Psychedelics are the Key to Addressing Mental Health Crisis, Expert Says

Psychedelics could be the key in treating depression

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    The psychedelic stock sector is beginning to boom, with legalization efforts initiated worldwide for a variety of different alternative medical treatments from this category. Investors want to know more about the psychedelic stock investment opportunities from industry-leading experts.

    Today, we chatted with Zach Lomis, Partner at Palo Santo. Palo Santo is focused on tackling the growing global mental health crisis by investing in innovative psychedelic-based and adjacent therapies that are poised to shape the future of psychiatry and fields beyond. 

    Schaeffer's: Why are psychedelics so important to addressing the global mental health crisis? And why do you feel they have been overlooked until now?

    Zach Lomis: As the number of people afflicted by mental health conditions including anxiety, depression, addiction and PTSD continues to metastasize and surge globally, demonstrated by a 13% increase over the last decade, it’s become abundantly clear that the current standard of care has proven to be largely ineffective.

    There’s been minimal innovation in the mental health space over the last 30 years, and for conventional medicines and treatments, costs are high, side effects can be severe (and can lead to worsened conditions), patients are relapsing at alarming rates, and a disproportionately low number of people are finding actual, sustained relief. Psychedelic medicine, in contrast, shows real promise at helping people with mental health conditions, as extensive research demonstrates much improved efficacy, higher cure rates, and longer-lasting, transformative relief.

    Despite the appreciably higher safety and lower toxicity profiles that psychedelic treatments have demonstrated, they’ve been largely overlooked due to misguided government decisions, ignited by the famed “War on Drugs”. In the 1950s and 60s, the government manipulated and miscommunicated the true intent and purpose of promising preliminary research despite conducting similar research of their own on psychedelic compounds at the very same time un benounced to the public.

    Ultimately a few social & recreational psychedelic applications were misinterpreted as a means to justify discounting and demonizing the potential of psychedelics. Psychedelics can help people break down mental barriers and question long-held notions and societal norms, and for government and religious authority figures, they pose a threat to their control and power over people.

    Misconceptions have been widely promulgated by powers that be, and unfortunately internalized by masses of people. But now, people are waking up, and research around psychedelics is very promising and simply can’t be ignored. These therapeutic treatments are poised to revolutionize mental health and the broader biotech ecosystem as we know it.

    Schaeffer's: What sparked your passion for the psychedelic medicine industry?

    Zach Lomis: My story is quite personal but unfortunately not uncommon. One of the most important people in my life passed away due to unnecessary health complications directly related to opioids. In trying to figure out how I wanted to carry on their legacy, work through what will always be my deepest wound, and find true meaning, I took a comprehensive look at the global mental health crisis and the opioid epidemic in specific, and made it my mission to foster innovation, clinical research, and mainstream acceptance in the way we handle mental health and addiction treatment, above and beyond the status quo, exploring all potential avenues of pharmacological and therapeutic applications.

    I’m acutely aware that the current standard of care has proven to be ineffective, inclusive of SSRIs, addiction treatment, and psychotherapy & cognitive behavioral therapy. Looking at all the breakthrough and robust research that continues to be released, I strongly feel that the fundamental psychedelic compounds have established a platform upon which mental health treatment as we know it will be completely recalibrated, ultimately providing access to the broader population and facilitating the most progressive form of CNS-related innovation our generation has ever seen. 

    The psychedelic ecosystem is marked by its openness, warmth and empathy. I’ve had the pleasure of meeting a community of people, from all walks of life, who entered this industry after experiencing trauma similar to mine or some form of a transformational personal journey, and it’s very encouraging to be in a space where people share my insatiable desire to combat mental health problems and addiction treatment.
    Schaeffer's: As a leader at a U.S.-based psychedelics investment fund, what stigmas and social barriers do you feel need to be broken down for broader acceptance of psychedelics and other alternative medicine?

    Zach Lomis: While we’ve been making great strides recently, there are still a lot of stigmas and barriers surrounding psychedelic medicine, which holds back the movement and prevents people from finding relief. First, we need to make it clear what the psychedelic movement is – it’s far more than just powerful, hallucinogenic drugs, but rather a CNS Disorder revolution.

    We are working with world-renowned academics, chemists, and biotech executives in tandem with the FDA-monitored clinical trials. We’re building on previous work and expanding research to develop new, effective treatments for a wide variety of psychiatric and behavioral disorders, with the aspiration to find treatments specifically tailored to the needs of individual patients.

    The universal application of the aforementioned is part of what I continue to do my best to reverberate perpetually - Whether it be anxiety & depression, substance use disorder, or even end of life care, we are all working together to leverage the potential within psychedelics and plant-based medicine to attack the most pressing and all-encompassing diseases plaguing broader society today.

    There are lingering, archaic stereotypes that associate psychedelics with excessive partying, debauchery, unprofessional behavior, and the broad misnomer of psychosis. But in reality, psychedelics directly attack much of the aforementioned. Our work centers around transformative therapy to help people reflect, recover, and ultimately thrive.

    Psychedelics are not centered around escaping reality; but rather, they’re about exploring new psychiatric perspectives, discovering truths and self-worth, addressing intrapsychic conflicts, and finding your own, unique pathway to resolution. There is a reason psychoactive effects exacerbate neuroplasticity and while all answers have yet to be determined, we do know that psychedelics incites a new level of activity in our brains that is conducive to psychotherapeutic treatments, which have continued to yield unparalleled results per clinical data readouts in the past few years alone.

