders are eager to see progress for psychedelic therapies in the wake of Lykos’ rejection and other challenges that preceded it.
“I think there’s a lot of pent-up excitement,” Doug Drysdale, CEO of Cybin, told BioSpace. “Folks that are close to the space and the work are excited about the results we’re seeing, and I don’t think that it’s broadly appreciated yet just how life-changing these things can be.”
FDA Landscape and RFK Support
The psychedelics space has followed a bit of a boom-and-bust cycle, according to Nick Kadysh, CEO of PharmAla Biotech and board chair at Psychedelics Canada. “I think that there was a huge boom about three, four years ago now where, really and truly, there was probably too much investment, like way too much investment,” he told BioSpace. This led to a wave of bankruptcies, including MindCure Health, which shut down in 2022, and Field Trip Health, which collapsed the following year. The failure of these companies “left a sour taste in many investors about the [psychedelics] sector,” Kadysh said.
Hans Eriksson, chief medical officer at HMNC Brain Health, echoed this sentiment. “I think we are in a situation where much of the initial hype around psychedelics has subsided.” He cited the “Lykos disappointment,” which left some psychedelic drug developers reassessing their pipelines and prioritizing non-MDMA assets.
“I don’t think that the FDA did anybody any favors last year,” Kadysh agreed. The agency helped the company to design its clinical trials, he said, only to then reject the therapy and request an additional Phase III clinical trial. “To say that you designed the clinical trial improperly when the regulator was sort of riding side saddle with you the whole time, that I think is inappropriate.”
But the sector could be undergoing a bit of a reset, with the number of companies in Phase III having tripled to six since last June, when just two investigational products were at this stage. “I think we are at sort of a waiting post right now,” Eriksson told BioSpace.
But data readouts are starting to roll out and 2025 is off to a good start already. At the end of January, atai-supported Beckley Psytech reported that 50% of participants treated with BPL-003 abstained from alcohol for at least three months. Meanwhile, in a Phase IIb trial, patients treated with GH’s asset GH001 saw a significant reduction in depression symptoms. The treatment elicited a 77.8% remission rate at six months for those who completed the open-label extension segment of the trial.
“I think there will be a new momentum again,” Eriksson said.
Adding to this optimism, psychedelic drug developers could now have an ally at the FDA in RFK Jr, who was confirmed as Department of Health and Human Services (HHS) secretary last week. He has previously signaled support for the sector, in the past accusing the FDA of “suppressing” treatments like psychedelic drugs, along with stem cell therapies, Pharmaphorum reported.
“It’s always good to have a bit of a champion,” Drysdale said. “I’m not sure how much influence he’ll have over FDA, but at least he should provide a bit of a tailwind for us.”
‘A New Momentum’
The majority of the psychedelics pipeline consists of drugs targeting neuropsychiatric indications, including depression, anxiety and PTSD. This has been another lag for the space, Kadysh said, as “people realized that getting regulatory approval for psychiatric disorders is really, really hard.”
Overall, he said, “The Western world does not have a great track record of bringing new psychiatric drugs on the market. The last major sort of revolution in psychiatric pharmacology was Prozac. That’s a very, very long time ago.” Prozac was first approved by the FDA to treat depression in 1987.
In addition to the readouts already put out by atai and GH, upcoming data for Compass Pathways’ psilocybin treatment COMP360 in TRD is one to watch in 2025, Jefferies analysts wrote to investors. Compass is expecting topline data from a pivotal Phase III trial in TRD in the second quarter of this year, with data from a second Phase III TRD trial in the second half of 2026.
Meanwhile, both Cybin and HMNC Brain Health are also moving forward in the clinic. Cybin is expecting topline efficacy data from a Phase II trial of its deuterated dimethyltryptamine (DMT) treatment for generalized anxiety disorder (GAD), CYB004, in the second quarter of this year. Phase III data from CYB003, a deuterated psilocybin treatment that led to major depressive disorder (MDD) remission rates of 71% after a year of treatment in a Phase II last year, are expected in mid-2026, Drysdale said.
In a Feb. 13 investor note, H.C. Wainwright analysts wrote that they expect a “positive outcome” from the GAD trial, adding that the drug, if approved, has “blockbuster potential.”
For its part, HMNC is currently designing the Phase III program for its ketamine-based drug, KET01, for TRD. “We hope to be able to bring to the market a ketamine-based medication that has a vastly improved tolerability profile,” compared to current ketamine-based antidepressants like Spravato or intravenous ketamine used off label, Eriksson said.
Elsewhere, MindMed is developing MM120 in Phase III trials for both MDD and GAD, with data expected from both programs in 2026, according to a company spokesperson.
While the results of these trials remain to be seen, Drysdale indicated that the industry may be on the cusp of the next neuropsychiatric revolution. “[CYB003] is an intervention where we can come in and rapidly remove someone’s depression within a day or so for the majority of patients and then have the majority of them have some benefit a year later,” he said. “That’s, I think, the biggest breakthrough in psychiatric pharmacology in 40 years.”
