Reminder: The Psychedelic Value Chain
Before we dive into our analysis of the financial health of the psychedelic sector, let’s take a moment to review what we’re even talking about when we discuss psychedelic businesses.
Part of our Year in Review series
The Psychedelic Value Chain
There are many ways of segmenting the nascent psychedelics sector, but we find a value chain to be the most useful (and, to be frank, simple) way of doing so for the purpose of providing a high level overview. Of course, there are also many levels of granularity at which the segments themselves can be disaggregated. Here, we present the broadest version of our psychedelic value chain:
It’s also worth pointing out that, unlike many value chains, it’s not entirely linear. For example, we place ‘Manufacturing’ after drug discovery and development, given that any medium- or large-scale manufacturing businesses will only be sustainable following the successful development of a drug1.
You will also notice that we focus almost exclusively on the legal, regulated side of the psychedelics space: i.e., the development of drugs and therapeutics, with the ultimate goal of bringing a drug to market via established pathways (e.g., FDA approval). While we do cover psychedelic drug policy reform, we do not attribute a significant portion of our business coverage to businesses operating in decriminalised settings (see the red value chain segments, for example).
To make this value chain more concrete, below are a number of companies2 operating in each segment:
Drug Discovery and Development
The vast majority of psychedelics companies operate within this segment, which is also the most capital intensive.
This is a sample of organisations working in this segment.
Manufacturing
While there’s a small market for supplying researchers and drug developers with (c)GMP psychedelics, it’s not yet large enough to sustain a large crop of manufacturers. As such, some of these companies are also engaged in drug discovery and development or non-psychedelic manufacturing.
This is a sample of organisations working in this segment.
Technology
A growing crop of companies are looking to employ technology in the delivery of psychedelic-assisted therapies: from tailor-made Electronic Health Record (EHR) providers through to Virtual Reality software that hopes to guide people through psychedelic sessions and integration.
This is a small sample of organisations working in this segment.
Provider Training
Psychedelic-assisted therapy training providers are skilling-up facilitators and therapists across a number of emerging markets: from decriminalised and legalised contexts (as seen in Oregon, for example) through to highly regulated contexts like those seen in clinical trials.
This is a small sample of organisations working in this segment.
Clinics & Care Delivery
Given the fact that psychedelic-assisted therapy’s outcomes are thought to be determined, to some extent, by the set and setting in which the drug is administered, dedicated clinics and care delivery organisations are seeking to build the physical infrastructure for further scale-up of this unique offering.
This is a very small sample of organisations working in this segment.
Consumer Packaged Goods
In decriminalised, legalised, or underground markets, consumer packaged goods companies sell a range of products: from psychedelic truffles through to microdosing capsules.
This is a very small sample of organisations working in this segment.
Psychedelic Retreats
Retreats in jurisdictions like Jamaica and the Netherlands offer a variety of psychedelics-focused itineraries.
This is a very small sample of organisations working in this segment.
Psychedelics Companies vs. Companies that Offer Psychedelics-Related Services
Note that all of the above companies can be deemed to be psychedelics companies. That is, they operate exclusively—or, almost exclusively—‘in’ psychedelics. As such, this representation belies the fact that we expect non-psychedelics companies and organisations to become increasingly involved in psychedelics as they inch closer towards potential approvals and adoption.
Take, for example, Otsuka’s McQuade Center for Strategic Research and Development, which has entered into a collaboration with psychedelic drug developer Mindset Pharma (more on this later in the Review); or contract manufacturing organisations (CMOs) like Onyx Scientific, which produced MDMA for MAPS and entered into an exclusive manufacturing contract with COMPASS Pathways. MAPS PBC, meanwhile, has selected MMS (a large CRO) to develop its New Drug Application (NDA) for MDMA-assisted therapy for PTSD.
We provide further analysis of public psychedelics companies later in our Year in Review.
Part of our Year in Review series
This content is part of our 2022 Year in Review, which looks back at the past year through commentary and analysis, interviews and guest contributions.
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