    In psychedelic medicine, we must perpetually research and educate society. When we can truly facilitate mainstream patient access to properly administer psychedelics and accompanying therapeutic programs, broader society will come to see and appreciate how helpful and effective they can be, and we’ll shed the stigmas and shatter social barriers. 
    Schaeffer's: In your opinion, why should patients suffering from various ailments consider psilocybin and other psychedelics in lieu of (or in addition to) traditional medicine?
    Zach Lomis: A lot of traditional medicine is frankly inadequate and ineffective. For example, look at antidepressants. Between 65-80% of patients taking these meds continue to be depressed. Then look at psilocybin. Studies show that two months after being administered psilocybin, 70% of participants reported an improvement in quality of life and satisfaction, and after six months this number only decreased by 10%. Additionally, unlike traditional antidepressants, psilocybin doesn’t carry negative side effects like dependency, weight gain, loss of libido or increased suicidality. 

    Common antidepressants like SSRIs have been found to cause reduced limbic responsiveness and emotional blunting. Psychedelics like psilocybin, in contrast, can promote cognitive flexibility, enhanced imagination, more openness and creative thinking. Rather than just helping people cope (temporarily), psychedelic medicines help break down mental barriers that perpetuate depression, enabling people to find real power inside themselves.

    Furthermore, psychedelics provide a diverse array of pharmacological treatments, accompanied by psychotherapy, inciting bespoke and tailored regiments vs. the vast majority of prescribed synthetic compounds in-market today. 1 size does not fit all in any context of life, so why should it in the most important responsibility we all have, health.

    I end with the following question, why does almost everyone blindly accept whatever may be prescribed by their doctors (explore the multitude of multi-billion $ opioid settlements), but have such apprehension regarding psychedelics & plant-based medicines that have thousands of years of validation and the most impressive clinical data to date?
    Schaeffer's: What psychedelic studies done by others have inspired your company’s work and/or further validated your mission statement?

    Zach Lomis: There are several recent studies that continue to validate our work and inspire us. In May of this year, Nature Medicine published the results of the most advanced trial of psychedelic therapy to date, spearheaded by the Multidisciplinary Association for Psychedelic Studies (“MAPS”).

    In the Phase 3 Trial of MDMA-assisted therapy (“MDMA-AT”) for PTSD, 88% of participants who received MDMA in conjunction with trauma-focused therapy experienced a clinically significant reduction in symptoms and 67% of participants no longer met criteria for a PTSD diagnosis.

    Mental health experts say that this research — the first Phase 3 Trial conducted on psychedelic-assisted therapy — could pave the way for further studies on MDMA’s potential to help address other difficult-to-treat mental health conditions, including substance abuse, obsessive compulsive disorder, phobias, eating disorders, depression, end-of-life anxiety and social anxiety in autistic adults. Furthermore, this validates and will bring about the most important inflection point in the psychedelic industry to date — FDA approval of MDMA-AT for PTSD. 

    Another one of my favorite recent studies concerns the use of psilocybin to treat depression and improve the quality of life for patients with cancer and other life-threatening diseases. One of our portfolio companies and flagship partners, Reset Pharma, has exclusive access to Dr. Stephen Ross’ seminal 2016 phase 2 clinical trial data to advance a novel psilocybin-based therapy for these treatments.

    In three comprehensive studies, Dr. Ross’ research showed an immediate decline in depression and demoralization following psilocybin treatment, and perhaps even more importantly, a 4.5 year follow-up study demonstrated persistent remission. These results are groundbreaking and we’re unbelievably excited to work with Reset to help see their innovative psychotherapeutic program be utilized by cancer centers around the world!

    Lastly, it is important to note Matthew Johnson’s receipt of federal funding for psychedelic research -- Matthew Johnson received a U01 grant from NIDA to study psilocybin for tobacco addiction in September. We believe it to be the first grant from the US government in over a half century to directly study therapeutics of a classic psychedelic. This brings forward a truly new era in the legitimacy of psychedelic science.
    Schaeffer's: Tell us everything our readers need to know about Palo Santo.

    Zach Lomis: Palo Santo is a U.S.–based psychedelic investment fund focused on increasing the supply of clinically effective and accessible mental health and addiction treatment solutions needed in today’s world. The firm targets a diverse range of companies offering innovative solutions across biopharma, drug development, digital therapeutics and healthcare services to address the growing global mental health crisis.

    From cutting-edge science to commercial application, Palo Santo’s portfolio includes more than 20 companies focused on advancing the field of psychedelic medicines and expanding patient access and affordability. Rooted in sound science, we rigorously vet the companies we work with and recently announced our Scientific Advisory Board, which includes some of the world’s foremost doctors and academics in psychedelic medicine.

     Our ethos is funding a new paradigm of wellbeing and we welcome any and all outreach – please share your ideas, passion, and support. This is not just a Palo Santo effort but a broader community mission. We love working together and hope to continue redefining the healthcare industry as we know it!


    *This article is published for purely informative purposes. Palo Santo's opinions are not necessarily a reflection in any way of those of Schaeffer's Investment Research. We publish information about companies in which we believe our readers may be interested. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalized advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as SIR's solicitation to effect, or attempt to effect, any transaction in a security. Investments in the securities markets, and especially in options and futures, are speculative and involve substantial risk. The information that we provide or that is derived from our website should not be a substitute for advice from an investment professional. We encourage you to obtain personal advice from your professional investment advisor and to make independent investigations before acting on the information that you obtain from SIR or derive from our website.*


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