Psychedelics in Depression Treatment: Recent Trials Spark Mixed Investor Reactions

Recent clinical trial results for psychedelic-based therapies in treatment-resistant depression (TRD) have reignited interest in the field, albeit with mixed investor reactions. While some readouts have fallen short of expectations, others have shown promising efficacy, highlighting the potential of these novel treatments in addressing mental health crises.

Compass Pathways' COMP360 Meets Primary Endpoint, But Investors Remain Cautious

Compass Pathways recently reported data from the first of two Phase III trials for its psilocybin-based drug, COMP360, in TRD. The trial met its primary endpoint, demonstrating a 3.6-point reduction in depression symptoms on the Montgomery-Åsberg Depression Rating Scale (MADRS) over six weeks compared to placebo. However, this result fell short of the 4.2-point reduction observed in Phase II, leading to a significant drop in the company's stock value.

Guy Goodwin, Compass' chief medical officer, attributed the market's reaction to misunderstood expectations and limited statistical understanding. He emphasized that the difference between the Phase II and Phase III results was not statistically significant. The company's decision to withhold certain data, including placebo arm performance, was driven by regulatory considerations and the ongoing nature of the trial.

Beckley Psytech and atai Life Sciences' BPL-003 Shows Promise

In contrast to Compass' mixed reception, Beckley Psytech and atai Life Sciences reported positive Phase II results for their intranasal 5-MeO-DMT-based candidate, BPL-003. The drug elicited an 11.1-point reduction on the MADRS scale after a single dose, drawing praise from analysts who called the data "robust."

Cosmo Feilding Mellen, CEO of Beckley, highlighted the potential advantages of BPL-003, including its shorter time-in-clinic requirement compared to psilocybin-based treatments. This could offer significant benefits in terms of scalability and patient access.

Challenges and Opportunities in the Psychedelics Space

While recent readouts have revived interest in psychedelic therapies, several challenges remain. Durability of effect is a key concern, with some experts questioning the long-term efficacy of these treatments. Jennifer Mitchell, a professor at the University of California, San Francisco, emphasized the need for extended durability data to justify the costs associated with administering psychedelic therapies.

Market viability and commercial potential continue to be areas of investor skepticism. Paul Matteis, head of therapeutics research and biotechnology at Stifel, noted that investors are looking for "outlier" results that significantly outperform current standards of care.

Despite these challenges, the psychedelics field has seen renewed interest from regulators. FDA Commissioner Marty Makary has acknowledged the importance of upcoming psychedelic clinical readouts and expressed a commitment to expeditious review of the data. The recently announced Commissioner's National Priority Voucher program could potentially shorten approval timelines for drugs addressing U.S. health crises, which may benefit psychedelic therapies targeting TRD.

As the field progresses, companies like GH Research and Biomind Labs are also developing candidates for TRD, while others such as Transcend Therapeutics and Tactogen continue to target PTSD. The coming years are likely to see further developments across various indications, including depression, PTSD, anxiety, and substance use disorders.