Shares of psychedelic drug developers rallied sharply in premarket trading on Monday after Donald Trump signed an executive order directing health regulators to accelerate the approval process for psychedelic-based treatments and increase federal research funding. Companies including Atai Life Sciences, Compass Pathways, GH Research, Cybin, Enveric BioSciences, and Definium Therapeutics saw their stocks climb between 5% and 26% ahead of the market open, reflecting strong investor optimism.
The executive order instructs the U.S. Food and Drug Administration to fast-track reviews of psychedelic therapies, including ibogaine, a compound being studied for conditions such as post-traumatic stress disorder, depression, and addiction. Treatments that receive the “breakthrough therapy” designation could benefit from priority vouchers, potentially shortening approval timelines to as little as one to two months, compared to the typical six to ten months. FDA Commissioner Marty Makary indicated that decisions on some of these drugs could arrive as early as this summer.
The administration also committed $50 million in federal funding for ibogaine research, despite its classification as a Schedule I substance in the United States. Robert F. Kennedy Jr. has been a vocal advocate for exploring ibogaine as a treatment for mental health disorders, while analysts such as Andrew Tsai and Brian Abrahams described the move as a significant step toward reducing regulatory uncertainty and validating the emerging psychedelic medicine sector. Lawmakers from both major political parties are also expected to push for broader access to such therapies.
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