Happy Pills 2.0 are coming
It's (almost) time for psychedelic psychotherapy
Take a deep breath, it’s about to get heavy.
We are in the middle of an epidemic that hardly anyone knows about. There’s a silent nemesis picking away our young, one at a time, every 11 minutes.
Suicide is the second leading cause of death for people between 10-14 and 20-34 years in the US.
If that hasn’t blown your mind, get this - mood disorders like depression and bipolar lead to most hospitalizations for people of this age group.
These numbers are for the US, but the stats on mental health are just as shocking in Asia and the rest of the world.
When we can’t find a way to soothe ourselves from the realities of modern living, we turn to opioids, of course. It’s no surprise then that opioid overdose deaths are up 4x since 2010.
So what better way to solve our psychological problems than by turning to…. ahem… other illicit drugs?
Enter the psychedelic renaissance
LSD, MDMA, and magic mushrooms may bring hazy memories of nights you made more bad decisions than you would like to admit.
And, to no surprise to the ancients and shamans who have been using them therapeutically for millennia, they might also hold the key to treating our mental health crisis.
After being under prohibition for half a century, these substances are now backed by billions of dollars in research funding, policy reforms, and clinical trials that are proving they can treat depression, dementia, bipolar disorder, PTSD, addictions, and other silent killers of our generation.
It’s likely the most exciting development in psychopharmacology we’ve seen.
Why all the fuss?
Meds like Prozac, Valium, Xanax, Zoloft, and many others have been used for years to treat conditions that psychedelics are being trialed for, but they are ineffective for just as many people as they help.
Then there are the side effects that come with the package: Weight gain, sexual dysfunction, and sleep disorders, to name a few.
What’s drumming up the most enthusiasm for psychedelic-assisted therapy is that compounds like psilocybin (found in ‘magic mushrooms’) can produce structural changes in the brain.
Rather than simply masking symptomatic moods and behaviors like common medications do, this gets right to the engineering that causes them in the first place.
Psilocybin can rapidly regenerate neural connections that deteriorate and lead to disorders such as depression, dementia, and even Parkinson's.
One scientist compared it to a cast that allows a broken bone to heal into place.
We’re looking at an alternative treatment that works faster and has more durable results without the side effects.
So yeah, this is groundbreaking and can be HUGE for the future of mental illness.
Capital, research & policy
Johnson & Johnson came up with a ketamine spray (it’s non-psychedelic but psychoactive and illicit) for non-treatable depression.
This was back in 2019.
Two years of a boom in the sector followed, attracting over $2.6Bn in capital throughout 2020 and 2021.
The fervor has chilled since. Funding is down a staggering 85% in 2023 from its high two years prior.
This is why I think it’s a great time to pay attention to this space.
Real progress is made during down-cycles after all the hype subsides.
As markets cooled, clinical trials have increased exponentially. Government restrictions have also eased since. In 2023, Australia made it legal to prescribe psilocybin and MDMA to treat depression.
Such watershed moments will make this sector.
The players
For psychedelic-assisted therapy to enter the mainstream, we will need more investment, research, favorable policy, and a shift in public perception.
These four drivers will signal if this market booms or busts.
There’s enough traction on all these fronts to make me optimistic, and maybe, just maybe, I’m feeling the FOMO.
This isn’t a greenfield space. Large players like Pfizer are already in the game. Also, established ETFs can instantaneously expose you to various companies pioneering the research, like the Horizons Psychedelic Stock Index (‘PSYK’).
Other companies leading the charge are Compass Pathways (‘CMPS’), ATAI Life Sciences (ATAI), Psybio Therapeutics (PSYB), Mind Medicine (‘MMED’), and many more.
Many companies are functioning in legal grey zones that require thorough professional research to flush out their risks.
Clinical trials, patent approvals, and government regulations all take time. Also, public perception can swing against experimental and emerging medicines.
If you decide to take the plunge, expect to be invested for the long haul and ready your stomach for the ups and downs.
Did I miss anything? Is psychedelic-assisted therapy the future of mental health treatments or just another fad? Leave me a comment or hit reply if you’re reading this from your inbox - I would love to hear from you!
Disclaimer: Material on AltMacro.com and the Alt Macro newsletter is not investment advice but is for general information only. You are solely responsible for making your own investment and financial decisions. Owners of Alt Macro, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission or with any securities regulatory authority.