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The stock of several companies working to develop psychedelic medicines to treat mental disorders fell on Wednesday, a day after a U.S. Food and Drug Administration (FDA) advisory committee decided not recommend the use of MDMA as a treatment for post-traumatic stress disorder (PTSD).
During regular trading, Mind Medicine, which is developing a form of LSD to treat generalized anxiety disorder, declined as much as 18%; shares in Cybin, which is studying the use of psilocybin to treat several disorders, initially fell 10%; and shares of Atai Life Sciences, a biopharma company developing a number of psychedelic medicines, dropped as low as 9%.
The stock moves come after the FDA’s Psychopharmacologic Drugs Advisory Committee reviewed a new application from the public benefit company Lykos Therapeutics for its MDMA capsules to be used, alongside therapy, to treat PTSD.
After an all-day session, the committee, made up of independent advisors, said in a nine-to-two vote that current data does not show MDMA is effective at treating PTSD. The committee also voted no (ten-to-one) on whether the benefits of MDMA-assisted therapy outweighed the risks for patients.
Many experts on the panel said the treatment showed promise, however, they took issue with the nature of the clinical trials conducted by Lykos.
Because MDMA produces alterations in mood and cognition, patients know if they received the treatment or a placebo during a trial, making it nearly impossible to carry out a double-blind study. This makes it more complicated for researchers to determine if patients are getting better because of the treatment or a placebo effect. Committee members also raised concerns regarding sexual misconduct allegations from an earlier Lykos trial.
The committee’s votes are non-binding and the FDA still has until August to make a final decision on whether to approve the treatment.
“We are disappointed in today’s vote given the urgent unmet need in PTSD and appreciate that the committee faced a challenging and atypical assignment, which was to evaluate a therapeutic approach that combines drug therapy (MDMA) and psychological intervention,” Lykos CEO Amy Emerson said in a statement. “We remain committed to working with the FDA to address outstanding questions so that we may find a path forward to ensure the responsible and careful introduction of MDMA-assisted therapy into the healthcare system, if approved.”