Following the U.S. Food and Drug Administration's approval of Johnson & Johnson's "ketamine-like nasal spray for depression," European investors in technology gathered for the biggest private financing round for a psychedelic biotech medicine company, ATAI, according to CNBC.
Recent research into mind-altering psychedelic medication has investigated the treatment's ability to battle mental illnesses such as addiction, post-traumatic stress disorder, and depression. In the 1960s, after psychedelics became widely popular for recreational use, the U.S. government labeled most of them as "drugs of abuse" with little value. But recent clinical studies have shown otherwise: some psychedelics, either alone or in combination with traditional forms of therapy, can help patients, especially those who found all other forms of treatment ineffective.
And in light of the recent findings, investors have their eyes on the budding industry. On Tuesday, German firm ATAI Life Sciences announced that it has gathered over $40 million in new financing. The round made ATAI the most valuable company in the young industry with a valuation of $240 million, CNBC reports.
The German company currently funds clinical trials for what it labels as "formerly stigmatized compounds," such as psilocybin, the compound found in psychedelic mushrooms, and arketamine, a variation of ketamine. ATAI is also the biggest backer of a start-up called Compass Pathways. The start-up is preparing to be the first legal seller of psilocybin on the market.