US drugmaker cuts 75% of staff after FDA rejects MDMA

“As we prepare to address the FDA’s decision, we must focus on providing the FDA with the robust clinical data necessary to support the approval of this potential new treatment,” Lykos CEO Amy Emerson said in the statement.

The company said it plans to resubmit its research to the FDA because it believes MDMA, also known as ecstasy or molly, can help people with post-traumatic stress disorder, including veterans and survivors of sexual violence.

It’s the first time the agency has considered a psychedelic for medical use.

If the FDA ruled in its favor, Lykos had the potential to become a billion-dollar company.

Johnson & Johnson sells an esketamine nasal spray called Spravato for depression. It is one of the few new treatments for mental illness approved in recent years and had global sales of about $500 million in the first half of the year, according to the company’s latest financials.

MDMA is a Schedule I drug under the Controlled Substances Act, along with heroin and cannabis. The classification is given to drugs with a high potential for abuse and no currently accepted medical use in treatment in the United States, according to the Drug Enforcement Administration.

Possible effects of MDMA use include depression, anxiety and paranoia, while overdose effects include heart and liver failure and death, according to the DEA.