By Andy Serwer

At a private dinner this past week in New York City hosted by The Wall Street Journal, former Vice President Al Gore and Australian ambassador to the U.S. Kevin Rudd, along with a group of business leaders, hashed out the latest on climate change, artificial intelligence, and politics. But what seemed to worry the two politicians and others as much as anything is our mental health.

Yes, it's safe to say that more Americans than ever have issues these days, or recognize that they do, or both.

According to a recent Gallup survey, more than 47 million U.S. adults, or 18%, report currently having, or being treated for, depression, up some eight percentage points since the initial measurement in 2015. While mental health is improving at American universities, according to a University of Michigan study, some 37% of students received therapy or counseling in the past year, and 30% took psychiatric medication -- rates that have held consistent since 2021.

And while we may be a nation divided over the causes of the horrific, endless wave of shootings in this country, it's unassailable that mental illness plays a part. It's also the case, however, that more Americans are aware of mental-health issues and treatments available, and that the Affordable Care Act expanded insurance coverage.

Net net, there's unprecedented demand for treating mental-health issues -- and a number of companies in the business of doing just that. For a variety of reasons, though, these companies have a mixed record, since the business of mental health is a complex, riven ecosystem intertwined with insurers and regulations.

Broadly speaking, companies in this business fall into one of several categories: mental-health-care services, which run clinics or treatment centers; companies that offer digital or virtual care; and pharmaceutical companies producing psychiatric drugs.

Acadia Healthcare operates hundreds of bricks-and-mortar facilities that treat patients with mental-health disorders and substance-abuse issues. Recently, the company has faced federal investigations over improper billing, which contributed to the stock falling from $89 in November 2022 to about $23 currently.

On Wednesday, activist investor Engine Capital released a letter to Acadia management disclosing a 3% stake and calling for sweeping changes, writing, "We invested in Acadia because of its leading position in the fragmented behavioral health market, the opportunity to meaningfully improve operations and capital allocation, and our belief that the shares are deeply undervalued. It is clear from our research that the need for behavioral health services across the country is acute and will continue to grow." The stock jumped 10% on the news.

Lifestance Health Group runs a hybrid business of in-person outpatient centers and telehealth care. The company's stock plummeted from over $28 during Covid to $5 currently. Lifestance, which has suffered from excessive turnover of medical staff and difficulty in navigating payments from insurers, has increased revenue and had its first profitable quarter as a public company this year. UBS recently maintained its Buy rating and $9 price target.

Talkspace, which provides online therapy and psychiatry services through a subscription-based model, went public via a special purpose acquisition company, or SPAC, in 2021, climbed briefly over $12, and now trades for $2.60. The company received a warning from the Nasdaq that it was at risk of being delisted but for now has avoided that fate, shifting from a direct-to-consumer model to partnering with employers and insurers.

Teladoc Health owns BetterHelp, a large online counseling platform and a significant part of its business. A darling of the Covid era, its stock hit $308 in February 2021 but now trades for $8.15 with a market capitalization of $1.4 billion. BetterHelp has seen weakness due to strong competition and high customer acquisition costs.

Many of the biggest pharma plays in mental health are embedded in large companies. Eli Lilly, which has soared because of its GLP-1 weight-loss drugs, makes antidepressants Prozac and Cymbalta as well as Zyprexa to treat antipsychotic disorders, while Johnson & Johnson sells drugs for depression and schizophrenia.

An intriguing facet of mental-health pharma, though, is a parcel of smaller, speculative companies engaged in developing psychedelic treatments for depression, anxiety, and addiction, using psilocybin (known as "shrooms" by the recreational crowd) and LSD. They include ATAI Life Sciences and Compass Pathways, both backed by billionaire Peter Thiel and his Founders Fund, as well as Mind Medicine. Over the past year, ATAI has been winning the stock market race, up 347%, while Mind Medicine has handily beaten the S&P 500 index and Compass has lagged behind it.

For better and for worse, it seems likely that demand for many of these businesses won't go away anytime soon.

Write to Andy Serwer at andy.serwer@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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September 26, 2025 10:21 ET (14:21 GMT)

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