In 2025, the psychedelic medicine sector reached a more defined phase of maturity, as Big Pharma entry, late-stage clinical readouts, and incremental regulatory shifts began to reshape investor expectations, policy debates, and the direction of research across business, government, and academia.

Business and Investment

Big Pharma joins the sector as key companies push research goals forward 

2025 saw pivotal corporate developments across the major psychedelic medicine companies, uplifting investor expectations and clarifying some regulatory pathways. A slow but steady loosening of regulatory hurdles and positive clinical results have breathed new life into the sector, with some analysts reporting refreshed investor interest and a possible end to the capital drought that has slashed the space in recent years.

Big Pharma giant AbbVie, known for blockbuster drugs in immunology and oncology, agreed to acquire Gilgamesh Pharmaceuticals’ lead experimental therapy, bretisilocin, in a deal reportedly worth $1.2 billion. Bretisilocin is a novel psychedelic targeting major depressive disorder. The event is a signal of Big Pharma entering the space and prioritising shorter-acting serotonin-2A modulators for depression.

Compass Pathways reached a major clinical inflection point, reporting positive results in its first Phase 3 COMP360 trial and accelerating commercial launch planning. CEO Kabir Nath recently told Psychedelic Health that positive talks with the FDA indicate that the company “could potentially be looking at a launch in early 2027” for its flagship program with synthetic psilocybin.

Beckley Psytech, which is supported by Atai Life Sciences secured a Breakthrough Therapy designation by the FDA for BPL-003, a novel intranasal formulation of 5-MeO-DMT, reinforcing regulatory momentum the compound known as “toad venom.” The FDA’s decision follows promising results from a Phase 2b clinical trial, which demonstrated that a single dose of the compound led to rapid and sustained reductions in depressive symptoms within 24 hours, with effects lasting up to eight weeks.

Cybin advanced multiple clinical programs, completing enrollment milestones for CYB004, a version of DMT targeting generalised anxiety disorder and maintaining progress on CYB003, a 5-HT2A receptor agonist similar to psilocybin for major depressive disorder. The company secured financing to extend runway and protect intellectual property across its portfolio.

MindMed reported faster than expected enrollment in its Phase 3 MM120 program, an analog of LSD targeting generalised anxiety disorder, updating timelines for topline readouts and emphasising oral LSD analogs as a differentiated regulatory route. 

Policy and Regulation

Major global players reschedule psychedelics for medical use

2025 marked a year of uneven but consequential movement in psychedelic policy and regulation, with a small number of jurisdictions taking concrete steps toward medical access while others remained in exploratory or preparatory phases.

The UK’s regulatory landscape for psychedelic medicine continued to evolve through policy dialogue and research initiatives, although no formal legalisation or medical scheduling changes occurred. The Royal College of Psychiatrists published a position statement reviewing evidence on psilocybin, MDMA, LSD, and ketamine, concluding that current data are promising but insufficient to recommend routine clinical use outside licensed settings, emphasising the need for more robust trials and caution against premature adoption.

This year, the UK government agreed in principle with key Advisory Council on the Misuse of Drugs (ACMD) recommendations to ease barriers to Schedule 1 psychedelic research. Part of the recommendations included allowing universities and hospitals to conduct research without a Home Office domestic licence, and ethically approved clinical trials to be exempt from additional licensing. Though these changes are not in effect yet, they could be enacted after a pilot program takes place.

Australia continued to stand out as a global pioneer in medical access. Since 1 July 2023, MDMA and psilocybin have been rescheduled from strictly prohibited status to controlled medicines, meaning authorised psychiatrists can legally prescribe them for treatment-resistant depression and post-traumatic stress disorder. From 6 January 2025, new quality standards for MDMA and psilocybin products came into force, requiring compliance for all supplied APIs and finished products. The Department of Veterans’ Affairs approved funding for psychedelic-assisted psychotherapy for eligible veterans, marking a first step toward public payer support.

