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.

This article was made possible thanks to on-site reporting by Sasha Mbilika.

Last week, more than 250 professionals in the psychedelics space gathered at London’s Conway Hall for the third edition of PSYCH Symposium.

Researchers, regulators, investors and thought leaders gathered to discuss the past, present and future of psychedelic medicine in the UK and abroad.

Prof. David Nutt: The Harm of Psychedelics Has Been “Grossly Exaggerated”

Opening Remarks were given by Professor David Nutt, founder of Drug Science, the organisation that partnered with Prohibition Partners in hosting the Symposium.

Nutt shared a quote by Lord Dick Tavern, who has been a major influence in maintaining a sensible public dialogue about science, leading the charity Sense about Science to become the first patron of Drug Science. 

Nutt shared a quote from Lord Tavern: “It may take time, but in a democracy, those who base their case on strong evidence and are prepared to argue for it with conviction are likely to prevail in the end. The sensible policy on the use of drugs is not a hopeless cause”

Nutt said the quote echoes optimism for industry progress and highlights Drug Science’s ongoing role in the field as it recovers from the 1971 UN Convention that banned classic psychedelics worldwide. 

Nutt reported that potentially hundreds of millions of premature deaths result from inadequate mental health care and a decline in research. He continues to advocate for greater awareness, noting that the harms allegedly produced by psychedelics have been grossly exaggerated.

Prof. Nutt and Compass’ Dr. Guy Goodwin Discuss Access To Psychedelic Healthcare

Nutt remained on stage, and was joined for a panel discussion with Dr. Guy Goodwin, Compass Pathways’ Chief Medical Officer. The talk was moderated by Anne Philippi.

Guy discussed the company’s role in bringing psychedelics into mainstream health. Compass’ phase 3 study, recruiting almost one thousand patients, was completed earlier this year. 

The company is currently on track to submit a dossier with the US FDA in mid-2026. Goodwin explained that the FDA is less affected by politics than before and has seen great consistency of performance and messaging.

Goodwin also discussed Lykos Therapeutics’ failure to pass FDA standards for MDMA therapy and said that data published by the FDA on the decision provides a learning opportunity.

After highlighting concerns for veteran welfare as driving forces for some pro-psychedelic policies, Nutt communicated the importance of reframing the cost of mental health treatments to reflect their value.

Nutt said that he sees overall optimism about the future of psychedelics in mainstream healthcare and the potential for significant improvements in mental health treatments. Key challenges for moving the needle on policy approvals include improving the public perception and media coverage of psychedelics, discussing a possible rebrand to “neuroplastogens.”

He also noted the importance of demonstrating the true cost-benefit of psychedelic treatments to the public and regulatory authorities.

Justin Smith-Ruiu: Psychedelics and the Reality of Experience 

The conference’s main keynote was held by Justin Smith-Ruiu, professor of philosophy at Paris Cité University, who recently published “On Drugs,” a book that blends autobiography, intellectual history, and philosophical inquiry to explore the transformative impact of psychedelics on human consciousness and thought.

Smith-Ruiu discussed the potential of psychedelics for philosophical inquiry, offering engaging reflections on his personal experience with psilocybin, which helped him overcome a major depression and influenced his philosophical work. 

He advocates for philosophers to consider the legitimacy of psychedelic experiences in their inquiry.

As part of a series of historical speculations, Smith-Ruiu said philosophers like Descartes and John Locke might have used psychedelics in the 17th century, as evidenced by the historical availability of psychedelic substances like fly agaric and ayahuasca.

He calls for academic philosophers to question their grounds for excluding psychedelic experiences from philosophical inquiry, challenging academic philosophy’s historic exclusions. He noted that between 1925 and 1975, no anglophone analytic philosopher openly admitted to having a psychedelic experience and argues that philosophers should rely on first-person intuition and seek out unusual experiences.

The philosopher questions why modern philosophy has neglected psychedelics as a significant data point in understanding perception and reality.

Smith-Ruiu argues that psychedelic experiences can clarify how we perceive reality and challenge entrenched assumptions about the mind and world. The phenomenological tradition in philosophy values inner experience as a means of accessing the basic structure of reality, he said. First-person reports of altered states can reveal hidden structures of selfhood, time, and meaning.

Panel Discussion: Psychedelics in the Real World —Where Are We Now?

Prof. Michael Lynskey, Researcher at Drug Science, moderated a panel which explored concepts of “real world” drug use, including medical, recreational, and informal use, with an emphasis on equitable access and diverse application, agreeing on the need for inclusive regulatory models to ensure safe, effective psychedelic use.

The panel included Prof. Celia Morgan, Professor of Psychopharmacology at the University of Exeter, Dr. Helena Aicher, Researcher and Psychotherapist at Universities of Basel & Zurich, Prof. Ranil Gunewardene, Director of Evolution MET, and Steve Rolles, Senior Policy Analyst at Transform Drug Policy Foundation

According to the panelists, 99.999% of psychedelic use occurs outside clinical settings and most recreational use is pleasure seeking, involving social settings like parties, raves, or casual gatherings.

Psychedelics demonstrate the first true innovation in mental health treatments in 35 years and have the potential to address treatment-resistant conditions like severe depression and trauma, showing promise for complex mental health cases.

As per real-world cases of legal psychedelic use, the panelists mentioned Australia as the first country to legalize psilocybin and MDMA for therapeutic use. Switzerland has had “exceptional permissions” for psychedelic therapy for over 10 years. Significant regulatory gaps exist between medical, recreational, and wellness-oriented psychedelic use.

In two years of psychedelic treatment in a major Sydney hospital, zero adverse outcomes reported and some patients require multiple treatment rounds (3-6 doses) for complex conditions.Psychedelics have a lower risk profile compared to some conventional medications like Clozapine, the panelists said.

However, challenges exist in the clinical research space. Most clinical trials have rigid exclusion criteria that prevent studying patients most likely to benefit and traditional rating scales often fail to capture the nuanced, qualitative improvements patients experience.

In the UK, there’s a growing underground therapy movement. There’s also increasing interest in community practice models for psychedelic use thought there’s limited formal availability for psychedelic treatment.

The panelists recommend to develop more flexible regulatory frameworks, create harm-reduction strategies, improve accessibility to psychedelic treatments and continue research into diverse application contexts.

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.