The Food and Drug Administration (FDA) may soon issue emergency use authorizations for psychedelic substances like psilocybin, proponents of psychedelic therapy believe, amid a shift in attitude towards psychedelic therapies under the Trump administration.
Emergency use authorizations (EUAs) are considered a more likely near-term regulatory pathway for psychedelics such as psilocybin because, unlike full FDA approval, they require a lower standard of evidence, a report from health-oriented news website Stat published on Wednesday highlighted.
EUA’s only require that it be "reasonable to believe" that a product "may be effective" based on data from adequate clinical trials, even if substantial proof of efficacy is not yet established.
There is growing support within the US government for psychedelics as mental health treatments. Robert F Kennedy Jr, now Secretary of Health and Human Services, has spoken favorably about psychedelics and declared an end to what he called the FDA’s “aggressive suppression of psychedelics.”
FDA Commissioner Marty Makary has also made positive remarks about the promise psychedelics hold, especially for veterans, which has buoyed hopes among companies and investors in the sector.
This shift comes after a setback in 2024 when the FDA rejected Lykos Therapeutics’ application to use MDMA-assisted therapy for PTSD, underscoring the challenges of full approval but leaving room for EUAs as an alternative regulatory pathway.
Speculation that the FDA may issue EUAs for psychedelics saw shares of life sciences and biotechnology firms advancing psychedelic therapies move higher on Wednesday.
atai Life Sciences (NASDAQ:ATAI, ETR:9VC), which is developing rapid-acting psychedelic-based therapies for mental health disorders, including an intranasal 5-MeO-DMT formulation BPL-003 targeting treatment-resistant depression, saw its shares add 8% at about $2.40 late morning on Wednesday.
Compass Pathways (NASDAQ:CMPS), a company developing a psilocybin therapy for treatment-resistant depression in which atai holds an equity stake, also saw its shares add 8%.
Mind Medicine (NASDAQ:MNMD) shares were up almost 7%, and both GH Research (NASDAQ:GHRS) and Cybin Inc. (NYSE-A:CYBN) traded about 3% higher.