Chapter 1: What paradigm shift is happening in mental health care?
So that landscape is different in terms of what you're investing in. You're not investing in a drug that people are going to be taking every day of their life. You're investing in a drug that will hopefully help somebody get unstuck from resistant forms of mental health conditions and then get to start moving on with their life.
That was Keith Kurlander, co-author of the new book, Psychedelic Therapy, a revolutionary approach to restoring mental health and reclaiming your life. I'm Motley Fool producer, Matt Greer. Motley Fool analyst, Sanmeet Deo, recently talked with Kurlander and co-author, Dr. Will Vanderveer, about that psychedelic revolution and the investing opportunities ahead. Enjoy.
Hey, fools. Today, we're zooming out to look at a massive paradigm shift happening in the health sector, one that has profound implication for our culture, our well-being, and the broader economic landscape. So for decades, traditional mental health systems relied heavily on managing symptoms.
But there's a growing movement backed by serious clinical research and FDA trials pointing toward a totally different model. It's moving fast. Just recently, Compass Pathways
which is publicly traded, tickers CMPS, saw its stock jump over 23% after announcing that it's phase three trials for COMP360, the psilocybin treatment, demonstrated a well-tolerated safety profile, and now they're gearing up for the FDA.
So as psychedelic stocks rise on the news, my guests today argue that it's not a hype trade, but rather the kind of the birth of a brand new healthcare category.
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Chapter 2: How does psychedelic therapy differ from traditional treatments?
So today I have Dr. Will Vanderveer and Keith Kurlander, founders of the Integrative Psychiatry Institute and authors of the new book, Psychedelic therapy, a revolutionary approach to restoring mental health and recovering your life. Well, Keith, welcome to the show. Thanks, good to be here. Great to be with you. Let's start right at the foundation.
You know, you argue that the recent surge in stocks like Compass Pathways isn't just a hype trade, but the birth of a brand new healthcare category. So what belief about psychedelic therapy do most people and most investors get completely wrong? And why does this misunderstanding matter?
Well, I would say that one thing investors may not know is psychedelic therapy is an interventional approach, much different than traditional psychopharm interventions where you're, you know, it's not a daily intervention. This is more similar to something like TMS to treat depression where it's like, you know, one to six or whatever amount of times.
So, you know, most investors wouldn't understand that unless they went and really dove in a little bit. So that landscape is different in terms of what you're investing in. You're not investing in a drug that people are going to be taking every day of their life.
Chapter 3: What misconceptions do investors have about psychedelic therapy?
You're investing in a drug that will hopefully help somebody get unstuck from resistant forms of mental health conditions and then get to start moving on with their life. So in that sense, you need to know what you're looking at in terms of if you want to look at things that mimic how these might work in terms of investing in it.
I would add that we don't have a great track record speaking from the perspective of a prescriber, of a psychiatrist, that's me, in terms of getting people through the mental health system and then out the door and putting psychiatry behind them.
What's exciting about this new interventional approach is that you're seeing people getting exposed to a drug, as Keith said, one time, three times, five times with a durable long lasting benefit. And we're talking about a huge market here of treatment resistant conditions.
So, for example, when you look at just treatment resistant depression globally, you're looking at 100 million people who are suffering from that condition, which is one third of the total people dealing with depression on the planet. So it's a big segment of the group of people who are dealing with depression who don't respond to the currently available, currently approved treatments.
Now, taking a step back, because as we're talking about this, I want to make sure that the viewers and our members understand what exactly is psychedelic therapy? What is it replacing? And then what is it doing? Is it a drug? Is it a therapy sessions? Like, what does it involve if, like, let's say they were to undergo these treatments?
Well, what it's not is taking LSD in your backyard and staring at the sky for six hours and playing Grateful Dead. Not knocking that, many of us have been there, but it's not that, right? So it's a little different. So what it is, is you're combining certain medicines that are being studied, psychedelic medicines that are being studied with therapy. And that looks like the therapy has stages.
So you're doing therapy prior to doing the medicine. So you're preparing for this in many different ways. And then you have sessions typically with a therapist in the room during the sessions on the medicine. And then you're doing work after. These medicines are both amplifying a therapeutic process the person is going through.
