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Psychedelic startups think ketamine, MDMA, and psilocybin could be a big business

by Staff Writer
October 13, 2021
in Business
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For a long time, Chase Chewning had wanted to try a new type of psychotherapy that uses ketamine, a dissociative anesthetic that’s shown promise as a mental health treatment. Chewning, a veteran who has had several recreational experiences with MDMA and psilocybin, hoped the drug could help him with his PTSD, so he made an appointment at a Los Angeles ketamine therapy clinic operated by Field Trip Health. Having now completed two ketamine sessions, Chewning says his experience at Field Trip has indeed helped him make progress.

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“In two sessions, I am profoundly closer to my work on my PTSD,” Chewning told Recode. “And [the treatment] left me with a lot of responsibility on some new work, but very, very exciting things, because I know I’m moving in the right direction, towards better mental health.”

Field Trip, a Canadian startup, is betting others could have similar experiences. In fact, the company is so confident in the promise of these drugs that it’s building 75 centers for psychedelic therapy over the next three years.

Although ketamine is legal if prescribed by a doctor, the Drug Enforcement Agency (DEA) lists psychedelics like psilocybin and MDMA in schedule 1 of the Controlled Substance Act, which says they have no medical value and a high potential for abuse. But there’s also growing evidence that psychedelics could lead to game-changing medications and, when combined with conventional therapy, may help people who aren’t seeing results through currently available treatments. Several US cities have already decriminalized psilocybin, the active ingredient in magic mushrooms, and the Food and Drug Administration (FDA) is overseeing clinical trials into using psychedelics to treat PTSD and depression.

This potentially revolutionary approach to mental health also represents a tremendous commercial opportunity for health care and pharmaceutical companies. But despite promising, privately funded studies into psychedelics, current government regulations prevent the wider availability of psychedelic therapy.

Field Trip currently offers ketamine treatments at six clinics in major US cities, including New York and Atlanta. The actual ketamine therapy session — Field Trip calls this a “psychedelic exploration session” — involves a patient receiving one or two shots of ketamine into their arm muscles, initiating a 45- to 90-minute hallucinogenic journey that’s supposed to help people disconnect from their normal selves. As the drug sets in, patients cover their eyes and listen to music as they’re coached by a therapist. The next day, patients return for a follow-up appointment called an “integration session” to reflect on the treatment.

“Whatever comes up in your session — new insights, perspectives — that can be fleeting if you don’t work to integrate that into your life,” Emily Hackenburg, Field Trip’s clinical director, told Recode. “Regardless of what psychedelic you’re using, preparation, journey, integration, that’s going to be the same.”

Field Trip says most patients undergo the ketamine program four to six times. The initial treatment, which includes a medical screening, an exploration session, and an integration session, costs $750. Because ketamine isn’t specifically approved for mental health applications by the FDA, the medication itself isn’t typically covered by insurance, though customers can try to get other aspects of the therapy reimbursed.

Though its treatments are expensive, Field Trip is growing quickly. In July, the company went public through a direct listing on Nasdaq and plans to offer ketamine treatments at 20 clinics in the US by early next year. Along the way, Field Trip is also setting itself up to be a huge player in an industry that largely doesn’t exist yet. While Field Trip’s US locations are currently limited to ketamine, the company hopes to offer more psychedelics, including MDMA, when the government approves their use. Field Trip is even developing its own psychedelic that’s meant to have similar effects as psilocybin, but with a much shorter trip.

The future of psychedelic therapy is also uncertain. While it seems likely that at least some psychedelic drugs will be approved for certain medical conditions in the years to come, it’s also possible that recreational use could be widely decriminalized or legalized. The status quo could also stay in place.

The US government has only recently begun to support and review research into psychedelics’ potential mental health benefits. But that slow approach means that just a few prominent companies and nonprofits are shaping much of the narrative surrounding the emerging psychedelics industry.

