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- Psychedelic drugs have already shown amazing potential to address mental health conditions that affect over 1 billion people
- Numerous multi-billion-dollar treatment markets are wide open for penetration
- But the commercial potential for psychedelic drugs outside of mental health care may be much larger
Psychedelic drugs are our best hope to address the Mental Health Crisis.
Investors in psychedelic stocks have heard that mantra numerous times, from numerous sources – including Psychedelic Stock Watch. It’s true.
Clinical research on these drugs is showing spectacular potential to revolutionize treatment of mental health conditions that currently afflict roughly 1 out of 6 people on the planet.
That’s a huge story in the life sciences space. But it’s becoming a dated outlook.
Why? Because new research on medicinal applications for psychedelic drugs is indicating the potential to address even larger medical treatment markets – generally outside of mental health.
Huge general treatment markets now targeted by psychedelics research
Investors may be skeptical of this claim. In the United States alone, mental health services eat up $300 billion per year, spread across numerous (individual) multi-billion-dollar treatment markets.
However, as the psychedelic drug industry has evolved, it has begun to expand its reach – rapidly. Look at some of the new fields of research being targeted by psychedelic drug R&D.
Each of these treatment markets is larger than the largest (individual) mental health treatment market.
Autoimmune disorders
“Autoimmune disorder” is an umbrella term that encompasses roughly 100 different diseases. These diseases exhibit drastically different symptoms, but are all derived from the same underlying cause: the body attacks and damages its own tissues.
New research into this branch of medicine postulates that these disorders are derived from “psychosocial stress”, which manifests itself in the gut microbiome. Now researchers are exploring whether psychedelic drugs can “modulate” the gut microbiome and “normalize” physiological stress responses.
As with psychedelics-based research into mental health disorders, this research is addressing the underlying cause of (all) these conditions, not merely attempting to treat symptoms. Thus, as with psychedelics-based mental health research, this R&D has the potential to revolutionize the treatment of autoimmune disorders.
Chronic pain
Chronic pain is another gigantic treatment market. It shares similarities with many mental health treatment markets in that existing treatment options have produced very mixed results, and led directly to a “crisis”: the Opioid Crisis.
A 2020 research paper published in Regional Anesthesia and Pain Medicine “proposed a mechanism by which psychedelics may relieve chronic pain1”. Specific treatment markets would include cancer pain, phantom limb pain, cluster headaches and migraines.
This is not a novel theory. Scientists have long believed that psychedelic drugs have potential in pain management. Ketamine, the only widely legal psychedelic, has been used off-label to address chronic pain for many years.
MindMed Inc (CAN:MMED / US:MMEDF) is already in a Phase 2 clinical trial testing the potential of psychedelic drugs to treat cluster headaches. Other psychedelic drug companies are also currently pursuing pain-related applications for psychedelic drugs.
Traumatic brain injury (TBI)
The previous categories of medical conditions are well-established, with long histories of mixed treatment results. In contrast, as with psychedelic drug research itself, traumatic brain injury is an emerging field of medical study.
It is only in recent years that our healthcare system has paid closer attention to TBIs (most notably concussions). Diagnostics have improved and physicians have become much more proactive in addressing these injuries.
But treatment options have not caught up (yet) with the diagnostics.
Dr. Dan Engle, author of The Concussion Repair Manual, is lead researcher with Mind Cure Health (CAN:MCUR / US:MCURF) in its recently announced psychedelics R&D for TBI. Dr. Engle frames the current picture with respect to the treatment of traumatic brain injuries.
“Historically, the treatment options for TBI recovery have been severely limited. Thankfully that is changing, and psychedelic medicine therapy is one of those ripening areas of research and benefit.”
This is a huge-and-growing treatment market.
Unfortunately, many (most?) people will suffer at least one ‘knock on the head’ over the course of their lives that could potentially result in TBI. Currently, patients suffering from these injuries have limited options in recovering.
MINDCURE is hoping that its psychedelic drug R&D can lead to greatly improved treatment outcomes in the future. Dr. Engle expands on this.
“The reason for the excitement here is because this class of medicines (which include ketamine, psilocybin, cannabis and others) are supportive for helping repair both of the underlying ramifications of the injury - neurologic and psychologic. No other class of medicines today has the same potential to positively address both issues simultaneously.”
Psychedelic drugs: a half-century of R&D to catch up on
Research on the medicinal applications of psychedelic drugs was still in its early stages when drug Prohibition slammed shut the door – for roughly half a century. As the failure of the War on Drugs is widely acknowledged, the research door is now wide open.
These drugs are still generally illegal for consumption (even for medicinal use). But as Psychedelic Stock Watch recently explained, prospects for the near-term legalization of some of these substances are better than most investors might think.
That article was focusing purely on the mental health applications of psychedelic drugs. If some of these newer fields of research start to produce similar success in clinical trials, how much additional pressure will that put onto politicians to legalize these drugs – and normalize their usage?
The Psychedelics Revolution has been viewed to date as a revolution in mental health care. But as the industry evolves and the R&D expands and deepens, this Revolution may transform into a general healthcare revolution.
The funding is here.
In the four months immediately following the Compass Pathways IPO, over US$500 million was pumped into this emerging industry.
Commercial revolutions don’t occur very often. When they do, the profit potential from investing is potentially limitless.
The Psychedelics Revolution is now underway. And it may be a much, much bigger Revolution than even the most bullish investors originally suspected.
DISCLOSURE: The writer holds shares in MindMed Inc and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock Watch.
