When drug developers go after the same disease, clinical trial results often have a see-saw effect on the stock market. Investors inevitably view one company’s data as stronger than its rivals, and share prices move accordingly. This has happened seemingly countless times in research areas like cancer, obesity, rare disorders and immune system conditions.

One notable exeption, however, is psychedelics. After the leading company in the space, U.K.-based Compass Pathways, reported positive findings in mid-February from two large studies evaluating its synthetic version of psilocybin — the mind-altering compound found in certain mushroom species — shares of at least four psychedelics developers rose by mid-single digits to low-double digits.

One of those developers, Definium Therapeutics, this week unveiled data from its own late-stage trial, in which a formulation of LSD significantly outperformed a placebo at relieving symptoms of major depression. The drug’s impact was so profound that analysts described it a “best-case” scenario for Definium, shares of which jumped around 50% on Monday to trade a bit under $37 apiece.

Marc Goodman, of Leerink Partners, raised his peak sales estimate for the drug to between $1.5 billion to $2 billion. “So overall it’s a very good day” for Definium, he wrote in a note to clients.

Such an outcome could have pressured the company’s peers, especially since each of their most advanced drug programs is aimed at either major depression or treatment-resistant depression. However, shares of Compass, AtaiBeckley and GH Research were unfazed. Helus Pharma’s stock even rose by almost 4%.

Psychedelics developers have shown, now on multiple occasions, a rising tide may indeed lift all boats. This likely has to do with the truly emerging nature of the field. Thanks to stigma, as well as scientific and legal obstacles, these mind-altering medicines were dismissed by top medical experts and the pharmaceutical industry for decades. Only recently have attitudes changed, in good part because of the prodigious results seen in clinical testing.

“This is one of the most important waves of innovation we’re seeing today in biotech,” Joshua Schimmer, an analyst at the investment firm Cantor Fitzgerald, said in an interview last summer. “[W]e’re seeing things we’ve really not seen before in psychiatric care, and it doesn’t end with depression.”

Yet, turning psychedelics into a feasbile business calls for not only buy-in from doctors, patients and insurers, but a critical amount of healthcare resources — like treatment rooms and support staff. Administering Definium’s or Compass’ drugs, for example, requires a medical professional to monitor the patient for up to eight hours.

Spravato, a nasal spray form of ketamine that Johnson & Johnson developed for treatment-resistant depression, is often pointed to as the pioneering psychedelics product. It hit the market in 2019. And while sales have grown exponentially, reaching $1.7 billion last year, J&J had to do a substantial amount of groundwork to get the drug used.

“It was not a blockbuster product out the door. The efficacy was always really strong, but the way it was managed and the infrastructure ... in place when we launched Spravato was very, very underdeveloped,” Catherine Owen Adams, a former J&J executive who now serves as CEO of Acadia Pharmaceuticals, said last year.

We spent “a lot of time developing that infrastructure and support system to allow doctors to be able to use it for the right patients,” she said.

Monday’s stock reactions may therefore be a sign that at least some investors see Definium as less of a rival and more of a teammate that can help establish the psychedelic drug market.

“[W]e think having another company in the space helping build out infrastructure for psychedelics can improve adoption across the board, and build enthusiasm,” Leonid Timashev, an analyst at RBC Capital Markets who covers Compass, wrote in a note to clients.

“Bigger picture, additional data helps further validate the psychedelic space and bring it even further into the mainstream,” Timashev added.

Patients with depression frequently switch up their medications, either because of side effects or symptoms not being adequately controlled. As such, the market for depression drugs has shown that it can carry several blockbuster products at any given time. That leaves “ample room” for Compass, Definium and other psychedelics developers, according to Jefferies analyst Andrew Tsai.

In his own note, Tsai asserted that psychedelics won’t be competing against each other — unless it’s for space in treatment rooms — so much as they’ll be going up against existing classes of drugs like SSRIs.

“We'd argue multiple psychedelic players can share the market anyway,” Tsai wrote. Compass and Definium “can grow patient, physician and investor mindshare together.”