3 Psychedelic Stocks To Watch
First off, investors should know that the psychedelic industry contains early‑stage biotech with high clinical risk.
Most psychedelic companies are still in Phase 2/3 trials; no FDA-approved psychedelic therapy (except ketamine derivatives like Spravato). Outcomes depend on regulatory decisions and trial designs.
They also involve capital-intensive drug development. These firms raise heavily ($100M+ rounds are common) but have slowed from their 2021 peak.
The regulatory landscape is in flux too. The FDA has granted “Breakthrough Therapy” status to some programs (e.g., MindMed’s LSD or Cybin’s psilocybin analog), accelerating paths forward. But other efforts (like Lykos’s MDMA/PTSD program) hit setbacks due to trial design/data issues.
The FDA has given “Breakthrough Therapy” status to psilocybin for treating depression. This classification accelerates clinical trials and approval processes. Countries like Canada and Australia have already relaxed restrictions on certain psychedelics for medical use.
There is market potential, but profit models remain unproven. Estimates suggest the psychedelic therapeutic market could reach $1–6+ billion by 2030–2034. Commercial viability (staffing/training/supervision) remains a concern. Nasal sprays like BPL‑003 may offer more scalable models.
Psychedelic stocks are analogous to out-of-the-money call option trades. Share prices are highly sensitive to positive clinical or regulatory catalysts that can trigger sharp, rapid gains.
Most of these investments are not expected to work out long term, though a select few have a chance to make multiples of the original investment.
3 Psychedelic Stocks Worth Monitoring
- ATAI Life Sciences (NASDAQ: ATAI) – ATAI’s Phase 2b trial of BPL‑003 showed a substantial ~11-point drop in MADRS depression scores (vs. ~5.8 in the control group), with effects emerging within a day and lasting eight weeks. The results have attracted positive FDA engagement. With a market cap still under $1 billion, investors see room for upside if BPL-003 enters late-stage trials and secures regulatory approval.
- Compass Pathways (NASDAQ: CMPS) – Compass is at the forefront of synthetic psilocybin (COMP360), having recently achieved the primary endpoint in its first Phase 3 trial with a statistically meaningful ~3.6‑point MADRS benefit at six weeks. The company has Breakthrough Therapy designation and is running two key Phase 3 trials, with upcoming data from COMP005 expected around mid-2025 and COMP006 later this year. These milestones will be important in shaping market confidence and future valuation.
- Mind Medicine Inc. (NASDAQ: MNMD) – MindMed’s MM‑120, an LSD-d‑tartrate formulation, has Breakthrough Therapy status for generalized anxiety disorder and started its first Phase 3 Voyage trial in December 2024. The company is expanding the program into two additional Phase 3 studies (Panorama in mid‑2025 and Emerge for MDD). All data readouts are expected by the end of 2026. Its diversified pipeline (including LSD, MDMA, and ibogaine) offers multiple potential catalysts over the next 18–24 months.
Bottom line
No company developing psychedelic drugs has obtained regulatory approvals or achieved profitability yet.
Companies in this space are generally pre-revenue and burning cash through clinical trials.
The sector combines high upside with high uncertainty. Investors should expect volatile share prices tied to clinical/regulatory news, require size-insulated capital reserves, and maintain well-diversified biotech holdings.