Putting aside my skepticism of SpaceX for a moment, there is something worth paying attention to in the latest report about the people who made fortunes backing the company: they are now putting serious money into psychedelics.
And while I can’t necessarily get behind backing Elon Musk’s idea of elephants performing *Les Miserables *on the moon, or whatever other “lofty” goals are in the SpaceX S-1, I *can *get behind these follow up investment ideas.
Back in January when absolutely no one was talking about the sector, I officially hung my balls out there and name it my “Best Idea” sector for 2026. I was writing about these stocks years ago ago, first in January 2025, calling the psychedelic names “stocks to watch” for the year. Then, in July 2025, urging patience in these positions.
In April, after the administration’s executive order supporting psychedelic research, I reiterated my bullish stance and argued that we were moving from the phase where these therapies were ignored into the phase where institutions would be forced to engage with them seriously. That transition appears to be underway.
So far, the group has wildly outperformed the market, with the AdvisorShares Psychedelic ETF (PSIL) beating the S&P 500 by about +32% this year. Other individual companies I pointed out at the beginning of this year are beating the market by about +79% and +171%.
That doesn’t mean every name is going to work, or that the easy money hasn’t already been made in some of them. But the broader thesis continues to get validation, and the latest evidence suggests that capital is still finding its way into the space.
The biggest validation came in July, when Eli Lilly agreed to acquire AtaiBeckley for approximately $2.8 billion upfront, with another $1 billion contingent on development and regulatory milestones.
That is not a small biotech taking a flyer on an experimental treatment. That is one of the largest pharmaceutical companies in the world committing billions of dollars to a psychedelic-derived drug pipeline. Lilly’s interest is centered on BPL-003, a treatment being developed for treatment-resistant depression.
To me, that is major commercial validation. It doesn’t guarantee that the drugs will work, that regulators will approve them, or that shareholders in every psychedelic company will make money. But it does tell you that Big Pharma is beginning to see enough potential in this area to write very large checks.
And now, according to the Wall Street Journal, more people with money are pouring into the space. The Journal reports that Antonio Gracias and Steve Jurvetson, both of whom made fortunes from early bets on SpaceX, have spent millions supporting efforts to bring psychedelic medicine into the mainstream.
Gracias put $25 million into Lykos Therapeutics after the FDA rejected its application for MDMA-assisted therapy for PTSD. The company was subsequently renamed Resilient Pharmaceuticals and has been working to address the issues regulators raised.
Gracias has also donated $16 million to support psychedelic research at Harvard. Jurvetson and his wife, Genevieve, have backed psychedelic research and drug trials, while other wealthy supporters include Steve Cohen, David Bronner, and members of the Pritzker family, the WSJ reported.
This is philanthropic money, not necessarily money buying publicly traded psychedelic stocks. But it is still capital being directed toward the same broader objective: getting these treatments researched, developed, approved, and eventually into the medical mainstream.
And that is what I find interesting. For years, psychedelics were treated by much of the investment community as a fringe idea…right up my alley. Now you have major pharmaceutical companies making multibillion-dollar acquisitions, wealthy backers funding research, and companies continuing to advance clinical programs.
The sector appears to be gradually moving from a speculative story toward something that looks more like a legitimate pharmaceutical industry.
Of course, there is still a tremendous amount of risk here.
Any time an investment thesis depends on the FDA, you are dealing with an outcome that can change quickly and dramatically. Lykos is a perfect example. Its MDMA application was rejected, and the company had to be recapitalized and restructured. Questions around trial design, adverse-event reporting, safety, and the difficulty of conducting blinded psychedelic studies are real issues, not details investors can simply wave away.
There is also a difference between a promising treatment and a successful commercial product. Even if a drug gets approved, companies still have to figure out reimbursement, treatment infrastructure, physician adoption, and whether the economics actually work. So I am not suggesting that every psychedelic name is a buy, or that the sector should be chased indiscriminately after its run.
But I do think there is still a long way to go in the sector.
The Lilly deal was a major milestone. The continued flow of private money is another. And the fact that people who have already made fortunes on “unconventional”, long-duration bets are willing to fund this area suggests that the opportunity is still attracting serious attention.
The market has already started to recognize that something is happening here. My view is that the broader story may still be in its early innings.
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