Is this finally the breakthrough moment for psychedelic therapies? | Transcript

Joe Colletti:  Welcome back to Strategic Alternatives, the RBC Capital Markets podcast. I'm your host for this episode, Joe Colletti, and today we're going to explore the potential for psychedelics in mainstream medicine. In our recent RBC imagine report on psychedelics and neuroplastogens, which was informed by a symposium our research team hosted with industry leaders and key opinion leaders, it makes a compelling case that we're on the cusp of real transformation in mental health treatment, and the barriers to getting there may not be as steep as they might seem. But how close to approval and how practical would it actually be to roll out these therapies to patients right now?

I'm joined by Brian Abrahams, Head of Global Healthcare Research, and Leonid Timashev, Biotechnology Analyst here at RBC Capital Markets. We're here to share the results of some fascinating field work and to help us try to answer these questions. Brian, Leo, thanks for being on the podcast.

Brian Abrahams: Thanks for having us on.

Leonid Timashev: Yeah, thanks for having us.

Joe Colletti: Brian, let's start with the big picture on the current state of play. Psychedelics seem to have been on the brink of a mainstream breakthrough for some time now. What is it that makes you so confident that their time has come?

Brian Abrahams: First of all, depression and anxiety represent some of the largest areas of unmet need in all of medicine. Case in point, roughly a third of patients with major depressive disorder fail to achieve remission even after two or more antidepressant medications. What makes psychedelics so interesting is their potential to fundamentally change this equation. Rather than a daily pill, we're talking about single administration or short course therapies that can offer rapid onset and durable remission, a genuinely new treatment paradigm. Psychedelic drugs were once considered too controversial for mainstream psychiatry, but that's changed dramatically in recent years, as both academic institutions and biopharma companies have moved aggressively into the space with rigorous clinical programs. The clinical evidence is becoming increasingly robust; compounds like psilocybin and LSD have shown statistically significant and clinically meaningful efficacy results with effect sizes larger than traditional SSRIs in certain studies. We're now approaching a truly pivotal moment. Several late stage readouts are anticipated this year, including some that have already happened, and our work in the space has us increasingly constructive. In fact, when we surveyed psychiatrists about which drug classes excite them the most around treating depression, psychedelics ranked second – a remarkable signal of clinician enthusiasm. The policy environment has also shifted. The FDA has published draft guidance establishing a clear regulatory path for late stage development, and the agency has been open and engaged with sponsors in navigating that path.

Joe Colletti: So you've covered a lot of important points there. What else are clinicians and biotechs saying right now? Is what they're saying continue to support your view that this may be a watershed moment for psychedelics.

Brian Abrahams: We think so. In January, we had hosted our psychedelic symposium, bringing together expert KOLs and management teams from several psychedelic and neuroplastogen companies to discuss commercialization strategies, payer perspectives and regulatory insights, and we came away convinced that the commercial challenges here should be very surmountable. Regarding demand, the message was unambiguous. Clinicians anticipate wait lists of many patients eager to try psychedelics, really reflecting the deep unmet need and the strong physician appetite for new options. Capacity-wise, we expect about 1000 high volume centers will serve as the initial prescriber base in year one, leveraging and expanding on the well-established Spravato infrastructure that's already in place. And pricing appears acceptable to payers; they didn't balk at the $30-70,000 annual price range put forth by companies, with efficacy, safety and durability being the key drivers of formula replacement. We do get a lot of questions on intellectual property protection for this class of drugs, just because many of these are older compounds, but we see a meaningful competitive moat against generic entry, including robust rems requirements, the controlled substance regulatory framework, and the operational complexity of psychedelic administration, all of which we think create durable barriers for these drugs even after their initial regulatory exclusivity expires. And on the FDA itself, while the agency will maintain high standards, it does sound open and actively engaged with sponsors in the space. The bottom line from our symposium was that physician interest is high, pricing and reimbursement dynamics are favorable, generic risk is limited, and the regulatory path is increasingly clear, all of which underpins our conviction in the space.

Joe Colletti: So you mentioned the regulatory momentum right now. Should we think about the recent executive order from President Trump on psychedelic treatments for some serious mental illness in the military?

Brian Abrahams: Yeah, so we think the President's executive order on psychedelics, signed back in April, is a meaningful policy signal, and one we view as a substantial step towards diminishing regulatory risk for this emerging therapeutic class. Most directly, it directs the FDA to issue Commissioner’s National Priority Review vouchers to psychedelics programs with breakthrough therapy designation, which several of these drugs already have, potentially compressing review timelines further to as little as two months post filing. And it also creates a “right to try” pathway for eligible patients that could further improve public perception and build momentum ahead of the commercial launches.

