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Psychedelic companies are betting big on ketamine as the next Prozac

Kristine sat in a reclining chair, cocooned in an eyeshade and headphones, with a weighted blanket covering her lap. Incense burned in the background. She felt a pinch in her arm. “Okay,” the nurse said. “Have a nice trip!”

Kristine peeled back her eye mask. “How long does it take to kick in?” she asked.

“About 45 to 60 seconds,” the nurse said.

“Okay, then. I’ll see you later,” Kristine said, bringing the mask back down and letting the ketamine take effect.

Kristine’s 45-minute-long ketamine trip, which took place last May at a clinic in New York City, is part of a new approach to mental health care, one that employs once-verboten psychedelic drugs.

For decades, a privileged few researchers have been charting the success of drugs like MDMA (known in clubs as Molly or ecstasy), LSD (acid), psilocybin (“magic mushrooms”), and ketamine (“Special K”) in treating depression, anxiety, and substance abuse. But in the past five years, psychedelics have made a cultural quantum leap.

In 2017, the Food and Drug Administration granted MDMA a breakthrough designation for the treatment of post-traumatic stress disorder (PTSD), putting it on a fast track for approval that some expect as early as 2023. The following year, writer Michael Pollan published his book How to Change Your Mind, on the transformative power of psychedelic drugs. An instant best seller, it spawned a following of devotees who have helped soften psychedelics’ image over the years. Meanwhile, recent clinical trials have shown that psychedelics can offer relief to people suffering from some of the most persistent mental health issues, including PTSD and treatment-resistant depression, or depression that is unresponsive to medication.

But only one of these psychedelic drugs is currently legal throughout the country. Already approved as an anesthetic, ketamine has become the first big test of psychedelic therapeutics, with a rash of clinics and companies cropping up to capitalize on the fact that it can be prescribed off-label for treatment-resistant depression. Unlike with MDMA or psilocybin, there’s less agreement among researchers on the best way to use ketamine for depression. Some studies show that it positively impacts mood without therapy; some psychiatrists insist that it needs to be paired with psychotherapy sessions to be truly effective. As a result, there are no clear guidelines on how to utilize the drug.

That hasn’t stopped ketamine clinics from opening. Though there isn’t hard data on the number of clinics now taking patients, one study estimates there were 300 in the U.S. in 2018—a number that has surely exploded since then. In New York City alone, there are now 20 healthcare brands offering ketamine therapy, some with multiple locations in the city.

In 2021, investors poured $708 million into 65 companies in the psychedelics space.

They are part of the growing wave of psychedelic-based therapy. In 2021, investors poured $708 million into 65 companies in the psychedelics space, according to Pitchbook data. Much of that money has gone into pharmaceutical companies intent on making patented psychedelics that can provide a more controlled experience—and offer more profits—than their predecessors. Some of these companies also have clinics through which they plan to administer their own drugs, which, while not illegal, certainly raises some ethical questions. (Imagine Pfizer opening sexual health clinics that prescribe Viagra.) On top of that, the leaders of some of these psychedelic startups aren’t therapists or doctors. They’re more like Pollanian psychonauts who think that psychedelics—with ketamine at the forefront—should be as accessible as Prozac.

“I think most people will benefit from psychedelic-assisted therapy,” says Ronan Levy, cofounder and executive chairman of Field Trip. His 2-year-old Toronto-based startup has both a pharma arm and a network of nearly a dozen mental health clinics that dispense ketamine across the U.S. and Canada, and one in Amsterdam. After raising $21 million from private investors, Field Trip went public on the Nasdaq last July as a special purpose acquisition company, or SPAC.

It was in Field Trip’s New York City clinic that 50-year-old Kristine embarked on her first ketamine trip. She got there after decades of depression and waves of suicidality, which were ultimately resistant to medication. Her most recent downturn came after her son slid into a deep depression in January 2021. He had come home from college and was feeling uncomfortable in his homogeneous Connecticut hometown. On top of that, he and his girlfriend had broken up. “Wouldn’t everything just be better if I weren’t here?” he had said to his mom. As she tried to help him, she felt herself being sucked into the void, too.

