The executive order signed by U.S. President Donald Trump to accelerate psychedelic drug development is fueling expectations among related pharmaceutical companies for increased capital attraction. However, researchers caution that the arrival of genuinely new therapies remains a distant prospect.
Interviews with nine company executives and investors indicate the order is expected to shorten administrative review timelines and improve coordination mechanisms between the U.S. FDA and the Drug Enforcement Administration (DEA). Multiple companies noted that fresh funding is still largely aspirational at this stage. Yet Joseph Tucker, CEO of psychedelic developer Enveric Biosciences, revealed that following news of Trump's order, the company successfully raised $5 million. Dane Stevens, CEO of Optimi Health, stated that the company received a flood of inquiry calls almost immediately after the order's announcement, with potential investors seeking deeper insights into the sector. "Once there's movement at the executive order level, the phone starts ringing off the hook," he said.
On the research front, seven individuals involved in studying the medical value of psychedelics pointed out that any new therapy must first complete expensive and time-consuming research. Most psychedelics remain in early-stage development, with market approval far off. Professor Gul Dolen of the University of California, Berkeley, commented, "I am cautiously optimistic, but not ready for a victory celebration." Her research focuses on how psychedelics can reopen "critical periods"—windows of heightened brain plasticity that aid in relearning behaviors and healing trauma. When the FDA declined to approve Lykos Therapeutics' MDMA-assisted therapy for PTSD in 2024, it highlighted slow development progress and trial design challenges. Notably, in April this year, the FDA granted fast-track designation to three companies researching psychedelics for mental health conditions—Compass Pathways, Usona Institute, and Transcend Therapeutics—seen as a signal of shifting regulatory attitudes.
On the investment side, Saad Shah, co-founder of Noetic Fund, noted the sector has historically attracted capital primarily from family offices and high-net-worth individuals. He hopes the executive order, by reducing regulatory uncertainty, will draw institutional investors like sovereign wealth funds and public pension funds, as it suggests credible government backing for the industry. Noetic Fund has invested in several psychedelic companies, including Compass Pathways, Definium Therapeutics, and AtaiBeckley. Sri Teja Mullapudi, Noetic's scientific lead, pointed out that faster FDA engagement could save clinical-stage companies "tens of millions of dollars," compressing parts of the review cycle from 10-12 months down to just 1-2 months.
However, investors believe the benefits will not be evenly distributed. Late-stage development companies with breakthrough therapy designations or key data are most likely to benefit first from expedited or priority reviews. For early-stage companies, Matthias Serrebrynski, co-founder of PsyMed Ventures, described the impact as "somewhat ambiguous" but overall positive, as more investors may now view psychedelics as an investable sector.
From the corporate perspective, Robert Barrow, CEO of Definium Therapeutics, stated that faster regulatory processes can enhance efficiency and reduce waste. The company is developing an LSD-based therapy for generalized anxiety disorder. Notably, the executive order directs the DEA to initiate scheduling of controlled substances upon receiving late-stage clinical data, without waiting for FDA approval—a move expected to significantly accelerate timelines. The DEA's scheduling determines a drug's control level and prescription eligibility. U.S. authorities have recently moved to reclassify cannabis to lower research and investment barriers. Srinivas Rao, CEO of AtaiBeckley, noted that the order's emphasis on improving FDA-DEA communication on trial protocols and site approvals could shorten development time by "several quarters." The company is developing BPL-003, a nasal formulation of 5-MeO-DMT for treatment-resistant depression.
Concerns remain regarding payment pathways, and risks associated with ibogaine require particular vigilance. Some researchers noted that due to the government's historical opposition to psychedelics, funding for related treatments has been difficult to secure. Removing regulatory barriers opens doors for more independent research. Serrebrynski of PsyMed pointed out that while the order may speed up reviews, it does not clearly address reimbursement hurdles for psychedelic therapies under insurance. "Who pays? That's an unanswered question; the executive order doesn't provide a complete answer," he said.
Clinical experts warn that enthusiasm should not overshadow risks, especially concerning ibogaine—a potent psychedelic derived from the African iboga plant, prominently featured in Trump's political advocacy. Veteran groups and addiction treatment advocates have promoted it as a potential therapy for PTSD and substance use disorders, but companies are far from bringing ibogaine-based treatments to market, with most research still in preclinical or early development stages.