Looking Ahead to a Psychedelic 2022

Last year we published a much shorter Year in Review for 2020, which included a Looking Ahead section where we made some broad suggestions of what we might expect to see in 2021. So, how did we do?

Let’s take a look at each broad ‘prediction’…

There are plenty of catalysts on the horizon as we enter a new year, including clinical trial readouts from COMPASS Pathways’ Phase 2b psilocybin-for-depression study and ATAI Life Sciences’ expected IPO. We should also see MAPS continue to make progress in their Phase 3 investigations into MDMA-for-PTSD, which appear promising thus far. Should the clinical data from these trials continue to indicate the safety and efficacy of psychedelics such as psilocybin and MDMA, it is likely to continue to propel interest and activity in the broader space.

Well, that was an easy prediction, and one that came true (at least to some extent). As mentioned in our earlier section on Psychedelic Research and Clinical Trials in 2021, data readouts from COMPASS Pathways’ Phase 2b and MAPS’ Phase 3 study did attract a great deal of mainstream attention. So too did atai Life Sciences’ Nasdaq IPO.

However, on the investor side of the equation COMPASS’ readout and atai’s IPO did little to bolster confidence in the companies’ valuations. As aforementioned in this series, both companies’ stocks have performed poorly in 2021, reflecting (and perhaps even leading) the broader psychedelics market downtrend: it seems that capital letters are not the only type of capitalisation atai reduced during 2021 (the company name was formerly styled ATAI Life Sciences).

We also expect to see access to psychedelics, notably psilocybin, continue to expand via progressive moves from local governments (urged by grassroots campaigns) and national regulatory bodies such as Health Canada. The combination of bottom-up grassroots advocacy and top-down regulatory amendments may generate a reinforcing cycle that gradually expands access to psychedelics in both a geographical sense, but also in terms of access criteria. We may even see a national legal framework for psilocybin emerge in Canada next year. It is likely that local decriminalisation and legalisation measures in the United States will follow a similar timeline as marijuana, with states such as California next in line for such measures. We anticipate a continuation of the current trend whereby some psychedelics companies publicly state their ambitions to enter these regionally-legalised markets (e.g., Field Trip in the case of Oregon), while others intend to steer clear of entering state markets so long as psychedelics remain federally illegal (e.g., MindMed in the case of Oregon).

You could argue that this was another easy prediction for us to have made back in December 2020. Nonetheless, we are taking this one as a win.

As you can see in our Psychedelics Legalization and Decriminalization Tracker, psychedelic drug policy reform is now prolific in the United States, with a great number of bills emerging in 2021. A prime example being California’s SB 519 which, though put on hold, aims to decriminalize a range of psychedelics in the Golden State.

We didn’t see the type of national legal framework for psilocybin emerge in Canada that we may have alluded to, but we have seen important reforms to the nationwide Special Access Programme which could afford individuals access to psychedelic-assisted therapies.

And, amid all of these psychedelic drug policy reform developments, many psychedelics companies have attempted to capitalise on the newfound attention and regulatory loosening by press releasing their support for amendments, motions, and movements.

Read our Psychedelic Drug Policy Reform in 2021 section for more on the above topics.

We expect that mainstream media will increasingly cover developments from the psychedelic space. This coverage of psychedelics will increasingly contribute to conversations regarding the mental health crisis, which we expect to remain a salient issue given the ongoing impact of COVID-19. Societies across the world have been forced to confront shortcomings in mental health provision, which should catalyse efforts to discover and deliver alternative treatments.

Another easy one, which unsurprisingly came true. As aforementioned, media coverage was stoked by MAPS’ Phase 3 results and psychedelic drug policy reform efforts, among other catalysts. See our section on Psychedelic Perceptions in 2021 for more on this topic.

Technology and digital therapeutics should play an increasing role in the work of psychedelics companies, from augmenting drug discovery by employing AI, right through to empowering end-users of psychedelic therapies and medicines by providing actionable insights through the use of wearables.

This one certainly rang true. Check out the segment Growth of Digital Therapeutics, Delivery Technologies & Drug Discovery Tech in our earlier section for more on this.

From a financial point of view, we expect money will continue entering the space in large sums, with ATAI’s expected IPO representing an important date in the psychedelics financial calendar for 2021. We may also see greater M&A activity in the space next year, and interest from the more conventional pharma industry is likely to increase. We also expect some companies in the space to continue seeking out shorter-term revenue streams. Clinics and wellness centres offering ketamine treatment programs are likely to continue to be a dominant trend, along with consumer packaged goods such as nutraceuticals.

A mixed bag, here. While large sums of money have continued to flow into the space, the story on the public markets has been much less rosy: atai’s IPO, for example, proved to be a damp squib that failed to lift the psychedelics market.

M&A activity didn’t materialise in any substantial way. We will be shamelessly rolling over this prediction into our 2022 batch: more on that below.

We anticipate the pace of press releases and announcements from psychedelics companies to continue increasing, particularly in relation to intellectual property (e.g., patent filings) and research and development (including clinical trials). As with any nascent sector, there will also be a great deal of noise that threatens to obscure the underlying value in any given company or project.

Tell us about it! It’s been quite the year in terms of the pace of company news and research publications.

Now let’s look ahead to 2022…