raised by psychedelics companies in 2024
Quarterly Fundraising Activity in Psychedelics
A chill on fundraising activity that began in 2022 persisted through the end of the 2023 calendar year, but 2024ās roaring start led many to believe that the tides had turned.
Q1 was punctuated by a small crop of substantial rounds. Lykos Therapeutics kicked off the year by announcing a $100m+ Series A (see MAPS PBC Closes $100m Series A, Rebrands to Lykos Therapeutics). That momentum continued as both Cybin and MindMed raised substantial sums via public offerings on the back of FDA Breakthrough Therapy Designation announcements (see Cybin Scores Breakthrough Therapy Designation for Deuterated Psilocybin Analog in MDDā¦; FDA Hands MindMedās LSD Candidate Breakthrough Therapy Designation in Generalised Anxiety Disorder).
While valuations were very modest compared to those seen in 2021, the advent of these larger rounds was a welcome sign for investors and operators alike.
But that momentum was not sustained throughout the rest of the year, with aggregate inflows and average round size reducing progressively since Q1.
Q2 saw investment drop to just over $175M, with notable rounds including Reunion Neuroscienceās $103m Series A (see Reunion Neuroscience Gets a New Lease of Life with $103M Series A to Fund Phase 2 Studies of 4-HO-DiPT Prodrug, but also Tempering Excitement Around Recent Raises, where we reported that the companyās pre-money valuation was allegedly in the single-digit millions); Gilgameshās deal with AbbVie which included a $65m cash injection (see Breaking: AbbVie Inks Deal with Gilgamesh Pharmaceuticals); and, Psyloās first close on a seed round (see Mini Interview: Joshua Ismin, Psylo).
Q3 saw funding slow even further, with inflows down to around $37.5M for the quarter: a 90% decrease since Q1 and a nearly 80% drop from Q2.
That relatively uneventful quarter was punctuated by two notable raises. The most prominent was Soneira Bio, which made a splash as Google co-founder and Trump inauguration attendee Sergey Brin was revealed to be ploughing $15M into the companyās $25M round. (See Sergey Brin Bets $15M on Ibogaine Startup Soneira, But Questions Loom Over Patents).
The second significant round came from Maryland-based Sunstone Therapies, which raised $8.5M. Sunstone is a prominent trial site within the psychedelics clinical research field, including for Beckley Psytechās Phase 2 study of intranasal 5-MeO-DMT for treatment-resistant depression, Usona Instituteās Phase 3 study of psilocybin for major depressive disorder (MDD), and Reunion Nerusocienceās trial of RE104 for postpartum depression.
The year ended on a very slow note, with just $5M flowing into the space through 5 very modest financing events in Q4. Thatās the most uneventful quarter since we began tracking inflows.
Private Psychedelics Company Investment Rounds
Similarly to 2023, all private company fundraising took place at the Seed or Series A stage, with no more mature financings occurring.
Psychedelics in the Public Markets
As in previous years, we compare a psychedelics ETF (PSIL) to the S&P Biotech ETF (XBI) and the S&P 500 (SPY).
While biotech broadly underperformed the broader market by essentially trading flat on the year, publicly-traded psychedelics companies fared even worse. It ended the year around 23% down, while the SPY gained nearly 26%.
But the PSIL ETF obscures lots of variation among psychedelics companies. Some companies felt the pain, like Compass Pathways which ended 2024 down 58%. But others fared better: MindMed, for example, nearly doubled its stock price last year.
And take a look at that massive surge in the ETFās value in early October. That wasn’t caused by a sector-wide catalyst, but rather a bump in Bright Minds Biosciencesā share price. That price increased over 1,500% in October due to another company developing similar candidates to Bright Minds’ being purchased in a $2.6 billion transaction. While that was great news for the company, it didn’t necessarily have read-through for other psychedelic drug developers as the excitement was rooted in its 5-HT2C candidates, not its psychedelics ones (see 5-HT2C Fever: Bright Minds Surges on Longboardās Seizure Drug Success, But Is It Still a Psychedelics Company?). It does highlight how PSILās movement can be heavily influenced by just one constituent companyās share price, however.
And therein lies the issue with using a relatively blunt instrument like the PSIL ETF, which includes companies that many in the field would not deem to be entirely psychedelic. Looking at its current holdings, for example, we see it has an overweight position in Quantum Biopharma, which no longer has a focus on psychedelics, as well as biopharma companies like Alkermes and TMS company Neuronetics.