“This is really the most promising development in mental health care to come along, literally, in many decades. And that’s one reason why you don’t want a few companies controlling it,” says Mason Marks, a project lead at Harvard Law’s Petrie-Flom Center who focuses on psychedelics regulation.

Of course, not everyone is pleased that these startups could make psychedelics more mainstream. Some think these companies are capitalizing on a medical pathway for psychedelics that could ultimately exclude recreational users and make psychedelics more expensive and inaccessible. Others believe that psychedelics are being marketed as a cure-all that current research doesn’t support.

“Our experience with so-called pain clinics peddling untold amounts of opioids should be a cautionary tale,” Kevin Sabet, a former White House drug policy adviser who opposed legalizing cannabis, told Recode. “The psychedelics fad has reached a fever pitch far above and beyond what science tells us. We cannot forget the harmful potential and opportunity for manipulation by massive corporate interests.”

Nevertheless, it seems clear that the movement to make psychedelic therapy an accepted mental health treatment is gaining momentum.

A psychedelics renaissance could be coming

The origins of the government’s apprehensive approach to psychedelic-based mental health treatment stretch back decades. In the 1950s and ’60s, the federal government invested heavily into researching drugs like LSD and psilocybin. But after the Controlled Substances Act of 1972, federal funding into the possible benefits of psychedelics quickly evaporated.

That stance may be changing. In September, researchers at Johns Hopkins University received funding from the National Institute on Drug Abuse to investigate whether psilocybin could help people quit cigarettes. it appears to be the first federally funded direct study in decades of the mental health benefits of a traditional psychedelic drug. At the same time, the DEA, which keeps tight caps on how much psychedelics are available to US researchers, recently proposed increasing the nationwide availability of psilocybin from 30 grams to 1,500 grams.

Ketamine can be taken in the form of a lozenge, an IV, a nasal spray, or an intramuscular shot.

Cole Burston/AFP via Getty Images

There is also a growing number of efforts to make psychedelics more widely available not only to researchers but also to patients. In the last few years, Denver, Oakland, and Washington, DC, have decriminalized psilocybin, and in 2023, supervised psilocybin-based therapy will become legal in Oregon. Meanwhile, a psilocybin regimen for depression is in phase 2 trials, and an MDMA-assisted treatment for people with severe PTSD is currently in phase 3 clinical trials. The FDA has also already approved a Johnson & Johnson drug called Spravato, a nasal spray that’s derived from ketamine, to treat depression.

In anticipation of looser regulations, there’s a burgeoning psychedelic health care industry made up of companies that want to offer psychedelic treatments or develop new drugs based on psychedelic compounds. In addition to Field Trip, there are 31 publicly traded firms focused on psychedelics, and at least 18 more that are still private, according to the psychedelics industry tracker Psilocybin Alpha. Inspired by promising but limited research showing that psychedelics can help treat not only treatment-resistant depression but also addiction and end-of-life anxiety, venture capitalists, including Peter Thiel, have poured hundreds of millions of dollars into these companies.

“There’s a lot of enthusiasm. And that makes sense because there are many people who have suffered for many years for whom this has brought relief,” Sharmin Ghaznavi, an associate director of Massachusetts General Hospital’s Center for the Neuroscience of Psychedelics, told Recode. “But we have a lot that we need to learn, and we owe that to our patients.”

The government has been slow to support research into the potential benefits of psychedelics. That means philanthropies and private companies have funded almost all of the recent studies into the medical applications of drugs like MDMA and psilocybin. Many of those studies come with important caveats, including small sample sizes and unrepresentative patient pools. One 2018 analysis of 18 psychedelics studies found that 82 percent of the participants were white.

But even as research into psychedelics continues, companies are already developing everything from apps for guided trips and mushroom-facilitated retreats to psychedelic-assisted virtual reality experiences. After all, as with any big pharmaceutical breakthrough, the future of psychedelics could be extremely profitable.

