Heading into an FDA hearing on Monday regarding the future of psychedelic treatments, public comments show wide support for further exploring the therapeutic potential of these compounds—to match rising support within the agency.
A highly anticipated FDA hearing to discuss psychedelic drug development on Monday is preceded by robust public support for the class and the Trump administration’s efforts to allow more of them to reach the market, according to analysts. It also directly follows the appointment of FDA leaders expected to be friendly to the emerging drug class.
“We think key stakeholders already sound supportive,” Jefferies analysts wrote in a note to clients last week, adding that this list includes patients, doctors, interventional psychiatry centers, the FDA and Department of Health and Human Services (HHS), the White House and Veterans Affairs (VA). “An engaged/constructive ecosystem should benefit the potential psychedelic launches in 2027+.”
The first potential launch could belong to Compass Pathways’ psilocybin-based depression candidate COMP360, which is widely expected to receive FDA approval via the new Commissioner’s National Priority Voucher program by the end of this year or in early 2027. Jefferies analysts previously stated they were 75% to 85% confident the regulator would approve the treatment based on Phase 3 data released in July that showed durability.
Monday’s FDA public hearing will include discussion of provider training, patient safety, access issues and best practices for data collection and standardization of psychedelic medications.
It follows a series of decisions and remarks from FDA officials intended to loosen restrictions on once illegal substances for the purpose of exploring therapeutic use, as well as regulatory incentives that expedite the process for companies in the space. In July, the FDA released updated guidance for psychedelic drug developers, addressing key challenges associated with running clinical trials of these compounds.
The psychedelics space got another wave of momentum last week when the FDA appointed Michael Davis and Karim Mikhail as directors of the Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER), respectively. Prior to the September 8 announcement, both men had been leading those divisions in an acting capacity.
In a note to investors on Tuesday, RBC Capital Markets said Davis’ appointment “would likely be positive,” for CNS and neuropsychiatry, as the new CDER director has prior experience with psychedelic development as part of a non-profit. Companies with near-term reviews before the FDA, such as Compass and Definium Therapeutics, plus those in rare disease, and novel modality companies, could benefit in particular.
Definium has reported a spate of positive late-stage data this year for its oral LSD candidate DT120, which is in development for generalized anxiety disorder (GAD) and major depressive disorder (MDD).
Davis, along with other FDA leaders, published an article in The New England Journal of Medicine on Sept. 9, entitled “FDA’s New Framework for Psychedelic Drugs.” The piece addresses “the ongoing mental health crisis” in the U.S. and highlights the effects of MDD and post-traumatic stress disorder (PTSD) on veterans and the economy.
“One potential avenue for the development of better treatments includes psychedelic compounds,” the authors wrote.
Between stints at the FDA, Davis served as chief medical officer at Usona Institute, a medical research organization studying the safety and efficacy of psilocybin and 5-MeO-DMT for mental health.
From a commercial perspective, the Jefferies analysts expect psychedelics to build on the success of Johnson & Johnson’s esketamine-based depression treatment Spravato, which reached $584 million in sales in the second quarter with potential to surpass $2 billion for the full year. While J&J has previously told BioSpace that it does not consider Spravato to be a classic psychedelic, analysts often look to the drug as a barometer for the market. The psychedelics space is in a decent position to play a bigger role in years to come, Jefferies said.
With President Donald Trump’s executive order in April directing HHS and FDA to support advances in psychedelic drug development and regulation, Monday’s hearing implies those efforts have hit the next phase, “reassuring us the coordinated ‘federal effort’ is not just rhetoric,” the analysts added.
Psychedelics have been at the heart of several acquisitions in the Big Pharma arena in recent years, matching growing interest from the public, the medical community and regulators. These include, most recently, Eli Lilly’s up to $3.8 billion purchase of AtaiBeckley in July, AbbVie’s $1.2 billion Gilgamesh Pharmaceuticals buy in August 2025, and Otsuka’s acquisition of Transcend Therapeutics, worth more than $1 billion with milestones, which closed in June.
