Psychedelics are gaining momentum in depression, with one treating physician predicting that the drug class could “wipe out the SSRIs” if safety and durability hold up.
Buoyed by new findings from Definium Therapeutics and Compass Pathways, the belief in psychedelics continues to rise, as focus moves beyond efficacy to a key differentiator between candidates—durability.
In late June, Definium Therapeutics’ major depressive disorder candidate “exceeded expectations,” according to Stifel, while Jefferies called the late-stage efficacy data “profound.” HCW Research analysts said the Phase 3 win provided “blockbuster data.”
Shares of Definium—formerly known as MindMed—soared on the data, up 97% over the last month to about $45 apiece.
Earlier this week, Compass Pathways’ second pivotal trial confirmed its synthetic psilocybin asset’s durability and validated a multi-dose paradigm for treatment-resistant depression (TRD), according to a July 8 note from HCW Research.
Overall, interventional psychiatrist Gregory Malzberg thinks psychedelics hold “practice-changing” potential, according to a July 5 Jefferies note, even predicting that the class could become “bigger than” Johnson and Johnson’s Spravato, a nasal spray that can be used by itself or with oral antidepressants. Patients already have to come into the office to receive Spravato, with Jefferies writing in a July 6 note that the approved drug’s annualized runrate of over $2 billion in TRD validates the commercial feasibility of psychedelics.
And there’s a market for numerous psychedelic treatments, with Malzberg confirming rapidly increasing patient demand for interventional psychiatry treatments in MDD and TRD.
“Investor sentiment on psychedelics continues to improve, as the overall drug class is generating strikingly positive data,” Jefferies noted. The regulatory landscape has been bolstered by the CNPV vouchers, President Donald Trump’s executive order supporting psychedelic development and official framework from the FDA.
Definium’s widespread wins
Definium’s EMERGE study evaluated a single dose of the oral tablet DT120—a formulation of LSD—and resulted in an 8.1-point placebo-adjusted change from baseline over six weeks on a common scale for depression.
HCW pointed to the “breadth of the win,” noting that therapeutic onset was rapid, and durability was maintained through week 12. The drug’s safety profile was clean and efficacy was also observed in a subpopulation with severe MDD.
“EMERGE delivers the first pivotal validation of DT120’s rapid, durable, drug-only paradigm while easing concerns on safety, suicidality and treatment-session logistics,” HCW analysts wrote.
This validation means analysts and investors can look beyond just therapeutic effect and consider marketability questions about the drugs, which can involve long trips and intensive patient monitoring.
“Session-dynamics data were also commercially encouraging, with average time to end-of-session checklist clearance of 5.8 hours, 57% of patients cleared by hour 5, and all cleared by hour 8, which is meaningfully better than the full-day clinic-burden bear case,” HCW analysts said.
Beyond MDD, HCW views the Definium trial as derisking the biotech’s general anxiety disorder (GAD) franchise and regulatory path. Definium’s lead program is testing DT120 in GAD, with late-stage findings from the VOYAGE and PANORAMA trials expected later this quarter. The company has not yet filed for a new drug application (NDA) with the FDA.
Definium’s MDD results directly challenge “the three core bear arguments” against DT120’s commercial viability: that efficacy may not be reproducible, that safety could complicate broad use and that an extended in-clinic session would be too arduous to scale, according to HCW.
From a regulatory perspective, “EMERGE strengthens the totality-of-evidence argument for DT120,” HCW said. “We believe that if VOYAGE and PANORAMA can confirm the franchise effect in GAD, DT120 could become one of the most differentiated late-stage psychiatry assets in development.”
Stifel analysts echoed HCW’s faith in the program, raising their target price for Definium to $60 per share after the “better than expected” data release “largely de-risks the program” and creates a larger revenue opportunity than previously modeled. In the July 7 note, Stifel assumed an 80% likelihood of approval for DT120 in both MDD and GAD.
Collectively, Stifel projects a more than $4 billion peak opportunity for the asset—which is in line with how revenues are trending for J&J’s Spravato (esketamine), which became the first and only standalone monotherapy for treatment-resistant depression (TRD) in January 2025.
In the Jefferies note, psychiatrist Malzberg dubbed DT120’s MDD data as a “complete game changer.” If safety risk stays low and payer coverage is favorable in MDD, Malzberg said, the psychedelic could “wipe out the SSRIs.”
Reshaping psychiatry
Definium isn’t alone in its potential to rewrite the treatment landscape. Patients may very well have their choice of psychedelic.
For example, Compass’ fresh data found that 39% of patients who received two fixed 25-mg doses achieved over 25% reduction in depression symptoms by the sixth week, which was maintained for six months. The analysts deemed the 26-week data assessing COMP360 as the “durability gate” that serves as a key derisking event for the program and bolsters a commercial construct in TRD.
“Together with a clean 26-week safety profile, the update confirms rapid onset plus durable, reproducible benefit across two large controlled trials in a highly chronic population,” HCW wrote.
A psychedelic with three-month durability is “infinitely easier” than Spravato, which clears the body after a few days. Meanwhile, six-month durability plus favorable safety could be “bigger than Spravato,” and reshape psychiatry, Malzberg said.
Malzberg added that he believes patients will “line up” for COMP360 if it gets FDA approval. The fresh data will bolster Compass’s rolling submission and position the program to potentially become the first approved psychedelic therapy, with a launch in TRD targeted for early next year. The asset has secured an FDA Commissioner’s National Priority Voucher (CNPV), and HCW called the regulatory path to market for COMP360 “comparatively low-risk.”
An earlier-stage psychedelic asset targeting depression is AtaiBeckley’s BPL-003, an intranasal formulation of mebufotenin benzoate, according to Jefferies. With a shorter 2-hour delivery duration, the asset has shown differentiated Phase 2b data in TRD and secured FDA Breakthrough Therapy designation last fall.
A lot still rides on the upcoming readouts. Plus, widespread adoption will depend largely on the FDA’s safety monitoring restrictions, plus staffing requirements, reimbursement for longer monitoring sessions and real-world patient safety, according to Jefferies.
But analysts across multiple firms say the drug class’ ability to deliver fast and consistent efficacy is shifting the industry’s perception of psychedelics, with depression the near-term market entry point and additional indications likely to follow.
