After years of red tape under previous presidential administrations, the FDA has declared psychedelics a “top priority,” with Commissioner Marty Makary pledging rapid, independent reviews. This regulatory shift could be the catalyst that propels the industry into mainstream biotech territory.

Among the leaders are Mind Medicine (MNMD) and ATAI Life Sciences (ATAI). MNMD boasts a diversified pipeline of proprietary psilocybin formulations and novel MDMA analogs, underpinned by disciplined clinical design and a capital-efficient model. ATAI leverages strategic partnerships with top research institutions to advance multiple lead programs, including its MDMA-like candidate, toward expedited FDA milestones. 

Both stocks carry bullish ratings on Wall Street and offer significant upside potential, making MNMD and ATAI compelling picks for investors eager to capitalize on the next frontier of mental health innovation.

Psychedelic Stock #1: Mind Medicine

Mind Medicine is a biotech company that develops pharmaceutically optimised psychedelic compounds to treat anxiety and depression. Its lead candidate, MM120, is a purified LSD formulation designed for single-dose therapy.

In addition, Mind Medicine’s MM402 program targets enhanced social and communication skills for individuals with autism spectrum disorder (ASD).

Valued at $532 billion by market cap, shares of MNMD have lost 13% of their market value over the past 52 weeks, notably underperforming the broader market. 

Financially, Mind Medicine has improved its health over the past few quarters. The company ended the first quarter of 2025 with a strong cash balance of $245 million. 

On the adjusted basis, its EPS loss of $0.35 slightly missed the consensus estimate of $0.34, yet investors appear confident in MindMed’s disciplined use of capital. Plus, this quarterly loss was significantly improved from a per-share loss of $1.14 in the year-ago period. 

With an amended loan facility of up to $120 million and its cash balance of $245 million, the company’s financial runway now extends into 2027. That runway, roughly ten quarters, should fund completion of two ongoing Phase 2 trials for generalized anxiety disorder (GAD) and support the start of Phase 3 studies in major depressive disorder (MDD).

All together, it appears MNMD stock is well-positioned for meaningful growth.

The analyst community is highly bullish on MNMD stock, giving it a consensus “Strong Buy” rating, with 10 analysts rating it a “Strong Buy” and one rating it a “Hold.” Their average 12-month price target of $24.50 implies more than 255% upside from the current price.

Psychedelic Stock #2: Atai Life Sciences

Based in Germany, Atai Life Sciences is a clinical-stage biopharmaceutical company focused on developing next-generation mental health treatments. The company leverages psychedelic compounds and digital therapeutics to target conditions such as depression, anxiety, and other psychiatric disorders. The company boasts a small market cap of $404 million.

Earlier this week, Atai reported positive early results from Part 2 of Beckley Psytech’s Phase 2a trial of BPL-003, a candidate aimed at treating treatment-resistant depression (TRD). Following the release, shares of Atai Life Sciences surged 12% in a single day, hitting a three-month high. The rally helped the stock recover early year losses and brought its year-to-date gain to 47%.

In Q1 2025, Atai Life Sciences strengthened its balance sheet with $108.2 million in cash and equivalents, up from $72.3 million at year-end 2024. This $35.9 million increase reflected $59.1 million raised through equity financing, partially offset by $17.8 million in operating expenses and $5 million invested in digital assets.

Meanwhile, R&D spending dipped slightly to $11.3 million from $11.5 million a year ago, thanks to efficiency gains in trial operations. At the same time, streamlined personnel and consulting arrangements drove G&A costs lower.

On May 2, 2025, Atai preemptively repaid its $21.8 million Hercules Capital loan, saving roughly $2.1 million in future interest and terminating all related debt obligations. These moves, combined with low leverage, push the company’s cash runway into 2027, allowing Atai to fund multiple Phase 2 and exploratory programs through key clinical milestones without seeking new financing.

Atai's positive early results from Beckley Psytech’s Phase 2a Part 2 study of BPL-003 in treatment-resistant depression were praised by analysts. Jefferies analyst Andrew Tsai called the data “encouraging,” noting the consistency in efficacy profiles and its de-risking effect ahead of a mid-2025 Phase 2b readout.

Moreover, Atai has several promising programs in the works. VLS-01 targets treatment-resistant depression, while EMP-01 aims to help people with social anxiety. The company also has non-hallucinogenic neuroplastogens and its RL-007 cognitive treatment. These candidates could gain a strong foothold in large mental health markets, boosting Atai’s value as each milestone is reached and helping it expand globally.

Lastly, ATAI received a unanimous “Strong-Buy” rating from all six Wall Street analysts. The mean price target is $8, which implies an expected 300% upside potential.