Shares of firms working on psychedelic-based treatments rallied in premarket trading following an executive order signed by President Donald Trump that instructs health regulators to speed up reviews of psychedelic drugs and to boost federal research funding for ibogaine.
In premarket action, Atai Life Sciences rose 21%, Definium Therapeutics gained 15%, and Compass Pathways advanced 26%. GH Research increased 19%, Enveric BioSciences was up 7%, and U.S.-listed shares of Cybin traded about 15% higher.
The executive order, issued on Saturday, directs the U.S. Food and Drug Administration to fast-track reviews for treatments including ibogaine, a psychedelic compound under study for conditions such as post-traumatic stress disorder, depression and addiction. Under the order, psychedelic drugs that have earned the FDA's "breakthrough therapy" designation would receive Commissioner’s National Priority Vouchers, which could shorten review timelines to roughly 1 to 2 months compared with the normal range of 6 to 10 months.
FDA Commissioner Marty Makary commented on Saturday that decisions on the drugs could arrive as soon as this summer.
President Trump also announced a plan to allocate $50 million in government funding for federal research focused on ibogaine. The compound is derived from a shrub native to Africa and is currently classified in the United States as a Schedule I substance, indicating it is considered to have no accepted medical use.
Market analysts reacted to the order. Jefferies analyst Andrew Tsai described the action as an "official stamp of validation to the class," saying it demonstrates that government support for these therapies is real. RBC analyst Brian Abrahams said the signing represents "a substantial step towards diminishing regulatory risk" for psychedelic drugs.
Health Secretary Robert F. Kennedy Jr. has been an advocate for exploring ibogaine as an alternative treatment for mental health conditions such as depression. In addition, lawmakers from both Republican and Democratic parties have indicated they will pursue legislation aimed at expanding access to psychedelic therapies.
Market context: The executive order and funding announcement have produced an immediate market response among publicly traded psychedelic drug developers, as investors reacted to the prospect of accelerated regulatory timelines and federal research support.