“You can commiserate with somebody, you can join them in their space, but now you’re both just gonna spiral into the abyss? That wasn’t healthy,” she explains, sitting in a wingback chair in her home, the afternoon sun hitting her cheek.

Her son had mentioned that he was interested in trying ketamine therapy. There was even a clinic in Connecticut. Initially, Kristine thought the idea of using psychedelics for depression was too out there. She connected her son to a psychiatrist who put him on antidepressants (Kristine was also taking medication for depression), but he sank lower. And so did she.

By the time Kristine came around to the idea of trying ketamine, her son had lost interest. She started looking into clinics for herself and settled on Field Trip. The company’s Manhattan office looked transcendent, and she had read that the setting was an important part of the experience.

After an initial health screening, she was assigned to a licensed marriage and family therapist. At their first meeting, the therapist talked with Kristine about her mental health history and what she hoped to get out of the treatment. Kristine said she wanted relief; she didn’t want to feel tired just from existing. She wanted to be able to help her son. The following week, Kristine came in for a trip.

She started out on 30 milligrams of ketamine, which would last approximately 45 minutes. Eye mask on, the darkness melted into colored shapes. Soon everything around her expanded into a blank, wide-open space. But she didn’t feel alone. Disoriented, she took off her shades and saw a mural on the wall across the room. It had ornate weeping cherry trees and egrets that seemed so close she could touch them.

Suddenly, she was not just within arm’s reach, but standing alongside the egrets. Still, she didn’t feel scared. Her therapist’s voice came in through her headphones: What did she mean when she said she was “in the mural”? Kristine tried to respond, but the words came out garbled and confused. She felt heavy.

As the medication wore off, everything came back to its right place. She was extremely hungry, and her therapist gave her chips. They moved into a big open area with low tables and papers and crayons scattered about. She was invited to draw or journal as she decompressed.

Afterward, Kristine took a cab home, riding with the window open. She remembered how on the way to the clinic, the city’s chaos had made the hair on her arm stand up; every moment seemed on the razor’s edge of peril. But on the way home, the city felt alive. Its energy seemed choreographed and harmonious.

“It was just beautiful,” she recalled six months later.

Cash for Ketamine

Field Trip’s Levy was never into mind-altering substances. He didn’t even start drinking until his second year of university—and only after a particularly heart-wrenching breakup. He began his career as a corporate and securities lawyer on Bay Street in Toronto before making his way to the pharmaceutical company Biovail Corp. Within a year, though, he had plunged into startups, first as a lawyer for dating site Hot or Not and then, in 2011, as the founder of Toronto Gold, a cash-for-gold business.

“If you look at my descent into hell, I went from a corporate securities lawyer to a pharma lawyer to a media lawyer to an online dating lawyer to someone working in cash for gold,” he says. “Every step along the way, I realized that there’s a lot of opportunity if you’re willing to wade into subject matter that other people find icky, for lack of a better word.”

Field Trip cofounder and executive chairman Ronan Levy [Photo: courtesy of Field Trip]

Levy’s core idea for Toronto Gold was to take a traditionally seedy business and find a way to make it approachable. Sales clerks would test the materials in the open and offer a transparent cash price. While he was able to open three locations, Levy never made enough to pay himself a salary—and, he admits, “It was never my dream job.” Eventually, he handed off the business and returned to law.

Levy developed a reputation for being entrepreneurial, and soon connected with Joseph del Moral and Hannan Fleiman, both of whom had previously launched home-services startups. The three Canadians began thinking of ideas for a new venture. One area that seemed ripe: medical marijuana. At the time, in 2013, Canadian regulators had recently updated a 2001 law to enable production and distribution of medical marijuana. But the industry was still murky. Where other entrepreneurs might have seen roadblocks, Levy spotted opportunity.