In Europe, Germany became the first EU country to establish a formal compassionate use access programme for psilocybin, enabling adults with treatment-resistant depression to receive psilocybin therapy at specialised centres under a regulated framework prior to full regulatory approval. This initiative, supported by the German Federal Institute for Drugs and Medical Devices and implemented at facilities in Mannheim and Berlin, marks a landmark step in European psychedelic policy.

The Czech Republic is set to become one of the first European countries to legalise medical use of psilocybin from January 1, 2026. The outgoing government approved legislation late in 2025 allowing psychiatrists and psychotherapists to administer psilocybin for conditions such as cancer-related depression and serious clinical depression when other registered treatments have failed or are not tolerated. Psilocybin therapy will be introduced under controlled clinical conditions at qualified facilities.

In the United States, action remained at the state-level. Oregon and Colorado, having already legalised regulated access to natural psychedelics including psilocybin and launched supervised service programs, continued to refine implementation and data collection frameworks in 2025. Meanwhile, numerous state legislatures introduced bills to advance psychedelic therapy access, and Massachusetts held legislative hearings on psychedelic therapy programmes, reflecting growing political engagement despite the absence of federal reclassification.

Science and Research

New data from real-world applications and feedback from regulatory agencies inform research 

In the academic side of the equation, 2025 consolidated a transition from exploratory efficacy signals to confirmatory, regulation-relevant evidence, while underscoring persistent limitations: small sample biases, variable control conditions, and unresolved questions about long-term safety and scalability.

One of the most significant published findings came from a phase 2 trial in cancer patients, where a single dose of psilocybin combined with therapy produced sustained reductions in depression and anxiety, with many participants maintaining benefits up to two years later. 

Alongside observational outcomes, mid-stage clinical studies have found LSD may ease anxiety symptoms for up to three months in people with moderate-to-severe generalised anxiety disorder, with a significant proportion of participants still in remission at 12 weeks.

For the first time, data from real-world application of psilocybin treatment under a regulated program was published by one of the Oregon clinics providing treatment, sharing insights into how the legal, real-world version of the treatment works, who can access it, and whether the benefits observed in trials translate to broader populations.

Longitudinal data strengthened claims of sustained benefit in selected cohorts. Multiple follow-up reports published in 2025 described durable antidepressant effects at extended intervals after single or limited psilocybin administrations, although most samples remained small and non-randomised. These findings have prompted calls for larger, controlled long-term studies. 

The FDA’s public release of the complete response letter on Lykos Therapeutics’ trials on MDMA therapy highlighted durability and safety questions, prompting re-examination of trial design and participant selection in MDMA and related programmes.

Cambridge Psychedelic Research Group formally launched in 2025, creating a new hub for clinical trials and interdisciplinary research in the UK, including pathways for patient recruitment and academic-industry collaboration.

Illustrated image made using AI tools.

Psilocybin continues to gain momentum as a possible alternative to mental health treatments that leave large numbers of patients without recovery. 

Shortwave Life Sciences is a company that’s currently working on a feasibility study to prove whether psilocybin can be delivered safely, accepted by patients and integrated smoothly into clinical practice, for the treatment of anorexia.

The company presented its most recent findings at the latest edition of PSYCH Symposium 2025, in a panel called “Designing Breakthroughs: A New Human Study for Anorexia Treatment,” led by Chief Medical Advisor Dr. Nadya Lisovoder.

Psilocybin for Anorexia: An Integrated Perspective

According to Lisovoder, anorexia nervosa carries the highest mortality of all psychiatric disorders, driven by both medical complications and suicide.

In an interview, Lisovoder told Psychedelic Health that “the illness itself is exceptionally complex” because “it is a multifactorial condition that involves emotional, cognitive and physiological mechanisms at the same time.”

For that reason, not much therapeutic innovation has been seen in trying to combat the condition since developing a single medicine that can influence all of these layers has been extremely difficult.

