Executive order signals regulatory shift and boosts investor confidence in emerging mental health treatments
Shares of psychedelic drug developers rallied sharply in premarket trading after Donald Trump signed an executive order aimed at accelerating the approval process for psychedelic-based therapies. The directive instructs the U.S. Food and Drug Administration to fast-track reviews of treatments targeting conditions such as depression, post-traumatic stress disorder, and addiction—marking a significant shift in federal policy.
Among the biggest movers, Atai Life Sciences surged 21%, while Compass Pathways jumped 26%. Other notable gainers included GH Research, Cybin, and Enveric BioSciences, reflecting broad-based optimism across the sector.
At the center of the policy shift is ibogaine, a psychedelic compound derived from an African shrub. Despite currently being classified as a Schedule I substance in the U.S., ibogaine is being studied for its potential therapeutic benefits. The executive order introduces “National Priority Vouchers” for psychedelic drugs that receive breakthrough therapy designation, potentially reducing review timelines from 6–10 months to as little as 1–2 months.
FDA Commissioner Marty Makary indicated that regulatory decisions on some of these therapies could arrive as early as this summer. Additionally, the federal government has committed $50 million toward research into ibogaine, further reinforcing its growing interest in alternative mental health treatments.
Support for psychedelic therapies appears to be gaining bipartisan traction, with policymakers from both parties advocating expanded access. Backed by figures such as Health Secretary Robert F. Kennedy Jr., the sector is increasingly viewed as a promising frontier in healthcare innovation.
For investors, the latest developments signal reduced regulatory risk and a potential turning point for the industry.
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