In 2014, he, del Moral, and Fleiman founded both CanvasRx, a store where the “cannabis naive” could come in to explore strains and producers, and Canadian Cannabis Clinics, where people could get a cannabis prescription. Two years later, they sold CanvasRx for $23 million to marijuana producer Aurora Cannabis.

We realized that we had a pretty unique skill set and a set of insights to bring to the emerging psychedelic space.”

Ronan Levy, Field Trip Cofounder

Soon after, they started hearing murmurings about psychedelics. They were ready. “We realized that we had a pretty unique skill set and a set of insights to bring to the emerging psychedelic space,” Levy says. In 2020, Field Trip opened its first office, with del Moral serving as CEO and Fleiman as president; Levy, as chairman, took up proselytizing for both the brand and psychedelics more broadly.

The founders are approaching psychedelics much as they did cannabis, with a focus on the clinical side of things. What’s different now is that Field Trip is also developing its own drugs. Though Field Trip’s network of clinics currently prescribe ketamine, Matt Emmer, the company’s director of operations and business development, says that ketamine is really just the “catalyst for psychedelic-assisted therapy.” The hope is that in the future the company will be able to prescribe MDMA, as well as its own brand of psychedelic medicines. As psychedelic-based therapy crests in the coming years, holding patents for effective drugs could prove lucrative.

That’s what Johnson & Johnson’s pharmaceutical arm, Janssen, did with Spravato (also known as esketamine), a drug that’s similar to ketamine. First synthesized in 1962, ketamine is used to numb surgery patients while leaving them able to breathe normally. Over time, studies revealed its potential to treat depression as well. But to get it approved for such use would have taken a costly clinical trial. Instead, Janssen patented and developed Spravato, which is more potent than traditional ketamine and delivered through the nose. In 2020, the FDA approved the drug to treat major depressive disorder and suicidality. Spravato’s approval gave physicians confidence to more widely prescribe generic ketamine for treatment-resistant depression—and allowed companies like Field Trip to take root.

In 2020, Field Trip announced its own pharmaceutical division, called Field Trip Discovery, with an R&D lab based in Jamaica. It’s currently focused on developing compounds that target the serotonin receptor believed to be responsible for the hallucinogenic effects of psychedelic drugs. So far, the company has one drug in development, FT-104, for treatment-resistant depression and postpartum depression. Similar to psilocybin, but offering a shorter trip, FT-104 received a patent in January.

Field Trip isn’t alone in pursuing psychedelic drug development. Compass Pathways, which is developing drugs for treatment-resistant depression and PTSD, raised $146 million in its initial public offering in October 2020. Atai Life Sciences, backed by Peter Thiel and focused on a pipeline of nine drugs for severe mental illnesses and traumatic brain injury, raised $225 million during its June 2021 IPO. MindMed, another startup in the space, raised $25 million in venture capital over the past year.

Psychedelics have been tested only among people with fairly severe mental illnesses, such as PTSD, which affects 12 million adults in the U.S., and treatment-resistant depression, which affects 2.8 millions Americans.

The pool of patients they’re all targeting is not as big as it might seem. An optimistic estimate from investment bank Roth Capital Partners calculates that the psychedelic pharmaceuticals market could be worth $500 billion on the basis that 82 million Americans have an untreated mental illness. The National Institute of Mental Health, however, reports that 53 million American adults live with mental illness (both treated and untreated), while Johns Hopkins says it’s one in four adults, or 65 million Americans. What’s more, psychedelics have been tested only among people with fairly severe mental illnesses, such as PTSD, which affects 12 million adults in the U.S., and treatment-resistant depression, which affects 2.8 millions Americans.

While expanding mental health care services, particularly in low- and middle-income regions that traditionally lack them, is valuable, much of what is needed is better access to proven mental health care therapies. Psychedelic medicine has a huge opportunity to tackle harder-to-treat mental illness, but is it really for everyone?

Riding High

With its natural-wood front desk and sheer, gathered curtains hanging from sun-drenched windows, Field Trip’s Manhattan clinic, set on a quiet, tree-lined block, could be mistaken for an upscale yoga studio. And maybe that’s the point: Champions of psychedelic-assisted therapy often speak as though it delivers something akin to nirvana.

