Helus Pharma looks to lead a new approach to treating depression

Helus Pharma is pushing into late-stage clinical development with a novel approach to treating depression, using psychedelic-based drugs designed to work alongside existing antidepressants rather than replace them.

At the centre of the story is HLP003, an experimental oral treatment derived from psilocin, the active compound produced when people ingest psilocybin mushrooms. Unlike recreational use, HLP003 is being developed as a precisely dosed pharmaceutical, tested in controlled clinical trials and administered under medical supervision.

The most important data from the programme are expected in the fourth quarter of 2026, when Helus reports results from a pivotal Phase III trial in major depressive disorder.

Pivotal stage

Phase III trials are the final and most expensive stage of drug testing before a company can apply for regulatory approval. They typically involve hundreds of patients and are designed to confirm that a drug works and is safe compared with a placebo or standard treatment.

Success at this stage is critical. Failure usually means the end of a programme, while success can unlock regulatory approval, commercial partnerships, or a sale of the company.

Helus’ Phase III trial is testing HLP003 as an “adjunct” therapy. That means patients continue taking their existing antidepressants, while HLP003 is added on top to see whether it produces additional benefit.

Measuring depression improvement

The main outcome being measured is a change in MADRS, short for the Montgomery–Åsberg Depression Rating Scale. This is a widely used clinical questionnaire that scores the severity of depressive symptoms. Lower scores mean fewer symptoms.

In practical terms, a difference of about two points between a drug and placebo is often considered enough for regulators to view a treatment as effective. In earlier Phase II studies, Helus reported placebo-adjusted improvements of more than 13 points within three weeks, a result that attracted attention despite the small number of patients involved.

Why Helus thinks its drug is different

Helus argues that its science gives it an edge in a crowded psychedelic field.

First, the company uses a technique called deuteration. This involves replacing certain hydrogen atoms in a molecule with a heavier form called deuterium. The goal is to slow how quickly the body breaks the drug down, leading to more predictable drug levels and potentially longer-lasting effects.

Second, Helus uses a two-dose induction model. Instead of giving a single psychedelic dose, patients receive two doses spaced several weeks apart. The company believes this approach may deepen and prolong the antidepressant response.

Finally, Helus is targeting a broader population than many rivals. Rather than focusing only on treatment-resistant depression, it is aiming at adjunct major depressive disorder, a much larger group of patients who have an incomplete response to standard antidepressants.

Breakthrough designation

HLP003 has received a breakthrough therapy designation from the FDA. This does not mean approval, but it does signal that regulators believe the drug could offer a meaningful improvement over existing treatments.

In practice, the designation allows for closer dialogue with regulators and potentially faster review timelines if the Phase III data are positive.

Anxiety as a second opportunity

Alongside depression, Helus is developing HLP004, an injectable version of deuterated DMT for generalised anxiety disorder.

DMT produces a much shorter psychedelic experience than psilocybin-derived compounds, which could make it easier to use in clinical settings. Phase II data for this programme are expected in early 2026 and would help determine whether it is worth advancing into larger trials.

Why investors are paying attention

Recently, Jefferies initiated coverage of Helus Pharma with a 'buy' rating and a $22 price target, compared with a recent share price of $6.88. The broker argues that positive Phase III data in depression alone could justify a major revaluation of the company.

Jefferies assigns a better-than-60% chance of success to the pivotal depression trial, based on the strength of earlier data and the trial design, while viewing the anxiety programme as additional upside rather than a core assumption.

Risks remain

Despite the optimism, the risks are substantial. Early trials involved small numbers of patients, and results do not always translate cleanly into large Phase III studies. Competition in psychedelic medicine is also increasing, and commercial success will depend on reimbursement, clinician acceptance, and regulatory decisions.

Still, with a clear clinical readout ahead and a strategy aimed at leadership rather than niche positioning, Helus is approaching a moment that could determine whether psychedelic therapies move closer to the mainstream of depression treatment.