“Most traditional treatments focus on one pathway only. In anorexia, that is rarely enough. The psychological patterns, the fear circuits, the rigid thinking styles and the metabolic consequences all reinforce each other. Treating just one aspect does not shift the illness in a meaningful way,” says Lisovoder.

That has led Shortwave to develop an integrated perspective. 

“Our approach aims to engage several relevant receptor systems and neural pathways simultaneously, addressing the mental and emotional dimensions of anorexia in a more complete way,” she told us.

By doing so, Shortwave aims to create conditions that can also support improvement in the underlying physiology, because in this illness the mental state and the physical state are deeply interconnected.

Scientific evidence may support Shortwave’s thesis. A systematic review published in the British Medical Journal in 2024 found that psilocybin could be as effective as escitalopram, a selective serotonin reuptake inhibitor (SSRI), in treating depressive symptoms.

“Psilocybin is considered a promising candidate for conditions defined by rigid cognition and compulsive patterns because it can temporarily soften the fixed neural networks that shape these behaviours,” said Lisovoder.

Research also shows that it creates an increase in neuroplasticity, allowing the brain to form new associations and to respond more flexibly to emotional and environmental cues. In disorders where people become locked into narrow patterns of thought or behaviour, like anorexia, this short period of increased adaptability may provide a meaningful therapeutic opportunity.

These same principles are relevant to anorexia nervosa, where inflexible thinking, heightened fear responses and avoidance-driven routines play a central role.

“Even a modest shift in these underlying circuits can support change when combined with the right clinical framework,” says Lisovoder.

A Unique Formulation 

Shortwave’s plan is to build on the known effects of psilocybin but not rely on it alone. Its formulation includes an additional component intended to influence complementary pathways, reflecting the company’s view that complex psychiatric and neurological conditions are best approached through more than one mechanism.

To administer the treatment, the company is developing a psilocybin-based buccal film designed specifically for patients with severe anorexia nervosa, addressing both biological and practical barriers to treatment.

Patients with anorexia can have their gastrointestinal function compromised. For this reason, Shortwave chose a method of administration that bypasses the gut altogether: a buccal film allows the active components to be absorbed by oral mucosa in the cheek and enter directly into the bloodstream. 

“Non-invasive, easy to administer format increases acceptability in a population that often avoids medications, procedures and anything perceived as forceful,” says Lisovoder. 

Shortwave’s Feasibility Study On Psilocybin for Anorexia

A safe and credible feasibility study in anorexia nervosa must begin with a clear focus on safety, Lisovoder says.

The first aim is to confirm that the treatment can be given without harm, with careful monitoring and a responsible medical framework. Because anorexia involves both medical fragility and deeply rooted cognitive and emotional behaviours, the protocol has to keep the burden on participants as low as possible, supported by a psychiatric and nutritional environment that understands the condition well.

Recruitment is often challenging in this field, which makes partnerships with established eating disorder centres essential. The company is in partnership with Sheba Medical Centre in Israel, whose eating disorders unit is recognised internationally for its clinical and research expertise, with a large and diverse patient population and a highly experienced psychiatric and medical team.

“Having an established collaboration with such a centre allows us to design studies with real clinical insight, consult with leading clinicians, and recruit participants more efficiently and responsibly,” said Lisovoder.

Lisovoder is hopeful for the treatment, beyond the results of the feasibility trial. She says there is a possibility that this line of research could help shift the way we think about eating disorders more broadly.

“For many years, these illnesses have been approached mainly through behavioural and psychological frameworks, which are important but do not fully reflect the underlying biology. The emerging science suggests that patterns of fear, avoidance, cognitive rigidity and altered reward processing all play a role, and that these patterns can be influenced at the neurocircuit level. If we can show that targeted modulation of these circuits contributes to meaningful change, it may open the door to a more integrated model of care,” she told us.

Such a shift would not replace psychological treatment, but rather add a biological dimension that has been missing, concludes Lisovoder

Compass Pathways is one of the companies spearheading clinical development of synthetic psilocybin, the compound naturally found in psilocybin mushrooms. 

