The Opportunity and Promise of Psychedelics in Healthcare
From Athletes to Governors: Psychedelics in the News
Psychedelics seem to be a permanent fixture in the headlines and don’t appear to be going anywhere soon. From former Texas Governor Rick Perry to NFL quarterback Aaron Rodgers, why are so many public figures touting the benefits of taking mushrooms? Considering psychedelic drugs are a Schedule I controlled substance, and long associated with counterculture, to the casual observer, it would seem that a “psychedelics renaissance” has come out of nowhere.
The answer, of course, is more nuanced and has been a long time in the making. Advocacy momentum has brought about easing regulations and as a result scientific research has steadily been gaining momentum (as Figure 1 below shows). And the early data is very promising. The data shows these compounds as safe, well tolerated, and, when used in the right set and setting, appear to be working to treat some of the most challenging therapeutic indications. Mr. Perry supports groups of Veterans who have successfully been treating PTSD with psychedelics therapies, and Mr. Rogers has been very public in describing how using Ayahuasca helped him alleviate his anxiety about mortality (and coincidentally preceded him being selected as the league MVP 2 years in a row).
These anecdotal endorsements are powerful and varied, with countless others making headlines on a seemingly daily basis. It is not much wonder that conversions about psychedelics and wellness are permeating every corner of society.
Figure 1: Psychedelic Research Momentum
Source: ARK Investment Management LLC, 2022; Data derived from Web of Science
Why Now?
We are most certainly at a regulatory tipping point. Recent ballots put forward in Oregon, Washington, Michigan, Colorado, and California have these states on track to permit psilocybin to be manufactured and used for medicinal purposes. Herein lies the challenge: delivering medicine is not a recreational or access issue.
The tough questions we need to answer run counter to established decriminalization advocacy messaging. One perspective is that mushrooms should be made available for anyone who wants to try them and freely accessible in every convenience store across the country.
This problematically co-mingles the recreational market with the medical market. There is no question that recreationally consuming psychedelics around the corner, but how this impacts healthcare is a whole separate matter.
We can thank advocacy for easing restrictions and opening up the possibility to bring these substances through traditional therapeutic development. It's one thing to go hiking while tripping, it's an entirely other thing to use psilocybin to work through childhood trauma.
Figure 2: Government Agency Adoption
Government agencies view psychedelics as viable treatment options for a variety of illnesses. As investors, we believe that our role is to focus on the actual medical applications and invest in the development of new treatments, standards of care, and indeed new drug development.
The focus, then, is not on legalization and free access. Rather, it is that we now have powerful new molecules that we can research and study. As a society we already have everything we need to bring legal drugs to the market. By bringing psychedelics through the proper regulatory pathways such as the FDA based on rigorous science, psychedelics can make a massive impact on the healthcare landscape.
The promise of psychedelics in treating so many different diseases has attracted talented, experienced researchers and entrepreneurs focusing on answering this question: how access to psychedelics will change the way we treat the patients who need it the most.
Hear about the types of psychedelics treatments
Hear about the fast moving regulatory environment in psychedelics
Figure 3: Therapeutic Potential
The Opportunity
We are at the intersection of science, regulation, and entrepreneurship that is just beginning to understand how to best integrate psychedelics in healthcare. There is a wave of investment activity right now but, as always, with exuberance comes the need for caution. Many of these treatments will take years and millions of dollars to develop, and more regulation will be required.
This is going to be a difficult path to forge ahead in this new frontier of healthcare. The potential for solving healthcare's biggest challenges is too significant to not take a committed and disciplined long term approach. BVE’s thesis factors in this understanding.
Further Reading: