2024 started low, ended high. The shaky ground that kicked off the year, with regulatory changes and market volatility, eventually stabilized and finished on an up note with sector resilience, research breakthroughs and growing momentum, all of which are continuing into the new year.
We were delighted to see our portfolio companies achieve major milestones:
- Gilgamesh Pharmaceuticals entered into a collaboration and option-to-license agreement with AbbVie to develop next-generation neuroplastogens for psychiatric disorders, with a $65M upfront investment and milestone payments that could amount to a significant transaction totaling $1.95B.
- Beckley Psytech announced positive topline results from its Phase IIa study of ELE-101 (IV psilocin benzoate) for major depressive disorder (MDD), showing rapid, robust, and lasting antidepressant effects with a single 10-minute infusion.
- Merlyn Mind continued its evolution as the rebranded Emergence AI, with growing thought leadership and market recognition in the competitive AI space.
- Sana Health received a $3.4M grant from the US Department of Defense to conduct a study on post-traumatic stress disorder (PTSD).
- CaaMTech received endorsement from the US Food & Drug Administration (FDA) for their approach to solving the issue of blinding in neuropsychiatry trials, a challenge which up to now has stymied companies in the space.
More broadly, the industry sharpened its focus on mental health in 2024, as pharma companies poured resources into neurodegenerative diseases such as Alzheimer’s, Parkinson’s, and amyotrophic lateral sclerosis (ALS). Growing capabilities in biomarkers and AI-driven drug discoveries have accelerated progress, with several drug candidates entering late-stage trials.
Bristol Myers Squibb’s COBENFY™ became the first new drug for schizophrenia to gain FDA approval in 30 years, targeting a different brain chemical system, reducing side effects, and improving treatment efficacy. And on the heels of FDA approval of Eisai and Biogen’s second-generation Alzheimer’s drug approval in 2023 and global market approvals in 2024, Eli Lilly also gained approval for their new Alzheimer’s therapeutic, KISUNLA™. On the digital front, the first digital therapeutic for MDD, REJOYN™, was approved, which helps users manage their mental health through cognitive exercises.
It is especially notable to see AI so quickly becoming an indispensable tool in life sciences—from drug discovery to clinical trial optimization to personalized mental health treatments and more. For example, companies using AI to analyze clinical trial data reported faster timelines for drug development and more efficient patient recruitment, significantly saving resources while improving outcomes. This trend is poised to accelerate in 2025, as the technology advances.
Capital markets also rebounded for mental health and CNS-focused companies. In the US, biotech IPO activity picked up after a quiet 2023, with several achieving strong valuations based on promising pipelines. Internationally, venture funding in CNS research grew in Europe and Asia, with China emerging as a significant player in brain health innovation. Notably, private investment in mental health startups has surged, demonstrating robust demand for scalable solutions across diverse geographies.
Below are select developments that reflect a deeper understanding of the complex interactions between mental health, stress, and neurological functions, paving the way for more targeted and effective treatments in the future:
2025, a year for growth
All of this is setting the stage well for the coming year. We are optimistic and excited for 2025, buoyed by these portfolio and sector developments, as well as internal updates, including a brand refresh, which we’ll share more about soon.
Broadly speaking, these are some key themes we expect to shape the sector this year:
Global collaboration: International research initiatives, especially those focused on treatment-resistant conditions, are likely to yield new insights and foster a more cohesive regulatory landscape.
Regulatory milestones: The upcoming FDA decision on psilocybin therapies for depression will be critical, as will European approvals for novel antidepressants.
M&A activity: As competition intensifies, we expect increased mergers and acquisitions, with larger pharmaceutical companies acquiring smaller, innovative firms to bolster their pipelines. We will watch closely for developments in the market and regulatory environment under the incoming US administration.
Advances in digital therapeutics: With growing investment in virtual reality (VR) and app-based solutions, the intersection of mental health and digital therapeutics is set to gain traction.
AI in mental health diagnostics: Watch for new platforms that combine machine learning with brain imaging and biomarkers for earlier and more accurate mental health diagnoses.
With that, we wish everyone a happy, healthy and abundant 2025.
“The mind is its own place, and in itself can make a heaven of hell, a hell of heaven.”
– John Milton