The veteran focus is particularly significant given PTSD massive unmet need – 13 million Americans affected with only two approved therapies – and the FDA wasted little time in following up with concrete priority actions, announcing Commissioner’s National Priority Vouchers for three psychedelics programs studying psilocybin and treatment resistant depression, a major depressive disorder, as well as methylone for PTSD.

Joe Colletti: What do you see as the biggest clinical or commercial risks that investors still have to keep in mind?

Brian Abrahams: There are a few important potential challenges for this drug class that are worth understanding. The first is functional unblinding. Because psychedelics produce a distinctive subjective experience, participants in clinical trials can generally tell whether they've received an active drug or a placebo, meaning that trials can't necessarily be truly blinded in the way many drug studies are. That said, this challenge is not dramatically different from other psychoactive therapies. The second is expectation bias. As public excitement around psychedelics has grown, patients entering trials may arrive with heightened hopes, which can inflate placebo response rates, a perennial challenge in mood disorder studies. Companies are countering this by carefully selecting experienced trial sites, instructing personnel not to overpromise on subjective effects, and prioritizing enrollment of patients with no prior psychedelic experience. The third risk, and the one we hear about most frequently from investors, is commercial scalability. Unlike a pill you take at home, of course, psychedelic administration requires in-person supervision during the hallucinogenic experience, which can last for several hours. The concern, therefore, is that without a sufficiently scalable delivery infrastructure, this drug class could be relegated to a small niche market rather than achieving broad commercial reach.

Joe Colletti: So, Leo, you and the team have really explored particularly that delivery challenge head on with some on the ground research. Can you tell us a little bit about how you went about that?

Leonid Timashev: So, what we did was we ran a survey of treatment centers, and these are interventional psychiatry clinics that administer some of the later line therapies for depression, anxiety, PTSD, etc., and these include Spravato, which is going to be the main focus that I'll touch on, as well as some others like ECT and TMS. And the reason that Spravato is relevant here is that it has a number of overlapping properties with some of the psychedelics. Patients have to come into the clinic to get it administered, they have to sit there for a while, sort of a specialty drug with a REMs program, and it has some dissociative properties. And all these will play similarly to some of the things that we see in the psychedelic space. So that's why we focused on these centers that administer Spravato. And there tends to be around 7,000 of them. We surveyed a fraction of them, including clinicians, site managers, nurses, monitors there to better understand, what are they seeing in terms of capacity with Spravato, patient interest, do they need to build out infrastructure? How much spare capacity do they have? You know, in general, we saw that there's resounding interest in the space that they're interested in using psychedelics, they're preparing for them now, building out infrastructure is not necessarily required, but as they do so, use and interest in psychedelics will continue to scale. So, while we see Spravato potentially tripling over time, that's also going to carry through into some of what we'll see with the psychedelics.

Joe Colletti: Are there any caveats to some of the optimism. Are there other things to watch closely that could, you know, hamper, slow that rollout?

Leonid Timashev: This is going to be a new treatment. The paradigm is going to be different. Patients will have to spend more time in a clinic, and, you know, there could be some initial learning curves or hurdles with that that take time to work through. These centers will also have to administer other things, like, as I mentioned, TMS and ECT. And lastly, there's also, you know, structural things that have to be kept in mind. And these will still be controlled substances. Brian touched on some of this, but you know, state DEAs have to be on board. You're going to have to have specialty pharmacies. Ultimately, it's going to come down to what are the REMs look like, what are the monitoring requirements look like, and how much of a burden is this really on the patient to go out of their day and take a psychedelic?

Joe Colletti: But the strong feeling is that the demand will be there?

Leonid Timashev: Yeah, absolutely. I mean, I think that's one of the things we've heard consistently. And this has been coming from some of the physicians that we talked to that, you know, they'll say that they already have patients asking them today if there's psychedelics that they can take. You know, I've heard this from the biotech companies that we cover, there's strong demand, strong interest, and that's exhibited both by patients, by prescribers. It's also seen in the fact that some companies, like Compass, are already signing contracts with interventional psychiatry centers. We've talked to some of these interventional psychiatry centers as well, and they're excited for psychedelics. They see them coming. Some of them are already starting to put out, you know, training materials, learning materials. There's really strong demand, no matter how we measure it.

Joe Colletti: A lot of fascinating insight today. I know we've only scratched the surface. I encourage our listeners to check out your research, check out this report, contact your RBC representative to get access. And I want to thank you both for joining the podcast, and we will definitely have you back again to continue the conversation.

Leonid Timashev: Thanks for having us.

Brian Abrahams: Thanks for having us.

Joe Colletti: Thanks for listening to Strategic Alternatives, the RBC Capital Markets podcast. This episode was recorded on May 14, 2026. Listen and subscribe to Strategic Alternatives on Apple, Spotify, or wherever you get your podcasts. If you enjoyed this episode, please leave us a review and share the podcast with others. See you all next time.