The Eli Lilly move on AtaiBeckley has pushed psychedelics and mental health treatments back into the spotlight, and it is giving investors fresh reasons to reassess which stocks are most exposed to this news. With a multi billion dollar cash deal, a premium offer, and a late stage DMT program now under a big pharma umbrella, attention is turning to other companies tied to similar themes. This article breaks down three stocks from our mental health and psychedelic treatments screener that appear positively exposed to this development, and what that could mean for your watchlist.

Axsome Therapeutics (AXSM)

Overview: Axsome Therapeutics develops and commercializes medicines for central nervous system conditions such as major depressive disorder, migraine and narcolepsy, with a growing portfolio that includes Auvelity, Sunosi and Symbravo, as well as multiple late stage pipeline programs targeting areas like Alzheimer’s agitation, fibromyalgia and smoking cessation.

Operations: Axsome generates about US$708.2 million in revenue from developing and delivering therapies for CNS disorders, with roughly US$698.6 million coming from the United States and US$9.7 million from other markets.

Market Cap: US$12.2b

Axsome Therapeutics is directly exposed to the themes highlighted by the Eli Lilly AtaiBeckley deal, with a marketed depression drug in Auvelity, recent FDA approval for Alzheimer’s agitation, and a late stage CNS pipeline that aligns with large pharmaceutical companies’ interest in mental health assets. The company is still loss making and relies on a relatively concentrated portfolio, so execution risk and funding needs are important considerations. Analysts currently expect earnings and revenue growth and identify potential upside to their price targets if the company’s programs are successfully advanced. For investors assessing which mental health stocks could be positioned to benefit as psychedelics and advanced CNS therapies gain more attention, Axsome represents a higher risk situation with notable potential that may merit closer examination.

Axsome’s late stage CNS pipeline and newly approved Alzheimer’s agitation treatment could be only part of the story. Review the analyst forecasts for Axsome Therapeutics to see what expectations might still be missing.

LifeStance Health Group (LFST)

Overview: LifeStance Health Group delivers outpatient mental health care across the United States, offering therapy, psychiatric evaluations, medication management, and testing for conditions such as anxiety, depression, bipolar disorder, eating disorders, psychotic disorders, and PTSD through both in person clinics and a virtual platform.

Operations: LifeStance generates about US$1.5b in revenue from mental health services in the United States.

Market Cap: US$4.3b

LifeStance Health Group gives you direct exposure to the rising demand for accessible mental health care, combining a national footprint with virtual delivery at a time when large players such as Eli Lilly are leaning further into advanced treatments. The company is already profitable, LifeStance has been actively adding clinicians, integrating tuck in acquisitions, and using technology to improve productivity, which together could support higher margins over time. At the same time, the stock is priced richly on some metrics, insiders have been selling, and growth depends heavily on clinician recruitment and reimbursement terms, so investors need to weigh the potential growth story against funding risk and execution pressure that are still very much in play.

LifeStance’s accelerating clinic roll out and virtual reach could be masking something investors have not fully priced in yet. Read the analyst forecasts for LifeStance Health Group to see what happens if clinician hiring or reimbursement suddenly shifts.

Praxis Precision Medicines (PRAX)

Overview: Praxis Precision Medicines is a Boston based clinical stage biopharmaceutical company developing precision therapies for central nervous system disorders, using small molecules and antisense oligonucleotides to target conditions such as essential tremor, epileptic encephalopathies, focal epilepsy and severe genetic seizure disorders.

Market Cap: US$8.9b

Praxis Precision Medicines is drawing attention because it sits at the intersection of several mental health and neurology themes that the Eli Lilly AtaiBeckley deal has put back in focus. The company is still pre revenue and reported a sizeable quarterly loss, and it relies heavily on external funding, which raises dilution and financing risk. It also has multiple late stage epilepsy and seizure programs, as well as recent FDA Breakthrough Therapy Designation for elsunersen in SCN2A-DEE. Some analysts see the potential for significant revenue and earnings increases if key trials succeed. For investors tracking how psychedelics and next generation CNS treatments could influence psychiatry, Praxis represents a high risk, high potential story that many may not yet have fully examined.

Praxis Precision Medicines sits at a crossroads of high risk and high potential, and many investors may be missing the full picture on its development pipeline. Read the analysis report for Praxis Precision Medicines to see what could change the story next.

The three stocks discussed here are only a starting point, and the full Mental Health and Psychedelic Treatments screener surfaced 11 more companies with equally compelling mental health and psychedelic treatment narratives that you have not seen yet. Use Simply Wall St to identify and analyze the specific catalysts, financial health and risk factors that matter to you so you can focus on the highest conviction opportunities in this space.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.