Psychedelic drug developers rally after Trump orders FDA to expedite reviews

By Kamal Choudhury

April 20 (Reuters) - Shares ‌of psychedelic drug ​developers rose ​on Monday after U.S. President Donald Trump signed an executive order directing health regulators to speed up reviews of psychedelic treatments and increased federal ‌funding for their research.

Shares of AtaiBeckley jumped 28% in morning trading, while Compass ⁠Pathways climbed 37%, Enveric BioSciences surged 140% and GH Research rose 24%. Definium Therapeutics gained 4% while ‌U.S.‑listed shares of Cybin were up ‌about 5%.

The executive order, issued on Saturday, requires the U.S. Food and Drug Administration to fast-track reviews of psychedelic compounds such as ibogaine, which is being studied to ​treat mental health conditions including post-traumatic stress disorder, depression and addiction.

The order directs the agency to give Commissioner's National Priority Vouchers to psychedelic drugs that have the "breakthrough ⁠therapy" tag, potentially cutting the review time to one to two months from the usual six to 10 months.

Trump also ​said the government would allocate $50 million for federal research into ibogaine.

Executives across the psychedelics industry welcomed the decision, saying clearer federal support could ​help accelerate research and responsible clinical use.

Oppenheimer analysts ‌called the development "a structural inflection for the U.S. psychedelics sector," while Jefferies analyst Andrew Tsai called it the administration's "official stamp of validation to ⁠the class (of drugs)."

FDA Commissioner Marty Makary on Saturday said decisions on the drugs could come as soon as this summer.

Ibogaine is derived from a shrub native to Africa and is classified as ⁠a Schedule I substance in the U.S., meaning it is considered to have no accepted medical use.

According ​to RBC analyst Brian Abrahams, the signing of the executive order is "a substantial step towards diminishing regulatory risk in this emerging class of therapies, enabling investor comfort."

Tom Feegel, CEO of Beond, an ibogaine-focused ‌treatment provider, said the Trump administration's move marks "a historic inflection point" that puts the psychedelic on the national agenda and "not as a ‌fringe concept."

Health Secretary Robert F. Kennedy Jr. has championed using ibogaine as an alternative treatment for ⁠mental health conditions such as depression.

Lawmakers ‌from both Republican and Democratic ​parties have also said they would pursue legislation to expand access to psychedelic therapies.

(Reporting by Kamal Choudhury in Bengaluru; Editing by Sahal Muhammed and ‌Diti Pujara)

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