At Field Trip, nirvana will cost you $6,000 for six ketamine doses and follow-up therapy sessions, some of which may be covered by the handful of insurers that recognize ketamine therapy. Field Trip opened its Manhattan location in fall 2020, about 18 months after the FDA gave esketamine-based therapy the nod. The company’s site touts statistics that show 96% of its clients feel less anxious and 95% feel less depressed immediately after treatment. It also shows that those metrics begin to decline a month out. What it doesn’t show is what happens after that month.

[Photo: courtesy of Field Trip]

Levy has said that the goal of his company is “to help all people—not just those with mental health challenges—enhance their quality of life, have greater empathy, be more creative, and feel more connected to others,” as he told Authority Magazine in 2020. This ethos is evident in Field Trip’s marketing, which positions the company not just in the therapy space, but as a place that honors the rituals and traditions of non-Western cultures that have used psychedelics. For people who want to further embrace this lifestyle, the company sells merch: rainbow hoodies, T-shirts, totes, and mugs.

Levy says he’s a believer. While he has not been diagnosed with a mental illness, he has taken ketamine to alleviate the stress and anxiety of running a startup and raising two young children. “There was just like a level of tranquility that didn’t exist before,” he says of his experience. “A level of resilience where things just didn’t phase me as much as they might otherwise, or send me into a thought loop or rumination that I can’t get out of.”

[Photo: courtesy of Field Trip]

This idea that psychedelics are for everyone permeates his Field Tripping podcast, now in its fifth season. On it, he interviews various luminaries of the psychedelic world on everything from the scientific to the divine. He’s spoken with the CEO of GoDaddy on how he used psychedelics to cure his PTSD. Another week, Levy spoke with author Brian Muraresku about how psychedelics were crucial to the creation of Christian doctrine.

The podcast paints a rosy picture of psychedelic-driven transcendence, though even the charismatic Levy can’t avoid wading into the less-savory issues surrounding psychedelics. In the first season, Don Lattin, author of the psychedelic bible Changing Our Minds, notes how psychedelics open people up and make them vulnerable to manipulation. “There are some bad actors out there, people who are taking advantage of people whether its sexually or financially—there’s all kinds of little warning signs.”

One inescapable facet of psychedelic medicine is that it is meant to treat people who are inherently vulnerable while making them even more susceptible to influence. And part of what is concerning about ketamine therapy is that there is little standardization around how it should be used for treatment-resistant depression, either in terms of dosage or number of sessions.

The Canadian Network for Mood and Anxiety Treatments (CANMAT) offers guidelines for ketamine’s use in academic settings. Field Trip, for one, has adopted these dosage guidelines, but conveniently overlooks the fact that CANMAT explicitly states that ketamine’s use should be “limited to academic depression treatment centers.”

[Photo: courtesy of Field Trip]

Field Trip’s therapy protocol, modeled off of an approach used by MDMA researchers, involves a trio of sessions: preparatory, experimental, and integration. For the preparatory sessions, patients meet for an hour with their therapists to ensure there won’t be any surprises once the drugs kick in. Experimental sessions are when the patients actually take the drugs, experiencing a dissociative state for about 45 minutes. During integration sessions, which usually happen a day later, patients meet again with their therapists, to process the feelings or experiences that came while they were on ketamine. Field Trip prescribes patients packages of four to six sessions.

“The big problem with ketamine is that you respond to treatments and then you relapse,” says psychiatrist Tiago Reis Marques, a senior clinical fellow at the Imperial College of London and CEO of Pasithea, a network of ketamine clinics with headquarters in Miami. “Only 30% of patients end up staying in a remission stage,” he says, meaning that patients who use this treatment usually have to take ketamine on a monthly basis.

