Recent deal activities, study readouts and regulatory milestones indicate a resurrection of an old concept - the use of psychedelics for treating major depressive disorder (MDD) and other psychiatric diseases.
Before the approval of Janssen’s Esketamine nasal spray Spravato, the depression market experienced a decade-long innovation gap, with a high unmet need remaining, as more than 30% of patients do not respond to current treatments.
Challenging development paths with costly trials, large placebo effect rates and massive post-approval marketing costs have impeded access to the depression market for smaller, potentially more risk-affine, and innovative players.
Building on half a century of anecdotal evidence, psychedelics have recently shown signs of efficacy in a small number of investigator-sponsored, randomized, controlled trials. Psychedelics might offer important benefits over traditional MDD treatments including a fast onset and long duration of responses, as well as a comparably clean side-effect profile and low addictive potential.
The current treatment model for psychedelic therapy, however, is time and therapy-intensive, when compared to classical antidepressants, which can be taken unsupervised and continually, potentially narrowing psychedelics’ market potential.
Moreover, research and development (R&D), as well as pricing and post marketing strategies for drugs based on controlled substances face their own set of challenges, including a negative image in the media and public, which might thwart their success.
To create a viable business case for psychedelics, a number of items on the list have to be ticked, including novel IP, unsupervised administration options, a way to account for placebo responses in trials, de-regulation of R&D activities, and a shift in public image.
