It's all go in the Australian world of psychedelics right now. Just a few months after the government greenlit two game-changing drugs for therapeutic use, their market value has been revealed to the world. Not only is it a jaw-dropping figure, but we think it might be a bit on the small side...
We've been all over the psychedelics and mental health story from the very beginning, keeping you abreast of every twist and turn in the drugs' journey from hippie hobby to healthcare revolutionary, questioning the real cost of psychedelic therapies, and even trying one or two ourselves...
Earlier this year, the Australian Therapeutic Goods Administration (TGA) made a significant move towards making MDMA and psilocybin more accessible for medicinal purposes. As of 1st July 2023, the drugs will be down-scheduled from Schedule 9 ‘Prohibited Substances’ to Schedule 8 ‘Controlled Medicines.’
This paves the way for these substances to be used in mainstream medicine and treat conditions such as Post-Traumatic Stress Disorder (PTSD) and depression. Importantly, this only applies when prescribed by a qualified psychiatrist and used therapeutically in a controlled medical setting.
WATCH: Not quite ready to hit the shrooms? Start with cold water therapy instead.
This week, a long-awaited valuation of the potential size of the psychedelics market was finally revealed to the public. According to Peter Widdows, the director of Incannex – global leaders in the development of medicinal cannabinoid compounds and psychedelic therapies – the market opportunity for MDMA and psilocybin in Australia could reach $2 billion.
A massive figure, but only a drop in the worldwide ocean: on a global scale, the market could be worth around $63 billion. With such a large market opportunity, Incannex is preparing to launch the first psychedelic-assisted psychotherapy clinic in Melbourne during the third quarter of this year.
The clinic in question has been designed as a commercial-scale prototype and can treat 600+ patients per year inside of normal working hours, with the potential to treat even more if those hours are able to be extended through additional staffing and licensing arrangements.
Incannex has plans to expand its clinic offerings to other locations, with Sydney being the first target outside of Victoria, followed by other major cities such as Brisbane, Adelaide, Perth, and the Gold Coast. The company also has its sights set on the international market, where and when regulations permit...
Psilocybin – aka Magic Mushrooms – has also been cleared for clinical use. Image: Bloomberg
Besides Icannex (ASX:IHL), other ASX stocks that have a stake in psychedelics include Althea Group Holdings Limited (ASX:AGH) and MGC Pharmaceuticals Ltd (ASX:MXC). With the rapidly growing interest in the medicinal use of psychedelics, more companies are expected to enter the market in the very near future, so keep your eyes peeled.
What's crucially important to remember, however, is that the true potential value of psychedelics reaches far beyond their monetary value. There is a real community need for these treatments. Depression, PTSD, and anxiety all have a significant impact on society and are running rampant in Australia.
Trials of these treatments have shown hugely promising clinical results, and if companies like Incannex are able to provide high-quality treatments at scale (that still prioritise the wellbeing of their patients rather than just turning a quick buck) then there's real potential not only for their lives to be transformed but for society at large to feel an enormous benefit. Watch this space...
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