Anyone who has dealt with a mental illness or has a loved one who struggles with a mental illness knows how devastating these diseases are. However, a growing number of biotechnology companies are giving patients new hope for recovery and the ability to thrive.

As of January 2023, there were over 160 potential treatments being studied for mental illness, demonstrating biotech's increasing interest in mental illness treatments. Additionally, the need for effective treatments is expected to continue exploding in the coming years.

According to one recent projection, the psychiatric and anxiety drug market was worth $20 billion in 2022 and is expected to see a compound annual growth rate of 7% between 2022 and 2032, bringing its value to $30 billion.

Here are five biotech companies currently working on drug candidates that tap into this soaring need for life-saving treatments.

SAGE Therapeutics

SAGE Therapeutics (SAGE) is approaching mental illness from a slightly different angle than traditional treatments have approached it. The company is focusing its research and development efforts on modulating the GABA and NMDA receptors. Both are critical neurotransmitter systems that contribute significantly to regulating the central nervous system.

In collaboration with Biogen (BIIB) and Shionogi, SAGE Therapeutics has been developing zuranolone to treat depression. In fact, SAGE recently received approval from the U.S. Food and Drug Administration (FDA) for the drug to treat postpartum depression under the brand name ZURZUVAE. Scheduling for the treatment is now pending.

SAGE Therapeutics is now studying zuranolone to treat major depressive disorder as well. The company also previously received approval for ZULRESSO, an intravenous treatment that also targets postpartum depression.

ATAI Life Sciences

ATAI Life Sciences (ATAI) also says it aims to redefine how the world approaches and treats mental health disorders. The company is leveraging a decentralized platform approach to accelerate the development of effective treatments for mental illnesses with unmet needs.

ATAI's pipeline contains several candidates for a variety of mental illnesses. RL-007 to treat cognitive impairment associated with schizophrenia is the furthest along, approaching the beginning of Phase 3 clinical trials.

The company is also developing GRX-917 to treat generalized anxiety disorder, which is in Phase 2 clinical trials. VLS-01 for treatment-resistant depression and EMP-01 to treat post-traumatic stress disorder (PTSD) are approaching the end of Phase 1 and beginning of Phase 2 trials.

ATAI Life Sciences also has equity interests in COMP360 for treatment-resistant depression, PTSD and anorexia nervosa.

Incannex Healthcare

Australia-based Incannex (IXHL) is working on 28 different projects with established proofs of concept in the pre-clinical, Phase 1 or Phase 2 clinical-trial stages. While the company is developing treatments that target a wide array of health problems, it does have one candidate for anxiety in its pipeline.

PsiGAD, a form of psilocybin, has completed the pre-clinical stage in generalized anxiety disorder and is now heading for a Phase 1 clinical trial. Incannex expects to finish its Phase 2 triple-blind, active placebo, proof-of-concept trial for PsiGAD in the second half of 2023. The trial is the first in the world to look at the safety and efficacy of psilocybin in any primary anxiety disorder.

Incannex is also developing CannQuit-O for opioid addiction, CheWell Addiction for cannabis dependence and CanQuit Addiction for tobacco smoking cessation, among many other treatments, including some for autoimmune diseases such as rheumatoid arthritis and Crohn's disease.

NRx Pharmaceuticals

NRx Pharmaceuticals (NRXP) is focusing on serious, life-threatening illnesses with major unmet medical needs. The company’s pipeline includes NRX-100, a proprietary formulation of IV ketamine for the treatment of acute suicidality, and NRX-101, a fixed-dose oral combination of lurasidone and D-cycloserine; this is a dual-targeted mechanism of action that modulates the 5HT2A and NMDA receptors. NRX-101 is designed for at-home maintenance treatment in patients with suicidal bipolar depression.

NRx Pharmaceuticals recently announced plans to file a new drug application for NRX-100 in early 2024 based on two well-controlled, randomized trials which indicated that ketamine was statistically, significantly better than an active comparator or placebo. Based on NRx's Phase 2 STABIL-B clinical trial, the FDA has granted fast-track approval for the combination of NRX-100 followed by NRX-101.

Enveric Biosciences

Leveraging its drug discovery and development platform, The Psybrary, Enveric Biosciences (ENVB) is working on novel, neuroplastogenic, small-molecule treatments for neuropsychiatric disorders. So far, the company has synthesized hundreds of proprietary molecules, optimizing its discovery efforts using its artificial intelligence platform, PsyAI to choose the best candidate molecules for certain mental illnesses.

Currently, Enveric is developing its EVM301 series for hard-to-treat anxiety, depression and other disorders, with its next milestone being lead selection.

The company is also preparing to initiate its first in-human clinical trials in Australia for its candidate EB-373 to treat anxiety. EB-373 is part of Enveric's EVM201 series, which consists of next-generation synthetic prodrugs of psilocin, an active metabolite.

Investing in mental health-related biotech

The number of biotech companies with therapies for treatment-resistant mental illnesses in development is quite encouraging, especially given the rapidly growing needs in the space. However, the good news is that new areas of biotechnology have brought more therapies for treatment-resistant mental illnesses into development than ever before.

As a result, investors may be able to uncover some lucrative investments in biotech companies that aim to bring light to an otherwise dark area of illness. Of course, investors are advised to always do their due diligence before investing in any sector or stock.

Ari Zoldan is CEO of Quantum Media Group, LLC, and Incannex and NRx Pharmaceuticals are clients of Quantum Media Group.