
In 2024, Lykos Therapeutics looked set to have the first psychedelic approved by the US Food and Drug Administration (FDA), an MDMA therapy for post-traumatic stress disorder (PTSD). However, the regulator rejected the drug’s approval application, sending ripples through this field.
Other companies in the psychedelic drugs sector then started to see if they might stumble over the same hurdle. Both psychedelic and botanical drugs are being heavily investigated in mental health indications, including depression, anxiety, and PTSD. Despite advancements in the space, including the release of guidance by the FDA on best practices in psychedelic trials, there are still no therapies approved.
Amir Inamdar, CMO of psychedelic biopharma Cybin, says: “Unfortunately, they [Lykos] paid the price for being first, and they learnt. The regulators learnt with them. The regulators asked them to do something and most of it, they did, but some, they did not. Fortunately for us, however, this is where it pays to be a follower; being second or third in the space gives us the opportunity to learn from that rejection.”
Companies adapting trial designs to avoid complications
Inamdar explains that Cybin was already adapting their trials before the Lykos rejection. The company’s Phase III programme for CYB003, a deuterated psilocin analogue for major depressive disorder (MDD), has been designed in closed discussion with the FDA to ensure they are aligned with the agency. “I’m pleasantly surprised with the collaborative nature of those discussions with the agency. The agency is really trying to help sponsors, and most of us are adapting,” Inamdar explains.
One issue that faced Lykos was functional unblinding, which occurs when patients or investigators can guess what treatment the patient is receiving because of the drug’s effects. Given that psychedelics have an impact on consciousness, perception and cognition, this can make it much easier for a patient to determine they are on the therapy.
Many mental health trial endpoints are based on patient-reported outcomes (PRO). Individuals who realise they are on the therapy or have a high expectation of these therapies may report more positive outcomes.

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By GlobalData“The combination of high patient expectations and functional unblinding makes trials challenging,” adds Inamdar.
Not only could patients report higher benefits, but this bias could also extend to clinicians, especially if they want the therapy to be approved. This was a central criticism of Lykos’s Phase III trial design for its drug. This is particularly problematic with psychedelics because their effects are so dramatic, making it obvious to the researcher if a patient has received the study drug.

This challenge creates barriers for researchers as it becomes nearly impossible to run a gold standard randomised, placebo-controlled, double-blinded trial (RCT) as it becomes quickly unblinded. While this is a real barrier in late-stage trials, it is not one limited to psychedelics, explains Dr Dan Karlin, CMO of psychedelic biotech MindMed.
For example, benzodiazepine, a central nervous system depressant approved for anxiety, panic disorders, insomnia, and seizures, has effects that a patient would be able to recognise when on the therapy. Despite these challenges during the study, the drug was still approved by the FDA, with Karlin therefore believing that the issue of functional unblinding is a challenge the psychedelic field can overcome through more intuitive trial designs.
Joel Stanley, CEO of botanical drug developer Ajna, says the company is developing a daily dose of an exogenous serotonin-like molecule of psilocin, the active compound responsible for the psychedelic effects of psilocybin. This allows them to run the trial in the same way other antidepressants are trialled, in a standard RCT model, as there is no psychedelic experience with the drug.
Ajna will, however, meet this issue soon. “I’m very grateful to people like Lykos for pioneering this placebo issue with psychedelic-assisted therapy because our fourth drug in the pipeline will be going through it,” Stanley adds.

Temporary solutions do exist
A common way of blinding is using an active comparator, but because no psychedelic therapies are yet approved, this is not possible. Once they are, companies will likely use these in trials to avoid further functional unblinding issues.
In the meantime, Cybin is trying to overcome this challenge by using a dose-ranging approach. This comprises a separate Phase III study to the RCT with a low-dose version of the study drug. The lower dose should have little to no noticeable cognitive impact on patients, but will allow investigators to see if there are low signals of efficacy in patients who may believe they are on a placebo.
“The purely placebo control study is good for gathering the safety data, and the dose-ranging approach allows you to compare a difference in dose-response and the intermediate dose,” Inamdar explains.
Karlin says that MindMed is following a similar approach in its generalised anxiety disorder (GAD) study of MM120, a pharmaceutical formulation of lysergide d-tartrate (LSD), which uses central raters to assess the primary endpoint. In this case, the person doing the efficacy assessment is distinct from the investigator in the room during dosing and is not privy to the randomisation.
Other complications also hindering psychedelic drug trials
Functional unblinding is not the only issue faced by psychedelic developers. Another is a lack of qualified sites and therapists.
“Experienced sites are saturated. On average, sites doing psychedelic studies are running between eight to ten clinical trials concurrently,” says Inamdar. In such trials, each patient needs a separate room, and some trials can take 8–10 hours or an entire day, he adds.
This can make it very difficult to enrol a large number of patients at a site, but regulators require robust datasets for approval, meaning these studies can take much longer to conduct.
In a psychedelic study, a psychotherapist with the correct credentials is needed in the room, primarily to ensure patient safety, says Inamdar. These credentials are needed even when the psychotherapist is only there to observe. Sites contract these experts, but it can be very difficult to get availability, as they need to divide their time between other clinical studies and their own practice, he adds.
Even if a site can get a psychotherapist, for a long-term study, therapists may drop out so the trial has to pause at the site until another can be secured.
“That is becoming such a huge challenge right now and a big bottleneck… We more or less predicted the biggest bottleneck would be therapists, and this is slowing down trials and will continue to slow down trials,” concludes Inamdar.
Correction: This article has been updated to reflect the comments of CMO of Cybin Amir Inamdar.