And then also the medicines are actually working on your brain too, biologically, and doing things there. So you get a two-for-one with this treatment. Whereas, let's say antidepressants, which Will kind of mentioned really briefly, those are working on your brain. You're not pairing them with therapy in the sense where that's enhancing the therapy. So this is very unique in that way.
Yeah, and another dimension of it on the neuroscience level of it is that we are opening up a person's unconscious mind in a way that ordinary therapy doesn't do and ordinary medications doesn't do.
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Chapter 4: What is the potential market size for psychedelic treatments?
And we're firm believers in the view just based on the results that are coming out in these FDA trials is that the keys to the healing often reside inside this unconscious mind that's hard to access, whether it's in therapy or with medications.
So another way to say that is that we're approaching the root cause of the condition by evoking what's inside of you, as opposed to the current approach and how I was trained to medicate depression or PTSD, for example,
is that you use these conventional medications you take every day to suppress your symptoms and that might help you a lot so there's nothing wrong with that but when you stop taking the medications typically sooner or later the symptoms come back so you haven't actually dealt with the root cause that's underneath the symptoms
You know, you described earlier psychedelics is not, you know, taking LSD out in our lawn, listening to, you know, Grateful Dead. How do we get from that fringe counterculture of the 60s, you know, to what that was viewed of psychedelics, LSD, mushrooms, all those, to where we are today, where we're clearing phase three FDA trials?
What was kind of the tipping point that the medical establishment said, all right, this is actually a serious therapy?
I mean, one of the big... issues that we see is the rates of suicide in veterans. So when you talk about how do we get to a tipping point, it's a hard argument to make to get on a soapbox and say, we're taking good care of our veterans. It's hard to argue that because of how much those people are suffering when they get back from combat typically.
We see, for example, in one VA study over the period of time from 2001 to 2014, 30,000 suicides amongst veterans, while during that time we were at war and only 7,000 people were killed in active duty. So when you have suicide rates that exceed four times what's happening in terms of combat deaths, that gets people's attention.
And it goes to show you that we're not treating these conditions well enough. So at that point, it becomes an imperative to take, you could say more risk, to take the risk of going outside of the dominant paradigm or the conventional mindset about how to work with these conditions.
In January of 1915, Ernest Shackleton's ship, Endurance, became encased in the ice in the Weddell Sea. Through determination, grit, and savvy, Shackleton would lead his men through a brutal winter, then over hundreds of miles of Antarctic ice, followed by 800 miles across some of the roughest waters in the world.
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Chapter 5: How do psychedelics work in therapy sessions?
So whenever we get kind of an industry breakthrough like this, you know, investors tend to flood in. It's the next hot thing, the next big thing. And this arguably so can become a very, very big thing. You stated some of the market potential there.
When you look at kind of the suitability as an investment in this industry right now, what are kind of the red flags individual investors should be watching for? I'll kick that to you, Keith.
Well, there's different places you could be investing. Obviously, you can invest in the biopharm companies that are putting out the drugs. And that's kind of the most straightforward thing to be investing in. I mean, I think one thing is, you know, if you're not a biopharm investor, a lot of drugs don't get through their application in phase three. And that's just the reality. So there's that.
You have to look out for that. We had a rejection for MDMA in 2024. Now, I think the positive thing that Compass is going for them is that they did their study in a very different way than the previous study was done on MDMA. The MDMA study had one component to it that is a little challenging for the FDA to understand, which is the therapy. It was a very embedded part of the actual research.
Whereas they really tried to look at the drug effect more so isolated in the psilocybin studies and not look at the therapy as much. And they call it psychological support. So that's a very positive thing to be aware of.
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Chapter 6: What historical context led to the current acceptance of psychedelics?
It's like, you know, there's something that the FDA is going to be able to wrap their head around a little easier for this particular medicine. And then also thinking about a lot of these kind of interventional tools, it's like, where's the service happening? There's going to be a little, a bit of a service, you know, kind of flourishing happening in pockets. So that is an investment.
You know, if you, if you can get into the places that really proliferate this in the beginning, some of the healthcare systems and things that can go well too. a lot of the money to be made might be there where the service actually costs the money. The real revenue is the $10,000, $20,000 treatment versus the five or $800 drug. So that's something to consider.
Yeah, it's interesting you mention that because, you know, when we look at companies, we look for kind of a moat, you know, a competitive advantage that these companies have. Traditional biopharma, you know, they have patents and then those last for a very long time. No one else can produce them.