Marques says the treatment is safe, but there are a lot of unknowns. There’s little data on the health impacts of long-term use of low doses of ketamine. (Long-term use of high doses leads to bladder control issues.) Ketamine has no withdrawal symptoms, but it is potentially addictive. There are also some concerns that using ketamine for depression could contribute to greater drug abuse overall, based on drug-use patterns in other parts of the world.

In the U.S., recent data shows that there has been a small, albeit noticeable rise in recreational ketamine use. In a 2016 article for the journal Nature, researchers called for the creation of a coalition that would write a set of standards for ketamine treatment and establish a registry of all patients being treated, so long-term community impact and patient outcomes can be tracked.

Many psychiatrists say the risk of getting addicted to ketamine inside of a treatment regimen, such as the one Field Trip uses, is low. Still, even psychiatrists who welcome ketamine as a therapeutic for treatment-resistant depression are cautious, counseling people to first try long-established nondrug treatments, like cognitive behavioral therapy (CBT).

“If it was your mom, would you want them to get ketamine before they got a really good course of CBT? It’s a personal choice, but [I think] it’s always better to go with something that has no side effects,” says Seth Feuerstein, a psychiatrist at Yale Medical School and executive director of the Center for Digital Health, Innovation and Excellence.

Field Trip is fairly open to new patients, even those who haven’t tried antidepressants or CBT. The company screens out patients who suffer from substance-use disorder (unless they’ve been sober for at least four weeks) and people with underlying health conditions for which ketamine poses a risk. Otherwise, the company says that most people who make it through its online screening are accepted. “Guidelines help inform clinicians but don’t always apply to our unique group of clients we meet daily,” the company says.

Lee Hoffer, a medical anthropologist at Case Western Reserve University who has studied ketamine abuse, is not surprised by Field Trip’s acceptance rate. “As there are more companies getting into this space, they’re going to be looking for that demand, right? They need to have people to take the therapy so they can get paid,” he says.

Investing in the trip

Kristine has never tried CBT. But she has now gone through six individual ketamine sessions. Her dosage increased from the initial 30 milligrams all the way up to 90 milligrams. “That was probably my favorite session,” she says. “I had no choice but to surrender and it just happened.”

Before that moment, she found herself resisting, trying to control the trip. Still, she says that over the course of the six sessions she gained a new sense of wonder about the world. In one session, she was brought back to a trip to Egypt she took with her husband and best friend; it reminded her that life can be inspiring. Between sessions, she picked up her old violin and started playing again.

Amid this newfound awe, there was something else. Each time Kristine took ketamine it pushed her a little further, but every session came with anxiety. “I had to mentally prepare,” she says. “I was afraid of feeling like I was losing my mind.” During two of her sessions, more traumatic memories emerged. Though she’s since journaled about those memories and meditated on them, her therapist didn’t advise her on whether she should reach out to the people involved and attempt to make peace. Her therapist simply told her to sit with the feelings until she was ready to make a decision. 

In the months after her ketamine sessions, Kristine also felt herself sliding backward. She wanted another trip, but instead of an individual session, she decided to try a group therapy session at Field Trip. In November, she met with a small cadre of other people who had also tried ketamine therapy and they all tripped together. The biggest benefit of the group work was both a drop in cost and a sense of community. Field Trip sees these group sessions, which are $325 for 150 minutes, as an opportunity to increase accessibility to ketamine therapy. Accompanying integration sessions cost $125.

Overall, Kristine says her Field Trip experiences have helped shift her mentality. Instead of wanting to end her suffering in the moment, she now thinks ahead. “The biggest difference is just knowing that there will be another good moment.” There have been other changes, too. She and her husband are excavating their relationship. She’s also not drinking as much as she used to.

It has been so life changing, in fact, that she says she’s been using her E-Trade account to invest in Field Trip and the crop of other companies offering psychedelic-assisted therapy that have gone public in recent months. After surpassing $6 per share shortly after its July IPO, Field Trip’s stock now sits below $2. Kristine is undeterred. “I’m a big fan, a big advocate,” she says. “I really do think that it’s amazing and wonderful.”