Papers of makers of psychedelics to treat PTSD soar after Trump's executive order

Quotes of psychedelic drug developers jumped by at least 15% at the April 20 premarket, Seeking Alpha noted. This happened after US President Donald Trump signed an executive order aimed at accelerating research and expanding patient access to psychedelics for the treatment of post-traumatic stress disorder (PTSD). Wall Street is calling it a turning point for the sector.

- British Compass Pathways, whose capitalization on Nasdaq is about $640 million, jumped the most. Its American Depositary Receipts (ADRs) for shares rose more than 27% to $8.5. That's the highest since early April 2024.

- Shares of U.S. biotech AtaiBeckley, with a market capitalization of less than $1.5 billion, rose nearly 18% to $4.74, the highest in nearly six months.

- Definium Therapeutics, which specializes in developing therapies for neuropsychiatric diseases, added about 17% to $26.45. This is the maximum since the end of 2021. At the close of trading on April 18, its capitalization was about $2.3 billion.

- Securities of Irish GH Research with capitalization of $1.1 billion jumped on Nasdaq by a little less than 17% to $21.4. The shares were more expensive at the end of 2022.

- Canadian biopharmaceutical company Cybin, whose capitalization on the Nasdaq is $1.4 billion, rose a subpar 15% to $6.3 a share, its highest since early March.

On Saturday, April 18, Trump signed an executive order aimed at speeding up research and expanding patient access to psychedelics, which are intended to treat PTSD but are not currently used in the U.S., Bloomberg writes.

"Today's executive order ensures that people suffering from debilitating symptoms will finally have a chance to reclaim their lives and live happier lives," the agency quoted the U.S. president as saying.

According to this document, the US industry regulator FDA is obliged to develop a mechanism that would allow patients to access experimental psychedelics before they are registered in the country. This includes drugs based on ibogaine, a psychedelic compound extracted from the iboga plant, which grows in Africa and is used to treat depression, anxiety and PTSD in military veterans, according to a Bloomberg article. This hallucinogen is now considered a controlled substance of the strictest Schedule I and is banned for use in the U.S., the agency notes.

The executive order signed Saturday also provides $50 million in federal funding for ibogaine research.

The executive order will remove legal obstacles preventing U.S. researchers, scientists, and doctors from properly studying psychedelic drugs, said U.S. Health Secretary Robert F. Kennedy Jr. who Bloomberg describes as an ardent supporter of psychedelic therapy. The secretary said he, like Trump, is "disturbed" by the fact that U.S. veterans have to travel to Mexico and other countries to experiment with the drugs.

CNBC notes that Trump had his top health care officials in the Oval Office with him when he signed the executive order, as well as conservative podcast host Joe Rogan and former military man Marcus Luttrell, whose memoir of the Afghanistan mission was the basis for the movie "Lone Survivor." Rogan said he sent Trump a message with information about ibogaine and the president responded, "Sounds great. You want to get FDA approval? Let's do it."

The executive order also requires the regulator to provide national priority vouchers for psychedelics. The U.S. introduced the vouchers in 2025 to speed up approval of drugs critical to the country. Next week, the regulator will issue them for three psychedelics, CNBC writes. It calls this the first time a regulator has offered accelerated approval for psychedelics. The article also states that the FDA is taking steps to prepare for the first-ever human clinical trials of ibogaine in the United States.

Compass said it is already "actively working" with the FDA to file a registration application for its psychedelic, which recently completed the last phase of clinical trials.

Oppenheimer analyst Joe Olson called Trump's executive order "a structural turning point for the U.S. psychedelics sector," Bloomberg writes. Olson is optimistic about the prospects for AtaiBeckley, Compass Pathways and Definium Therapeutics.

Jefferies analyst Andrew Tsai wrote in a report that thanks to concerted action by several executive branch agencies - the presidential administration, DHS, FDA and Department of Veterans Affairs - "investor attention [to psychedelic manufacturers] should increase significantly ahead of potential approvals in 2027-2030," Seeking Alpha writes. Tsai believes that "the path to commercialization of the drugs could become even faster."

RBC analyst Brian Abrahams says the decree "accelerates the development of psychedelics as a key treatment for mental illness," according to a Seeking Alpha article.