We’ve been reporting on controversial investment star Cathie Wood making the move into psychedelics. Her ARK Genomic Revolution ETF has begun buying into Atai Life Sciences, reaching over 3 million shares of Atai in July alone.
Now the team at ARK have released a full report on the psychedelic sector and investment landscape.
The report is pretty in-depth, giving us the usual look at trial costs and market size projections, but also digging into estimated and comparative prices of future treatments, an analysis not often presented to public audiences and retail investors.
Overall it’s a solid report by analysts experienced in innovative new sectors. With recent industry notes by KPMG and Morgan Stanley, this new report by ARK will help in spreading the word about psychedelic medicine as legitimate investment opportunity.
See below for some highlights and click here to read the full article.
With only one clinical trial in Phase 3, psychedelic pharmaceuticals are in the early stages of clinical exploration. The next graph depicts the number of trials involving psychedelic compounds in each phase as of the second quarter, 2022. In our view, conservatively, their combined sales could reach $5.5 billion per year by 2030.
ARK estimates that, in 2022, the annual pharmaceutical sales opportunity associated with these indications in the United States is $44 billion, or ~3.1% of the total economic burden.
While the cost projections above may seem high, the data suggest that Psilocybin has advantages in durability, safety, and efficacy relative to other treatment options for patients with MDD. Moreover, Psilocybin has the potential to alleviate burdens associated with the direct and indirect costs to the healthcare system.
We projected that Psilocybin sales could reach nearly $1.4 billion dollars per year at a price of $4,300 dollars per dose. However, this projection was made using conservative assumptions about patient eligibility and psychiatrist acceptance. …While $1.4 billion might be a reasonable sales estimate for Psilocybin as a treatment of TRD and more severe MDD, it seems possible that the uses of Psilocybin will expand to more moderate forms of depression as psychiatrists recognize its efficacy relative to SSRIs, which today represent a $15 billion dollar market in the United States. The clinical data suggest that Psilocybin is more effective, and scientists continue to reveal ways in which the neurophysiologies of many common mental health conditions overlap.
Through this lens, the psychedelic movement might be less a triumph against cultural stigma than a revolution in neuropharmacology. We believe psychedelics could usher in a new era of neuroscience in which the insights gleaned through functional neuroimaging over the last twenty years will be leveraged to solve some of the long-standing public health issues associated with mental illness.