The field of psychedelics-based drug development has been promising for mental health treatments, but it hasn’t yet delivered significant breakthroughs. Lykos Therapeutics faced a setback last year when the FDA rejected its MDMA drug for PTSD due to issues with the clinical trial design. Compass Pathways, another company in this space, announced this year that their phase 3 trial for a psilocybin-based depression treatment met its main goal, but they are still analyzing the full results. Meanwhile, MindMed is making progress with a treatment based on LSD. MindMed is getting closer to regulatory review with its optimized LSD formulation, recently publishing positive mid-stage results in JAMA. They also received a breakthrough therapy designation from the FDA for generalized anxiety disorder (GAD). GAD affects 26 million U.S. adults and hasn’t seen a new approved drug in almost 20 years. Daniel Karlin, MindMed’s chief medical officer, explained that current treatments often fail half of the patients, making this a significant area of unmet need. MindMed’s phase 2b study for MM120 included 198 adults with moderate-to-severe GAD and was a randomized, placebo-controlled trial to evaluate a single treatment across four dose levels. After finding the optimal dose, patients showed rapid improvement compared to placebo, as measured by the Hamilton Anxiety Rating Scale. This improvement lasted, with a 22-point improvement from baseline at week 12, which was 7.7 points better than placebo. Additionally, 48% of participants were in remission from their GAD after a single dose of 100 micrograms, and 65% had a significant improvement in their symptoms that persisted to week 12. MindMed is also studying MM120 for major depressive disorder and MM402, a modified version of MDMA, for autism spectrum disorder. To achieve regulatory success, MindMed is learning from recent setbacks in the psychedelics space. Despite Lykos’ failure with its MDMA-based drug, the reasons behind that rejection were actually a positive signal for MindMed. Karlin said, “Everything FDA said they needed to see from Lykos are things we baked into our program from the outset.” The FDA rejected Lykos’ drug candidate for several reasons, including concerns about recreational abuse, failure to collect requested data, and alleged sexual misconduct during clinical trials. A major issue was “functional unblinding,” where patients and investigators could tell who received the investigational therapy versus placebo. To avoid this, the FDA recommends including sub-therapeutic doses, which MindMed did. Patients on MM120 showed improvement without additional therapeutic intervention, unlike Lykos’ approach, which combined MDMA with psychotherapy, making it hard to distinguish the drug’s effects. Since the phase 2b trial, MindMed has been conducting toxicology studies to enable its NDA. They have also started three phase 3 studies for MM120, with two in GAD and one in major depressive disorder (MDD). The company plans to advance its GAD application first and later expand into MDD. Results are expected in the first and second half of 2026 for GAD and the second half of 2026 for MDD. Karlin said, “We’re very quickly moving toward confirmatory phase 3 data that would ultimately enable a submission to FDA for potential approval.” Although LSD has a cultural stigma, MM120’s pure, dose-controlled, oral disintegrating tablet enables predictable absorption and onset of effects. Working closely with the FDA has helped MindMed mitigate challenges faced by other psychedelic drug developers. Karlin said, “As we’ve moved through our development program, we’ve found an agency that is eager to meet with us and to try to come to alignment on key aspects of [our] study design and development program.”