Psychedelic Nation? Psilocybin Treatments Offer New Hope for People Prozac Hasn’t Helped

OpenAI CEO Sam Altman, once a “very anxious, unhappy person,” credits a psychedelic experience at a weekend-long retreat with helping him become a new man.

He’s not unique among Silicon Valley luminaries: Some of the 21st century’s most famous tech innovators, from Steve Jobs to Elon Musk and Sergey Brin, have reportedly sought out such experiences, too (on the record, or otherwise).

In fact, using psychedelics is increasingly en vogue among C-suite types, even serving as the basis for new age corporate retreats. While medical professionals warn that psychedelics, once the villains in horror stories about the dangers of drug abuse, still carry risks, decades of academic research grant substantial scientific weight to claims that they possess healing properties. 

Now, the pharmaceutical industry, and, more importantly, its regulators, appear ready to bring psychedelic drugs into the mainstream of Western medicine. In April, the White House issued an executive order directing the US Food and Drug Administration (FDA) to fast-track the review process for psychedelic drugs, which research suggests could be highly potent for treating mental health disorders, particularly for the large swaths of patients who haven’t benefited from existing medications and therapies. By most estimates, as many as 30% of patients diagnosed with major depressive disorder have proven treatment-resistant.

“A sitting president giving psychedelics-as-medications prioritized attention in the Oval Office is essentially without precedent,” Sabune Winkler, a lawyer and founding member of the Psychedelic Bar Association, told The Daily Upside.

In the months since Trump’s order, the industry has turned a corner, with a recent pair of promising late-stage clinical trial results propelling it further toward legitimacy. Investors have taken notice. The AdvisorShares Psychedelics ETF, which tracks companies exposed to psychedelic drugs, has surged more than 35% in 2026 and more than 60% in the past 12 months.

In other words, to use the parlance of mental health experts, the psychedelic drug industry may be on the verge of a “breakthrough.” The pharmaceutical industry and its investors simply label it an opportunity. Still, experts told The Daily Upside, the burgeoning industry faces barriers to both commercialization and widespread patient access.

What the Science Says

While psychedelic treatments are perhaps most commonly associated with psilocybin, the naturally occurring psychoactive compound in so-called “magic mushrooms,” they now harness an array of substances, both naturally occurring and otherwise. For instance, ibogaine, an alkaloid found in an African root shrub, was shown in a landmark Stanford University study in 2024 to have been an effective treatment for veterans with post-traumatic stress disorder. Peyote-sourced mescaline is also a commonly used naturally occurring compound, while drugs built off of synthetic compounds such as methylone, MDMA and LSD are working their way through the pipelines, too.

The science behind the various psychedelic substances tends to be similar, with the various compounds interacting with the human brain in a notably different way than the selective serotonin reuptake inhibitors (SSRIs) like Prozac and Zoloft that dominate the antidepressant market today. While SSRIs require daily doses to regulate serotonin levels in the brain, psychedelics engage the brain’s serotonin receptors more directly, creating new brain cells and new brain wave connections in a process called neuroplasticity.

Shroom For Improvement

“[Psychedelic drugs] give both the psychedelic experience, which is huge for many individuals, but it’s also causing these new brain connections to change,” Dr. Andrew Coop, a professor at the University of Maryland School of Pharmacy, told The Daily Upside. “There’s a physiological change as well as the psychological aspect.”

The difference in how the treatments interact with the brain aligns increasingly with shifting scientific consensus on the causes of mental health disorders, long attributed to chemical imbalances.

Proving the effectiveness of psychedelics to treat mental health conditions in clinical settings has proven somewhat difficult, however. For starters, maintaining an effective placebo group is inherently difficult with a drug expected to deliver an observable psychoactive experience. Meanwhile, psychedelic drugs are typically designed for therapy-assisted use, a framework that experts said the FDA’s modern approval process is not necessarily designed for.

“A key component of the success of these medications is that therapy side of things,” Dr. Coop said. “The FDA approves drugs; they don’t approve therapy.”

Order of Magnitude

Trump’s April executive order is a sign that the system might be ready to change to accommodate the emerging field. Days later, the FDA issued national priority vouchers intended to expedite the drug approval process for three promising players in the field: Compass Pathways, Transcend Therapeutics and the Usona Institute.

In February, Compass announced stellar results from its Phase III trial of COMP360, a psilocybin-based drug designed to help with treatment-resistant depression. On the same day it received the national priority voucher in April, Compass said the FDA granted its rolling review request for COMP360, potentially clearing the way for it to become the first “classic” psychedelic cleared for the US market. Shares of the company have soared more than 100% this year, with analysts expecting sales of COMP360 could begin as early as the first quarter of next year.

Billion-Dollar Question

“Compass deserves a lot of credit for achieving positive Phase 3 data in depression, which is a genuinely significant milestone for the field,” Dr. Joseph Tucker, CEO of Enveric Biosciences, told The Daily Upside.

Recent weeks have delivered more positive news for the field. Definium Therapeutics, for instance, announced similarly positive Phase III trial results for its LSD-based drug known as DT120 ODT in June. Its shares have exploded more than 90% in the past month.

“Compass asked, and apparently answered, the question, ‘Can psilocybin work?’” Dr. Tucker said. “Definium’s approach is addressing that next critical question of ‘Can we get the same kind of benefit in a way that’s easier to deliver to patients?’ That’s the million-dollar, actually the billion-dollar, question.”

At least two pharma giants have already bet a billion dollars on getting a good answer. In October 2025, AbbVie acquired Gilgamesh Pharmaceuticals’ lead psychedelic drug candidate, bretisilocin, which is designed to treat major depressive disorder while compressing the psychedelic experience into as few as 60 minutes, for as much as $1.2 billion. RBC Capital Markets analysts said the acquisition signaled that the sector was “approaching a tipping point.”

“Companies like AbbVie don’t make acquisitions of that size for fun,” Dr. Tucker said. “They do it because they think there’s a real opportunity, and they are willing to take some risk to try to capture the first-mover advantage.”

Last month, Otsuka Pharmaceutical followed suit, acquiring the priority voucher-approved Transcend in a deal also worth around $1.2 billion.

Scheduled Maintenance

The industry isn’t entirely in the clear yet. Despite the executive orders, most psychedelics remain Schedule I controlled substances under US law, with violators subject to felony charges and prison terms.

That remains “the most fundamental legal hurdle” for the industry, Winkler said. “[The Schedule I classification] creates a Catch-22 that pervades every dimension of this industry, including the ability of the government to enable and fund research.”

Meanwhile, intellectual property law offers a whole host of challenges. US patent laws are not designed for historically criminalized fields, nor are they specifically designed for naturally occurring elements. Separately, the law also must wrestle with concerns about cultural appropriation and biopiracy of treatments using psychedelic compounds that trace their roots to Indigenous ceremonial practices.

“The question that I think will define the next decade is, ‘Who benefits?’” Winkler said.

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