Founded in 2016, Compass Pathways built its company around COMP360, a proprietary synthetic psilocybin formulation. Currently ready to begin a second phase 3 trial in treatment-resistant depression, Compass is expecting to potentially lead the first approval of a classic psychedelic by the U.S. FDA.

Psychedelic Health sat down with Compass Pathways CEO Kabir Nath, to discuss the company’s most recent milestones and plans for the future, ahead of the company’s stage appearance at PSYCH Symposium: London 2025, happening at Conway Hall, December 4.

In its most recent quarterly call, Compass emphasized the successful primary endpoint in its first Phase 3 trial, positioning COMP360, as the first psychedelic treatment to reach this milestone in treatment-resistant depression. 

The company reported plans to accelerate commercial readiness, expand provider education, and continue learning from their clinical delivery collaborations to support regulatory submission and launch timelines, underscoring its transition from experimental research toward potential market entry.The company recently announced that based on recent successes and developments, it’s pulling forward the projected launch date for COMP360 by about one year.

“We had a good discussion with the FDA about the potential for a rolling submission and rolling review, which for the psychiatry division would definitely be something they have not historically done,” said Nath.

These measures could put the drug in a fast track status with the FDA, allowing it to reach the market sooner than previously expected.

Nath says that because Compass has already completed enrollment in their second psilocybin study, they’re now looking to have a significant data release in the first quarter of next year.

“That suggests we could potentially be looking at a launch in early 2027,” he said, which would mean a pull forward of roughly one year from previous projections of a launch in 2028.

“We have runway into 2027, so we have cash to see us through all of our phase 3 readouts,” he said.

In its most recent financial results, the company reported having $185.9 million USD (£140.7 million) in cash or cash equivalents.

Dealing With Lykos Therapeutics’ FDA Rejection

Last year, the U.S. FDA rejected an application from Lykos Therapeutics, formerly MAPS, for the approval of MDMA therapy. The event marked a low point in the history of the recent psychedelic renaissance, taking many activists and investors to wonder when one of these compounds would finally reach approval by a major regulating body.

Nath made a point to separate Compass’ pipeline from that of Lykos.

“MDMA is not a classic psychedelic, MDMA is more of a pathogen, and so the therapy component is really important for MDMA, the actual dialog, the interaction with a therapist. For classical psychedelics like psilocybin or LSD, that’s not the case” he said.

While Lykos were trying to get a drug/therapy combination approved, Compass is trying to get a drug with monitoring and support approved. This marks a major difference from how the two companies present their results to the FDA.

Since Lykos was a spin-off from MAPS, which is an NGO working for decades to gather data on MDMA treatment, this could have led to issues around “some of the basics around safety, safety reporting, and collection of adverse events,” said Nath.

While Compass is looking at the U.S. market first, it has designed its studies with scientific advisors from Europe and the UK.

“We know that if these studies are successful, they would meet regulatory standards in Europe, but obviously that would be a separate application,” Nath said.

How Does Compass See Its Role and Influence As a Market Leader?

If COMP360 becomes approved, it will invariably influence the broader psychedelics space since it would be the most significant event since psychedelics came back into mainstream attention for healthcare use, starting in the early 2000s.

How does Compass see its ability to influence the broader market and levels of excitement moving investors and the general audience to become interested in these drugs?

“We are focused on executing this ourselves and, getting COMP360 across the finish line. But I completely recognize that, because we are likely to be the first, by some way, what we do and how we set about commercializing and being successful, is going to influence how others do,” says Nath.

Still, Nath is sure to point out that “the infrastructure that’s already been established for Spravato is actually the infrastructure that most of us in psychedelics will be plugging into.”

That means that treatment with COMP360 could potentially be provided by the same clinics currently providing treatment with ketamine, which means the drug could count with an existing infrastructure of thousands of clinics across the U.S., the UK and Europe ready to provide its treatment.