In this industry, where do you think, and you touched on it briefly, where do you think some of those moats or competitive advantages will be? Will it be like synthetic patents like Comp360, the clinics, the therapy protocols? Where do you think that advantage will be?
I'll take it to you, Will. Well, it's an interesting moment because as we've been talking about, Compass Pathways is ahead of the pack in terms of their trajectory toward the end of phase three with FDA. And we all know that getting first to market is a huge advantage competitively, right?
On the other hand, and this is kind of an interesting irony to keep thinking about and looking into, is that psilocybin, whether it's synthetic or the plant-based one, as a product, as an intervention, is a relatively long experience for the patient and the service center, the clinic, to wrap their head around. We're talking about a five or six hour experience.
So, you know, for a patient and for a clinic staffing set up, it's an all day experience essentially for the patient to get that intervention.
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Chapter 7: How is Big Pharma responding to the rise of psychedelic therapy?
You compare that with some of the other products that are in the pipeline.
So I want to kind of help ground it for listeners. What's kind of a real world story that kind of captures very heart of your argument that you make in your book?
What comes to mind right off the bat is a young combat veteran that we treated in one of our studies. I'll call him Charles. That's the name I gave him in the book. It's not his real name. And I think he was 24 when I met him. And he had done a tour in Iraq and had...
He had a condition that we see a lot in veterans called moral injury, where it's a very specific type of trauma where the roles of engagement, the roles of conduct in the combat theater are not followed. And you bear witness to that. You see your commanding officer doing things that are inhumane or could even be considered war crimes, for example.
And your psyche doesn't know what to do with that because you joined the armed forces for the reasons that most people do, which is because you care about your country and you are there to defend and protect something that you believe in that stands behind you. Not because you have any desire to go out and kill people, right?
But when children are carrying IEDs or luring soldiers into situations and children get killed, there can be a lasting traumatic impact from that.
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Chapter 8: What key message should listeners take away from this episode?
And the sort of nature of moral injury is that you can develop a view that your soul is irredeemable from the things that you witnessed or that you did yourself. So this particular young man went to the VA and did the things that people often do when they get home, they go and seek services. And often they get prescribed a thing called the combat cocktail, where every drug under the sun
antipsychotics, anti-anxiety, antidepressants, mood stabilizers, and so on, often in combination with essentially no benefits. So Charles is just a good example of, you know, many of the young people who come back from war. So he decided to sign up for the study and On the effect of MDMA, he got to have a conversation with his maker.
He's a Christian young man and got to have a conversation about his soul and presented the view inside of his state that he was in to God of, I believe I have a mark on my soul and what does this mean? What happens with MDMA that's very interesting is that people sometimes can access states of self-compassion and a capacity to see the events of their trauma from a sort of 30,000 foot view.
And what he learned in that conversation inside of himself was that as a human being, it wasn't his role to make that judgment about his soul. He remembered and accessed the teachings of his religion, that it was up to God to decide what was gonna happen to his soul, it wasn't up to him. And from there, he was able to forgive himself and what his role was and the things that he saw.
in combat, and he stepped into something that I wanna mention, because it's really important here, is that he began to see that everything that he had experienced in his life, including combat experiences, shaped him to be the person that he is today. And he reflected on, do I love who I am today? Am I acceptable as a flawed human being? Can I accept myself and my flaws? And the answer was yes.
And so he began this journey into what we call post-traumatic growth, where you haven't just gotten to a place where you don't have symptoms anymore, which he did get to that point, but you're going into a place of Who am I? What are my gifts and talents? And how do I give those gifts and talents to the world?
So this is a really under-emphasized aspect of healing from trauma is getting to a place where now you're ready to deliver the goods of who you are in the world. Very powerful.
Yeah. Yeah. And I can only imagine traditional therapy may or may not have helped him ever get to that point. Yeah, that's like the real game changer is that, you know, it's like they could have therapy, but he may have never come across that or realization. Right. Powerful. That's powerful stuff.
And when I hear stories about it, too, I'm kind of blown away by the impact it can have, the positive impact it can have. Yeah. I'm going to take a little shift here and talk a little bit. Now, you have this budding industry that could really radically change antidepressants and that pharmaceutical business model. So how is big pharma reacting to this? Are they fighting the FDA?
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