Psychedelic Drug Investments Boom in 2024: Key Startups Raising Funds

The investment in psychedelic drugs surged in 2020, driven by the COVID-19 pandemic's emphasis on mental health. Legalization of psychoactive compounds is expanding globally. A significant milestone was the FDA’s 2020 decision to fast-track a psilocybin-based depression treatment by Compass Pathways, now the largest public company in psychedelic drug development. Since then, various VCs like PsyMed Ventures, Satori Neuro, and Negev Capital have emerged, and companies such as Compass Pathways, GH Research, Atai Life Sciences, Cybin, and MindMed have gone public. Although psychedelic therapeutics investments slowed last year, they have rebounded in 2024 as these drugs advance in clinical trials and gain approvals. Here's a look at the top startups actively raising funds and closing deals in 2024.

Reunion Neuroscience
Based in Morristown, New Jersey, Reunion Neuroscience, founded in 2022, is a spin-off from Field Trip Health, a company that operated ketamine-assisted therapy clinics in Canada and the U.S. Reunion focuses on developing next-generation psychedelics. These drugs, which target the serotonin 2A receptor, are similar to classical psychedelics but have shorter durations. In May 2024, Reunion raised $103 million in a Series A round led by MPM BioImpact and Novo Holdings to support a phase 2 trial for their lead candidate, RE104, aimed at treating postpartum depression. RE104, akin to psilocybin, showed safety, tolerance, and a shorter duration (three to four hours) in a phase 1 trial. Reunion is also exploring RE104 for treating adjustment disorder in cancer patients.

Lykos Therapeutics
Headquartered in San Jose, California, Lykos Therapeutics was established in 2014 as a spin-off from the Multidisciplinary Association for Psychedelic Studies (MAPS). The company aims to bring MDMA-assisted therapy to FDA approval and commercialization. MDMA, an entactogen, enhances self-awareness and introspection. In January 2024, Lykos secured $100 million in a Series A round led by Helena and rebranded from MAPS PBC to Lykos Therapeutics. The company has filed for FDA approval of MDMA-assisted therapy for PTSD, supported by data from two phase 3 trials. If approved, it would be the first FDA-sanctioned psychedelic-assisted therapy for PTSD, with a decision expected by August 2024. The Series A funds will also support the commercialization wing.

Beckley Psytech
Located in Oxford, UK, Beckley Psytech was founded in 2019 by Amanda Feilding and Cosmo Feilding Mellen. The company builds on the Beckley Foundation’s work to develop psychedelic medicines for psychiatric and neurological conditions. In January 2024, Beckley Psytech received a $50 million investment from atai Life Sciences to expedite their two clinical-stage candidates. Their lead candidate, BPL-003, an intranasal formulation of 5-MeO-DMT, is in phase 2 trials for treatment-resistant depression and alcohol use disorder. A phase 2a study showed a single dose induced an antidepressant response in 55% of patients.

Gilgamesh Pharmaceuticals
New York-based Gilgamesh Pharmaceuticals, founded in 2019, focuses on developing new chemical entities that offer the therapeutic benefits of psychedelics with better safety, tolerability, and efficacy. In May 2024, Gilgamesh signed a collaboration with AbbVie, involving a $65 million upfront payment and up to $1.95 billion in option fees and milestones. This partnership allows AbbVie to license, develop, and commercialize next-generation neuroplastogens. Gilgamesh’s lead programs, GM-1020 and GM-2505, are in phase 2 trials for major depressive disorder. The company also received a $14 million NIDA grant in March 2024 for developing GM-3009, an ibogaine analog for substance use disorders.

Seaport Therapeutics
Based in Boston, Massachusetts, Seaport Therapeutics, founded in 2024, is a spin-off from PureTech Health. Seaport raised $100 million in a Series A round from ARCH Venture Partners, Sofinnova Investments, and Third Rock Ventures. Daphne Zohar, PureTech founder, leads Seaport. The company uses the Glyph technology platform to create medicines for depression and anxiety by leveraging the lymphatic system. Their lead candidate, SPT-300, is an oral prodrug of allopregnanolone, in phase 2 trials. Seaport is also developing SPT-348, a prodrug of a non-hallucinogenic neuroplastogen for mood disorders, aiming to offer improved pharmacokinetics and tolerability.

These companies are at the forefront of the rapidly growing field of psychedelic therapeutics, each contributing unique approaches and innovations to address mental health challenges.

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