The shifting fortunes of corporate psychedelia

Abstract

This article traces the shifting fortunes of for-profit psychedelic medicine through two phases: a boom from 2016 to late 2021, followed by a bust that continued through late 2024. It argues that the forces driving this cycle are best understood through the concept of capitalization, which links present valuations to investor expectations about future earnings. Engaging the capital-as-power framework, the article situates psychedelic companies within the broader biopharmaceutical sector, showing how the volatility of drug development is intensified by the unruliness of these substances as capitalized assets. This unruliness stems from a range of factors, including murky intellectual property claims, unpredictable and intense subjective experiences, and lingering cultural stigma. During the boom, firms attracted significant interest from venture capital and other investors by promising revolutionary breakthroughs in mental health treatment. As expectations rose, so did valuations. But disappointing results from clinical trials, regulatory setbacks, and deepening doubts about the ability to control and standardize psychedelic therapies led to sharp declines in investor confidence. Analyzing financial performance alongside investor narratives, the article underscores the tensions involved in subjecting these unruly substances to the logic of capitalist power.