But AdvisorSharesā Psychedelics ETF (PSIL) is the only psychedelics ETF left in town after the other two ceased to offer their own products due to lack of demand. So, we will continue to use it as a broad indicator of public psychedelics companiesā performance, albeit with these major caveats.
While 2024 was another challenging year for many publicly-traded psychedelics companies, some are hoping 2025 will see greater fortune. Indeed, some companies are already seeing substantial share price appreciation, perhaps in response to RFK Jr.ās confirmation as health secretary, though that fortune is not evenly distributed.
Public Psychedelics Companies by Marketcap
The general image is similar to that presented in our 2023 Year in Review, which showed that five publicly-traded psychedelics companies dominated the field by marketcap.
That number has grown to half-a-dozen now, but as aforementioned Bright Minds Biosciences is primarily focused on 5-HT2C agonists, these days, having seen its stock soar following Lundbeckās acquisition of Longboard Pharmaceuticals (whose lead asset is an oral 5-HT2C agonist).
The total marketcap of these companies is around $2.2 billion, which is very small when compared to single companies in the pharmaceutical space, including two which are now at least partially involved in psychoplastogen or psychedelic drug development (AbbVie, Otsuka).
M&A and Partnerships in Psychedelics
Itās been a slow year on the mergers and acquisitions (M&A) and partnering front, too.
In early January 2024, NASDAQ-listed psychedelic drug developer atai Life Sciences announced a strategic investment ināand collaboration withāits British privately-held peer, Beckley Psytech (see atai Life Sciences Makes $50m Investment in Beckley Psytech).
And, as aforementioned, Gilgamesh Pharmaceuticals announced a deal with AbbVie in May 2024 worth up to $2bn in biobucks, with $65m paid upfront (see AbbVie Inks Deal with Gilgamesh Pharmaceuticals).
In September, it was announced that Psyence Biomedical was planning to acquire psilocybin drug developer Clairvoyant Therapeutics for an upfront payment of just $500,000, issued in shares. By mid-October, however, the company announced it would not purchase Clairvoyant, which has filed for bankruptcy.
In December, Awakn Life Sciences entered into a binding letter of intent to be acquired by Graft Polymer, which then changed its name to Solvonis Therapeutics. The stock now trades on the London Stock Exchange with a marketcap of around Ā£4.5m ($5.6m).
Also in December, Negev Labs emerged from stealth and announced a licensing agreement with the Alexander Shulgin Research Institute (ASRI) and the acquisition of Beckley Psytechās ophthalmology program. The ābiotech company builderā also announced a collaboration with Hadassah Brain Labs to āadvance non-hallucinogenic neuroplastogensā. While the company boasts ā$30M in assetsā, it is unclear whether this reflects the companyās valuation of its in-licensed and acquired assets, cash, or some mix of both.
PĪ±: Despite a promising start, funding for psychedelics-related companies fizzled out in the second half of 2024, with record-low inflows in Q4. On the whole, publicly-traded psychedelics companies were punished by the market, with some companies seeing their share prices cut in half, or worse.
Operators and investors alike hope that 2025 will bring greater fortune, then, and some believe the new administration in the U.S. might help them along the way. That could come in the form of concessions at the FDA that streamline psychedelic drug development or some other regulatory developments; or, it could simply be āvibesā-based, with some prominent figures in positions of power evidently āpro-psychedelicsā.
Even aside from the present political reorientation, some investors are eyeing potential catalysts for the field and are hoping psychedelics companies might benefit from more thematic trends, too. āI think 2025 is going to be a great year for psychedelic & psychiatric drug developmentā, Amy Kruse, Chief Investment Officer at Satori Neuro, told Psychedelic Alpha. āThere’s clear momentum behind psychiatry, both from an individual company view and overall deal making perspectiveā she added, predicting this will continue.
In terms of catalysts, Kruse is keeping her eye on later-phase readouts slated for 2025, telling us she is āextremely bullish that we will see some big winsā and that āit’s a great time to be investing in this area.āĀ ā
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- From VC rounds (seed, A, B, etc.) through to IPOs, private placements, etc. We exclude loans and credit facilities. We also exclude new rounds from companies that have moved away from psychedelics as a core focus, as well as rounds that have not yet been announced publicly.
- Only rounds that have been announced publicly, however, are included here.