How Field Trip plans to get ahead

Field Trip is well on its way to being a major player in the psychedelic health care industry. A centerpiece of Field Trip’s plan is the design of its clinics. The idea, the company says, is that psychedelics will need a brand new environment for medical care. Doctors’ offices are too sterile, and therapists’ offices don’t have the medical staff, time, or equipment to monitor patients. After all, trips on more intense psychedelic drugs require several hours and lots of supervision.

That’s why, at Field Trip’s New York location, there are serene rooms with reclining chairs and headphones for patients to use during their exploration sessions. Because ketamine can increase blood pressure, there are blood pressure monitors on-site, too. There are also rooms for post-trip reflection, where there are soft fur rugs, easels for drawing, and a gong. The space also includes a wall covered in live moss, a bubble-blowing machine, and several copies of Michael Pollan’s influential book about psychedelics, How to Change Your Mind.

“There’s lots of shoe companies out there, but Nike has a very prominent voice in that conversation,” Field Trip CEO Ronan Levy told Recode. “I want Field Trip to do that for psychedelics.”

The interior of a Field Trip clinic featuring floor cushions and a live moss wall.

Field Trip hopes to open 75 clinics by 2024.

Cole Burston/AFP via Getty Images

While the company had about $100 million on hand at the end of June, Field Trip is currently making less than $1 million on patient services, according to its most recent quarterly report. One of the biggest challenges for Field Trip is that most people don’t have several thousand dollars lying around to spend on ketamine therapy. But if the FDA were to approve a psychedelic drug for a mental health condition, insurance companies may start to cover more Field Trip treatments, bringing them a huge new customer base.

There are certain conditions, like a history of psychosis or a ketamine allergy, that rule out Field Trip’s offering for some patients. Levy says the safety of ketamine has been well established and that Field Trip hasn’t had any medical issues. But others believe there is a litany of open questions.

Jeffrey Lieberman, a Columbia psychiatry professor, says the enthusiasm about psychedelics is outpacing the science, and he worries that mishaps could lead to backlash and a return to restrictions. If MDMA is approved for PTSD, for example, companies could end up prescribing the drug for other conditions that it hasn’t been approved for. That practice, which is sometimes called off-label prescribing, is already in place for ketamine. Lieberman added that we don’t fully understand the long-term safety of ketamine. There is also evidence ketamine clinics throughout the US are overhyping the drug’s abilities and not properly screening patients, acccording to a 2018 investigation by STAT.

There are other objections. A significant number of people oppose even the monitored use of psychedelics, including the 44 percent of Oregon residents who voted against the state’s recent measure to legalize a supervised psilocybin therapy model much like Field Trip’s. There are also psychedelic advocates who believe that allowing companies like Field Trip to do business will end up medicalizing and driving up the cost of psychedelics, which they think should be freely available.

The companies and people hoping to make psychedelic-based mental health care mainstream say this trend is about far more than just the drugs themselves.

“Taking a gram of mushrooms recreationally with your friends sitting around and giggling at YouTube music videos … it’s harmless,” Sanjay Singhal, a tech entrepreneur who directs the Nikean Foundation, a nonprofit that funds psychedelics research, told Recode. “But it’s completely different from taking five grams, knocking you out in the presence of a therapist for five hours while your brain processes whatever trauma, anxiety, emotional issues you might have.”

We’re bound to hear more about psychedelic therapy in the months to come. But even if psychedelics’ legal status remains the same, it’s clear to some patients that there’s a place for psychedelic therapy — even if it’s just the existing ketamine treatments — in our health care system. To Chewning, the veteran, these startups are addressing the demand for better mental health care and providing a new option for people who haven’t had success with traditional medications and therapy.

“I just look at what they’ve done for me personally, I look at what they have done for people I know,” he said. “We’re being put on a path toward a higher quality of life in the near future.”

Source by www.vox.com

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