After decades of being stigmatised and shunned, psychedelic drugs are making a comeback.

The Australian Therapeutic Goods Administration (TGA) has just released an independent report that found psychedelic drugs could potentially be used to treat treatment-resistant mental illnesses – when used in closely supervised clinical settings, with intensive professional support.

The independently reviewed report is TGA’s direct response to an application it received last year to enable psychedelics to be used on patients with mental illnesses.

The TGA will now assess whether it will down-schedule MDMA and psilocybin from prohibited (Schedule 9) to controlled (Schedule 8) drugs, with a decision set to be announced in December.

Mental illness rising globally

The TGA’s decision comes at a critical time as the world grapples with an ever-increasing rise in mental illness cases since the pandemic began.

According to a study by Harvard University, mental health disorders have risen exponentially but the development of new standard medications has not kept pace.

As a result, the study says that alternative medicines like psychedelics will grow at a robust rate of 14.5% CAGR to fill the gap, and reach a value of $6.33 billion in 2026 from $3.21 billion in 2021.

Another study conducted by Yale University on mice determined that one dose of psilocybin will immediately increase neural connections in the brains, helping it to “reorganize and adapt” to different situations.

“There’s a lot of research into how psilocybin can be used in the treatment of treatment-resistant depression, for obsessive compulsive disorder, to help people come to terms with an end-stage illness, for substance use disorders,” said the director of psychedelic research at Edith Cowan University, Dr Stephen Bright.

The US FDA has made an early move, designating MDMA as a ‘breakthrough therapy’ as early as 2017, but has so far not legalised its use beyond scientific purposes.

If the TGA does down-schedule psychedelics to a Schedule 8 (controlled drugs), it will put the drugs on par with medicinal cannabis, which has already been designated Schedule 8 in Australia since 2016.

ASX companies in the psychedelic space

Emyria (ASX:EMD)

The company has recently secured the rights to a University of Western Australia (UWA)’s library of more than 100 novel MDMA analogues, where the initial focus on drug discovery will be on PTSD.

Emyria is currently undergoing it first psychedelic-assisted program to assess the safety, efficacy and cost-effectiveness of MDMA-assisted psychotherapy in treating patients with PTSD.

Emyria has in the past said that substances such as psilocybin and MDMA offer a promising new approach to treating major mental illnesses that are resistant to first-line treatments.

Incannex Healthcare (ASX:IHL)

The company is currently pursuing a Phase 2a clinical trial, and developing “Psi-GAD” psilocybin therapy for Generalised Anxiety Disorder (GAD).

Incannex says around 300 million people globally are estimated to have an anxiety disorder, and GAD is often more severe and intractable than other anxiety disorders.

The Phase 2 trial will involve 72 patients to study the safety, efficacy and tolerability of psilocybin-assisted psychotherapy.

Incannex has also filed a registration statement with the US SEC as it prepares for a listing on the Nasdaq under the ticker symbol “IXHL”.

Creso Pharma Limited (ASX:CPH)

The company is one of the leading players in the psychedelic space through its Canadian subsidiary, Halucenex.

Halucenex is currently preparing a Phase 2 trial to study the efficacy of psilocybin when used for the treatment of treatment-resistant PTSD.

This follows the approval of a Controlled Drugs and Substances Dealer’s Licence granted by Health Canada back in August.

Securing the licence has made Halucenex one of only a few companies globally with the Dealer’s Licence, allowing it to work with psilocybin and other psychedelics under Health Canada’s directive.

Little Green Pharma (ASX: LGP)

The company has just received an approval from the WA Department of Health to produce the psychedelic drug being trialled in the treatment of mental illnesses such as PTSD and anxiety.

LGP has now established a special purpose subsidiary to conduct its psychedelic business, and will start manufacting psilocybin from its WA production facility.

The company is also currently engaged in extending its GMP licence to cover the psilocybin manufacture.


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