All signs point to the rise of psilocybin technology. This raises questions regarding the size of the future psilocybin industry. How much will psilocybin products cost consumers? How much will a pharmaceutical company profit from psilocybin products? How much will investors make from psilocybin companies?
Psilocybin Gaining Traction as Safe and Beneficial Drug
Psilocybin, a molecule found in magic mushrooms has recently earned considerable attention for its potential therapeutic value. This renewed interest has resulted from studies demonstrating the safety and efficacy of psilocybin for treating some of the world’s most intractable mental health problems, such as “treatment resistant depression,” addiction, post-traumatic stress disorder, anxiety, etc.. See generally recommendations from Johns Hopkins University Scientists for rescheduling psilocybin.
Value of the Psilocybin Market
The psilocybin market is presently in its infancy. Due to the legal and political climate over the past 50 years, very little research and development has been done in the space. However, the psilocybin industry has already started to emerge. And all signs suggest that it will rapidly gain traction and grow. (Remember cannabis?)
Arguably, COMPASS Pathways is the present leader in adopting a pharmaceutical strategy for developing psilocybin products. COMPASS is making synthetic psilocybin and conducting clinical trials with pure synthetic psilocybin. From COMPASS’s work, we are able to gain insight into the present cost of psilocybin. But there is very little information about the size of the psilocybin market once psilocybin becomes available as a therapeutic.
In the United States alone, Treatment-resistant depression (TRD) costs employers up to $48 billion each year, according to a study published in The Journal of Clinical Psychiatry. Arguably, a drug effective in treating a $48 billion dollar problem would have significant potential in the marketplace. In addition, the depression medication market is expected to grow from $14.5 billion in 2014 to nearly $17.0 billion by 2020.
According to Bloomberg, Atai Life Sciences AG (a major investor in COMPASS) is pursuing a listing on the Canadian Stock Exchange next year. Bloomberg reports that Atai will seek a valuation of $800 million or more.
The Multidisciplinary Associate for Psychedelic Studies (MAPS) led by Rick Doblin is looking to the future and seeing MDMA as a prescription drug, possibly as soon as 2022. To that end, MAPS has created a for-profit corporation to sell prescription MDMA. Communications Director for MAPS, Brad Burge, says he predicts MAPS will make $30 million over the first three to five years. Burge adds that MAPS will reinvest the $30 million into research on LSD, ayahuasca, and psilocybin to add more to the knowledge base toward their eventual legalization. When those compounds become legal medicines, that tens of millions of dollars in investment could turn into hundreds of millions of dollars.
According to a March 2018 article on Quartz, psychedelic researchers like Matthew Johnson of Johns Hopkins University pay between $7,000 and $10,000 per gram for psilocybin. That’s about 13 times the street price for dried magic mushrooms, depending on their psilocybin content.