Psychedelic stocks declined Wednesday after advisers to the U.S. Food and Drug Administration failed to back the drug MDMA to treat patients with post-traumatic stress disorder.
Mind Medicine (MNMD) fell as much as 13%, COMPASS Pathways plc (CMPS) declined around 10%, and Atai Life Sciences (ATAI) is down 9% following the news.
It marks a setback to the field of psychedelic treatments. The panel voted 10-to-1 against the first MDMA-based PTSD treatment as it is felt that the benefits did not outweigh its risks.
According to reports, nine members believe the available data did not show its effectiveness in PTSD patients. In addition, it was said that a lot of the panel's discussion focused on how the trials were conducted and issues regarding the design and data collection.
The FDA does not need to follow the advice provided by the advisers. However, they usually do. The FDA is expected to make its final decision by August.